ATLANTA - Atlantis Plastics Inc. wasn't broken when Anthony Bova took over as chief ex-ecutive officer in February, so he didn't fix it. Instead, he thought it necessary to steer the firm, which showed $260.8 million in net sales in plastic film, sheet and molded products in 1994, into the ranks of what he calls ``world-class'' companies.
``Our net sales had grown 50 percent over the period 1991-1994,'' Bova said in an interview in his Atlanta office. ``But our gross margin had remained flat, and our operating margin had declined from 9.5 percent to 8.5 percent from 1993-1994.''
At present, Bova, a graduate of the Columbia University School of Business and former senior vice president of the specialty packaging group of Packaging Corp. of America of Chicago, is identifying the ``key cost drivers'' in the plastics business, with an eye toward growing the company past its present state. He replaced former Atlantis CEO Earl Powell in mid-February. Powell remained in place as chairman of the board. He also spent years as senior vice president of the packaging, labels and identification systems division of Avery Dennison Corp., and 19 years as an executive with International Paper Co.
``As far as I'm concerned, you have to put a stake in the ground and measure your progress toward it, affixing accountability,'' he said. ``In my view that is the only way to make progress.''
To accomplish this goal, Bova said he will strive to make the company ``user friendly'' by improving safety as an aid to production at the company's 16 plants, assessing the company's existing business to identify what it does well, and by working with its customers closely to make added-value products that they need. Although the company's plants have a good safety record, Bova said Atlantis should always try to improve because it saves money and improves efficiency. He said identifying the firm's strengths simply makes it possible to improve them even more.
The company spent about $18 million on capital improvements in 1994, and will spend an estimated $14 million this year to improve operations and increase capacity.
Atlantis Plastic Films will increase capacity about 15 percent to about 300 million pounds per year. Atlantis Molded Plastics will see a 15 percent increase in machine hours to about 1.1 million hours per year. Bova said he plans to use the company's customer application training laboratory in Tulsa, Okla., to develop new materials and applications in conjunction with customers, especially in the custom films market.
``One of the major things we can do is cut the cost of raw materials by maximizing our scrap usage, since raw materials are 52-66 percent of our costs, to make higher yields,'' he said. ``Strategic partnerships with our customers are crucial to our achievement of world-class status, and are something you will be seeing more and more of in the industry.''
Already, Bova has reconfigured the top management of the company to make its five divisions more directly accessible to the customer. In the new structure, customers will be able to communicate directly with institutional and custom film, injection molding, profile extrusion and blow molding executives at the vice presidential level, who will in turn communicate directly with Bova.
``If I'm Whirlpool, for instance - one of the customers of our five injection molding plants that used to be Cyanide Corp. - I want to go to the top and get the information I need,'' he said.
Bova noted that targets for growth in the company's product line include stretch films, where there has been about 15 percent annual growth during the last decade, and where Atlantis is the second-largest producer in North America, behind Mobil Corp. It also makes custom films, extruded profiles for construction and recreational vehicle markets, blow molded nonfood containers and injection molded parts for appliances, electronics and other uses.
Atlantis Plastic Films, the film division of the Miami-based parent company, has stretch film plants in Tulsa and Nicholasville, Ky.; custom film plants in Mankato, Minn., Tulsa and Cartersville, Ga.; and an institutional film plant in Mankato. Atlantis Molded Plastics, the molding arm of the parent, does injection molding in Henderson, Ky., Jackson and Nashville, Tenn., Ft. Smith, Ark., and Warren, Ohio; has a profile extrusion facility in Elkhart, Ind.; and has blow molding facilities in Demopolis, Ala., Orlando, Fla., and Dallas.
``Each of our five core businesses is like a child,'' he said. ``some are good at some things and some are good at others. We have to decide, probably by the end of the year, what their strengths and weaknesses are, and use our resources to operate them more efficiently.''
He said he also is looking at the opportunities in the various segments of the industry where Atlantis competes with an eye toward the future.
``You see a lot of consolidation in the industry and I think that will continue,'' he said ``You can't work on what you can't control, so we have to work on the things we can. We have to formulate fact-based opinions and pretty soon the plastics curve might reach the point where it is better from the cost and customer standpoint to acquire a company, but we are not out looking for that opportunity right now. Right now we have to make choices in all five of our core businesses which make those margins better.''