Two and a half years after completing its purchase of James River Corp.'s flexible packaging business, Jimmy Love, vice president of corporate development for Printpack Inc., thinks this was a great acquisition for his company, despite some setbacks.
``It was significant in the context of flexible packaging rather than plastics as a whole,'' Love said.
The $372 million cash deal merged two of North America's largest manufacturers of flexible plastics packaging, effectively doubling the size of Printpack.
Before the purchase, Printpack operated 11 plants, while James River ran nine.
``We're acting like one big company,'' Love said.
This cohesiveness was not without penalty. After completing the deal in August 1996, Printpack went to work cutting costs by immediately closing two James River plants.
In addition, one of the plants Printpack acquired had a union contract pending while Printpack and James River were in negotiations. Printpack, according to Love, didn't want James River negotiating a contract in its place. Love added that the Greensburg, Ind., facility had had problems with work attitude and profit. When the acquisition was finalized, Printpack refused to buy into a new contract with the union.
In the summer of 1997, the contract expired and a 12-week workers strike at the plant cost the company more than money; it cost it customers.
Disputes were settled and a new contract was ratified on the first vote last year.
In the meantime, Printpack has not reached the profitability levels executives had anticipated. With the industry growing at 3-4 percent, the company is moving ahead much more slowly, Love said. The number of units produced is up but pricing is down.
However, Printpack is ``extremely well-positioned with our customers,'' Love said. Sales have been about even: The company reported total sales of $850 million for the year ended June 30.