CHICAGO — CEO Gary Masse has a simple message, and some new math, for everyone at Coveris Holdings Corp.
Get on board or get out of the way.
Coveris, formed last year when private investment firm Sun Capital Partners Inc. combined a handful of plastic packaging companies, is changing and growing and creating a single-company culture dubbed the Coveris Business System.
“I joined in April. We've been hard at work integrating the companies as well as driving our vision for the company,” Masse said in a recent interview with Plastics News at Pack Expo. “We thought by putting them all together and forming a bigger entity, we would have a 1 + 1 = 3 opportunity with Coveris.”
Having separate companies with a shared history of ownership under Sun Capital laid the foundation for Coveris, but that doesn't mean there hasn't been change for employees.
“We've replaced several of our presidents in the business, and we've brought in some new people from the outside to help us get more of a common message across. So there have been those who have resisted change and they've been exited, and there have been others that embraced change and truly stepped up,” Masse said. “And you're always going to have that in an organization.”
Introducing concepts such as lean manufacturing and kaizen, or continuous improvement, can be difficult for some.
“If you are a manager and you are used to having that control over a business, and now we're telling them to step aside and give more control to the person on the floor to run his or her piece of equipment, it's scary,” Masse said. “Those are the people we probably had to move out faster because the production people are taking a step up in a big way.”
Coveris initially came together in 2013 through the combination of Exopack Holding Corp., Kobusch Group, Britton Group, Paragon Print & Packaging Corp. and Paccor.
Creating Coveris means the companies that once ran independently of one another, despite common ownership, can now come together to create a common approach through the Coveris Business System.
“We have to put it all together under one company culture,” Masse said. “So now we talk the same way about our sales funnel. We talk the same way about productivity. We talk the same way about key metrics.
“It's not just a vernacular, but it's also the processes we're driving,” he said.
“This Coveris Business System now becomes who we are and what we do. And it becomes our culture. So I like to describe it as the mortar within our bricks. We brought in a lot of bricks to build our foundation, but the Coveris Business System goes across all the bricks and holds us together,” the CEO said.
Coveris, during Masse's short time at the helm, also has been active in reshaping the business through acquisitions and divestitures, including the recent purchase of Learoyd Packaging Ltd., a flexible packaging company based in Burnley, United Kingdom.
“On top of that, we're working with each business to develop their own strategy. We're looking at each of our end markets and asking ourselves are these attractive end markets? Do we want to play in them? Should we be investing more in them or should we be getting out of them? Are these dead ends for us? We're asking some tough questions of the teams that kind of challenge them,” Masse said.
“I think with those kind of questions and that deriving of a direction for each piece of our business, you are going to see some pretty bold moves, whether a lot of investment or an exit,” he said.
Chicago-based Coveris currently has more than 60 locations in 19 countries and calls itself the sixth largest plastic packaging company in the world.
Coveris, thanks to its ownership by private equity, also has to think about its own future as a whole as well.
“There's no goal as far as a timeline. But certainly, with any private equity asset, there is an exit, right?” the CEO said. “And that exit comes in the form of a sale or an IPO. And where we are looking at right now is most likely an IPO for the company.
“We think the multiples are very strong in the marketplace for companies the size of us. And if we compare our size and we do a comparison to our competitors, we think it will be a very valuable exit if we do an IPO,” Masse said.
Coveris is making moves to prepare for an IPO such as hiring a general counsel and adding independent board members.
“We're beginning to be able to move in that direction,” he said.
“It's the right thing to do even for a private company, those kinds of things. But if you ever wanted to move and move quickly to go public, we're positioning ourselves,” Masse said.
“It's market dependent. We're going to look at are we ready? Is the market ready? And then you make the call,” Masse said.
But the CEO said the firm has some work ahead before deciding whether to go public or not.
“I think we have an exciting future ahead of us, if you put the endgame aside for now and look at it just from an operating standpoint. We're setting ourselves up to win in the various markets that we're in,” he said.
“We can continue to drive excellence across our business, and we have a ways to go to be excellent. We can see our growth rate being much better. We certainly want our plants to run more efficient. We want to see our lead times decrease. We have quite a ways to go, but there is tremendous opportunity,” Masse said.
“That's what I have people focused on, not an IPO, not what happens at the end of the day. Let's really get this company to be a great packaging company,” he said.