After capturing Mobil Chemical Co.'s Plastics Division, Tenneco Packaging got down to brass tacks: It began integrating the acquisition to become a single, unified packaging source — in essence, a megasupplier.
``The real strategy behind the acquisition was our interest in being a company in food-service items that could provide multiple materials,'' said Richard Wambold, Tenneco's executive vice president and general manager of specialty and consumer products.
At the time of the acquisition in November 1995, Tenneco's Packaging Corp. of America unit was the No. 1 U.S. producer of polystyrene food-service products like thermoformed plastic cups, lids and containers, as well as paper and foil packaging products.
The $1.27 billion deal added Mobil's packaging and consumer products business, with brand names like Hefty and Baggie. It also brought a huge range of food-service, supermarket and industrial specialty packaging — stretch wrap, pallet wrap, foam food trays and clear thermoformed blister packs.
Tenneco believed that combining the two firms' packaging interests would give it a weighty advantage on a national scale, strengthen its management and sales forces and net a strong financial return. Wambold said the Lake Forest, Ill., packaging giant has met all of those goals.
There also were some pleasant surprises.
``The manufacturing capabilities were better than we thought; the management team was better than we thought; and we were able to reduce cost and capitalize on best practices much better,'' Wambold said.
Now the company is in the process of taking what Wambold calls the last step in complete integration: For three years Tenneco has been working on a single management information and logistics system that will give it unity in such areas as customer service and production scheduling. The firm operates 33 plants, but they will be guided as one business.