TORONTO (June 12, 10 a.m. ET) — Don't call it a comeback.
After a tumultuous few years, Toronto-based Polyair Inter Pack Inc. is working its way back to the top of the protective packaging field.
Polyair was founded in 1987, and by 2005, had grown from a tiny manufacturer of pool products into a publicly traded protective packaging company netting sales of more than $100 million a year, said Executive Vice President Martin Gilvarg.
The company embarked on a string of acquisitions, developed new technologies, and introduced many new product lines.
Then the recession hit.
Polyair's customers, especially those in the moving and storage markets, struggled. The company, which had branched out into multiple arenas to serve a crowd of clients, was stretched thin.
“We were a company that was trying to be everything to everybody. Any product that a customer wanted, no matter what the volume was, no matter how difficult, we'd take that on,” said CEO Gary Tessitore by phone.
In 2009, after several years of losses, Polyair was delisted from the Toronto Stock Exchange and taken private by Chicago-based private equity firm Glencoe Skydome Holdings LP. A year later, it closed a plant and sales office in Youngstown, Ohio.
It was time for a change, and for Polyair, reclaiming growth meant cutting back.
“We had to get back to the core of what was valued by our customers, and that was meeting their expectations,” Gilvarg said.
Led by a new management team, Polyair identified what it did well, what its customers wanted and what markets would be successful, Gilvarg said.
Polyair halted forays into new products that didn't fit with the company's portfolio. It narrowed down product offerings into six broad category groups: four product lines (bubble, foam, mailers and air-pillow packaging machinery) and two business units (reflective pool covers and insulation).
“We can't back six horses or seven horses. We've got to back two or three that will end in a winning position … and those are our products,” Gilvarg said.
A narrowed focus still leaves room for innovation, however. The company has responded to consumer demands by introducing environment-friendly and lightweight packaging.
Polyair stopped using nylon in its protective packaging, so products could be recycled curbside, and several of its wraps and mailers now contain up to 20 percent industrial recycled scrap, Gilvarg said.
The firm has introduced Durabubble360, a bubble wrap featuring an oxo-biodegradable additive from EPI Environmental Products Inc. of Vancouver, British Columbia. Customers can also use low density polyethylene film containing the additive in Polyair's air-pillow machinery.
Investing in green has paid off. Sales of Polyair's environment-friendly products grew more than 50 percent in the last year, said Trent Harkness, vice president of marketing, adding that sales of the 360 line are up more than 100 percent.
“Consumers are demanding that [brands] have green initiatives, that they're a green company, and we help them do that,” he said. “We do the heavy lifting: We develop a biodegradable product; we make sure our products are recyclable.”
Responding to customer's demands has been a key component in the company's comeback, Tessitore said.
During the recession, distributors began asking for shorter lead times, a practice that's continued even as the economy has improved. In response, Polyair reworked its manufacturing patterns to improve production speed and quality, he said.
The company also improved communication with customers, informing them of what products are kept in stock and can be shipped quickly, and offering them competitive lead times for others, he added.
Polyair also has reworked where products are manufactured and shipped, coordinating orders between its six North American plants and its distribution center in California.
“There's been a real focus on ensuring the infrastructure of our businesses is working and deriving value … putting equipment where customers need it, ensuring that we've got the platform, ensuring that our manufacturing platform is efficient and meets our customers needs,” Harkness said.
The change extends beyond just manufacturing. The company had to ensure that all of its approximately 500 employees, from sales staff to upper management, were on the same page and working toward the same goals. It was a complete change in company culture, Gilvarg said.
“That's the key to being successful, making sure that everybody, not just management but all employees, understand what the values are and what we do,” Tessitore said.
It looks like it's paid off. Earlier this year, Polyair received a gold award from United Group, a buying group made up of distributors in the janitorial, food-service, industrial packaging, and safety equipment and supplies markets.
Polyair is one of the group's preferred suppliers and was recognized for its work in the industrial packaging market.
For a company that's undergone a transformation, winning the award was particularly gratifying.
“We didn't always say yes anymore. We said no to extraneous ideas. We had to do things differently,” Gilvarg said, adding that the award proves customers have embraced the changes.
“One can never know what the future holds, but this was an outside recognition that our customers wanted us to make it through this tough period, and we made it through and we're growing faster than previously, that's for sure,” he said.
Going forward, Polyair is dedicated to growing organically and extending its product line, Tessitore said. The company is courting customers through new products, like an anti-corrosion bubble wrap targeted at the automobile industry.
The product, developed through a joint venture, will be available this fall, Gilvarg said.
While the company is looking at outside opportunities, like selective acquisitions or licensing agreements, it's proceeding cautiously and continuing to focus inward, Tessitore said.
Gilvarg added: “The most important part is the support we've seen from our customers. Restrengthening this company has been gratifying; it was based on a less-is-more strategy.”