There are many stories behind an acquisition, especially one as large as Berry Plastics Corp.'s purchase of Landis Plastics Inc. in November.
The deal was one of the biggest in the plastics industry last year, with Berry spending $228 million to obtain a larger injection molding and packaging base. Evansville, Ind.-based Berry trumpeted the synergies of the purchase, a marriage of convenience between two companies sharing cultures and products.
But there was another reason for the purchase, one that did not surface last fall: Berry wanted to up the ante on thermoforming. Customers were asking for it. The company was preparing to spend more money for equipment. And polypropylene, a commodity material that once had given processors fits in manufacturing, had emerged as a main feeder for that growth.
Landis, based in Chicago Ridge, Ill., had thermoforming. Namely, it had success in PP thermoforming of yogurt and other dairy cups. Berry also used PP, thermoforming drink cups and containers, but saw an opportunity. The rest, as they say, is history.
``Berry has state-of-the-art technology for deep-draw, post-trim thermoforming,'' Berry President and Chief Executive Officer Ira Boots said in a Jan. 30 telephone interview from Evansville. ``Landis has PP trim-in-place thermoforming technology that is state of the art.
``Putting the companies together makes us both better in many ways.''
Landis, maintaining its name after the sale but now a division of Berry, already has benefited at its segmented, 455,000-square-foot plant in Alsip. In January, the facility received a new in-line thermoformer, its sixth, designated to make single-serve PP containers and lids.
The equipment once was destined for Berry's Evansville plant, but fit better with the Landis operation, said Jeff Mann, Evansville-based thermoforming engineering manager for Berry.
``There are all sorts of [single-serve] product items out there,'' Mann said. ``Ready-to-eat packages, salad packages, snack containers. We're prepared to go after those.''
Alsip plant manager Dan Mahoney said, ``We're acting aggressively in this market.'' Surveying the installation of the new OMV trim-in-place thermoformer, he said, ``We plan to push the envelope on this.''
Other companies are thermoforming PP, too. What was an experiment in the late 1990s is becoming de rigueur for thermoformers in packaging, said George Luken, chairman of thermoformer Mullinix Packages Inc. of Fort Wayne, Ind.
His company has invested in PP post-trim thermoforming for microwaveable containers and food trays, fueling a plant expansion in 2002 to about 400,000 square feet.
``We fooled around with PP for several years first,'' Luken said. ``We learned a lot about PP from that experiment, but never sold a lot. Since that time, a market has been created, and an awful lot of people have gotten into it.''
PP is making moves throughout the industry, taking over work once held by paper and polystyrene for fast-food containers, said Kent Johansson, president of equipment supplier OMV-USA Inc. of Elkhorn, Wis.
In the past six months, two other large thermoforming deals were announced that involved companies shifting to PP. And products are starting to emerge, Luken said. They include chicken roaster trays made by Pactiv Corp, cook-in-the-package containers from Cryovac Inc. and snack-food containers sold by Procter & Gamble Co.'s Pringles brand.
From 2001-05, PP is expected to grow 9.1 percent in thermoforming applications, said Don Wark, president of Harborside Research Group of Salem, Mass. Less than 100 million pounds of PP was used five years ago; about 500 million pounds is expected to be used next year, he said.
OMV-USA opened a 40,000-square-foot plant in Elkhorn in December to make a wider-platen machine that increases the throughput for thermoformed PP containers, Johansson said. OMV now can produce PP thermoforming equipment in North America instead of shipping it from Verona, Italy.
While the company has sold nearly 40 PP trim-in-place machines in North America since 1994, the single-serve-container market will punch up those numbers even higher, he said.
``A lot of people who have been quietly producing PS with conventional machines now all of a sudden are getting a wake-up call to convert to PP to stay in business,'' Johansson said. ``My telephone is ringing red hot.''
That is the curve thrown by PP thermoforming. New in-line machines, some costing millions of dollars, are needed. With customers demanding a move to the lower-cost, lighter-weight material, processors are being forced to invest.
Berry has the critical mass to respond. The company spent close to $13 million in the past 12 months on thermoforming equipment, Boots said. But for others, it is not an easy chore to move to PP.
While OMV-USA specializes in trim-in-place equipment, another machinery supplier, Thermoforming Systems LLC of Yakima, Wash., has gone the post-trim route. That approach, used by Berry in Evansville since 2000, is faster because it takes away the need to cool and then reheat sheet in the machine, said Dave Irwin, vice president of sales and marketing.
Yet the process, compared with trim-in-place, has not offered the same surface detail or tight tolerances needed on such products as dairy cups, Irwin said.
Thermoforming Systems said its Low Flex post-trim machine uses higher forming pressure and a wider platen to create greater detail and throughput. The company is targeting such applications as cold drink cups, trays for case-ready meats, and souffle cups and lids, Irwin said.
In the past 18 months, about 30 percent of TSL's sales have come from PP applications, Irwin said. Right now, six machines are on order for PP jobs, he added.
``The marketplace is driving it,'' Irwin said. ``Yogurt and dairy cups have kicked butt for quite a while in PP, and Landis has driven some of that. But by far, we're selling many more PP cold cup lines; it's a gigantic growth area.''
Berry, a major injection molder, started studying opportunities to grow its thermoforming business in the late 1990s, said Fred Heseman, vice president and plant manager of the Evansville facility. It installed its first machine in 2000 to make make deep-draw PP drink cups.
The company worked with post-trim technology, keeping an eye on replacing the styrene cups so prevalent at fast-food restaurants and other institutions, Heseman said. But volumes were much lower than with styrene foam, and the market was still in its infancy.
At Landis, the technology was different, but the goals were similar. Landis took its technology from Europe, where trim-in-place thermoforming had became standard issue, said Myron Lee, Landis director of manufacturing engineering.
``We knew it was a higher-value product,'' Mahoney added. ``We could make lighter-weight products with high quality.''
Customers were clamoring for more, though, said James Watson, Landis operations director. Higher output was required, and tooling costs were lower with post-trim work. A consistent finish was still an issue, Watson added.
The company kept up development, eventually moving in five thermoforming lines to make single-layer and coextruded products, Watson said. Landis knew the future was in PP, even though it was more discussed than acted upon in 1998, Watson said.
``We saw how well thermoforming had developed in Europe with trim-in-place and decided to follow suit here,'' Watson said.
The married company is preparing a larger assault on the thermoforming market. With retail superpowers such as Wal-Mart Stores Inc. campaigning for case-ready meats and the elimination of in-store butchers, trays are one application in which PP can make a dent, said Huston Keith, principal of consulting firm Keymark Associates Inc of Marietta, Ga.
``PP is not only cheaper but has higher heat-suction temperature for microwaveability,'' Keith said. ``Lots of people have worked on this for a number of years. It seems like some of the bugs have been worked out.''
As far back as 1993, OMV's Johansson said in-line thermoforming and extrusion would become the process of choice for quality and economy in food and medical packaging.
Today, partly driven by the pairing of companies such as Berry and Landis, the industry is just starting to release its potential in higher-volume applications. Berry and Landis are just starting, too, Boots said.
``Two different companies are one company now,'' he said. ``We're still in a period where we're getting to know each other. But the advances we make in the future will mirror the great relations we've had with customers in the past.''