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Mergers and Acquisitions Change Tube Industry

Consolidation means fewer, but stronger, manufacturers.

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By: Jamie Matusow

Editor-in-Chief

The past 12 months have been very busy for the tube industry. For not only did the manufacturing community of tube producers supply some 200 million tubes to the cosmetics and personal care market, but four acquisitions involving major tube companies have also reshaped the business.

On Sept. 2, CCL Industries announced it had sold four non-core business units in its Container division including: CCL’s aluminum tube plant in Harrisonburg, VA; the laminate tube facility in Swedesboro, NJ; a plastic jar plant in Plattsburg, NY and the San Jose, Costa Rican facility that makes a variety of containers for the Central American market.

IntraPac, a private Ontario limited partnership, 50% owned by Douglas Brent, Hollis Brent and Gary Ullman and 50% owned by CCL, purchased the operations for approximately $55.7 million in cash and $9.7 million equity (according to current U.S. – Canadian currency exchange rate). Ullman, a former senior executive of CCL, is president and chief executive for IntraPac.

On Aug. 14, McCormick & Company completed the sale of substantially all the operating assets of its packaging business including Tubed Products to Kerr Group, Inc., Lancaster, Pa for $142.5 million.

Amcor Plastube offers a variety of finishes and decorating effects as well as caps and closures for its tubes.

Steve Rafter, president of Tubed Products, said the transition would be seamless and that there would be no layoffs or changes in personnel at its Easthampton, MA, plant. “It won’t have a huge impact on the business in any practical terms,” said Rafter. “Business will continue as usual.”

Part of the same acquisition, Kerr has also taken on McCormick’s subsidiary, Setco Inc. of Anaheim, CA, which also manufactures tubed products.

Effective Jan. 1, Silgan Holdings Inc., Stamford, CT, acquired Thatcher Tubes LLC, a privately-held manufacturer and marketer of decorated plastic tubes serving primarily the personal care industry. The purchase price for the assets, including additional production capacity recently installed and currently being installed, was reported to be $32 million. Thatcher continues to operate facilities in Woodstock, IL, and Culiacan, Mexico under its original name.

On Dec. 6, 2002, Montebello Packaging, Oak Park, IL, acquired Ever Corp. Newport, AR, which continues to operate under the Ever name. Ever sales and marketing, with a focus on household and industrial products, are independent from Montebello.

“The M&A activity in the tube field is part of a big move to consolidate—among end users and suppliers,” said Ben Miyares, vice president of industry relations at PMMI (Packaging Machinery Manufacturers Institute). “In general, this means end users will have suppliers who can follow them around the world that are larger and have more resources to draw upon. While it may mean that there are fewer remaining tube suppliers, they will be stronger and more able to respond to customers’ needs.”

A New Tube Manufacturer in Town
In a “turn-about is fair play” kind of move, the Indian company Essel Propack Ltd, the world’s largest manufacturer of laminated tubes, opened a new $25 million plant in Danville, VA, this past August. The plant allows the fulfillment of a contract signed by Essel Propack in April, 2002, with Procter & Gamble to supply 100% of P&G’s North American requirements. With the opening of the Danville plant, the company’s 17th unit, EPL becomes the first Indian company to have a presence on all five continents.

New Officers for Tube Council
The Tube Council has elected new officers. The president of the organization is now Jean-Paul Meausoone, senior vice president of Cebal Americas. Hakan Carlsson, president of Norden Inc., is vice president. Douglas Stewart, vice president of sales and marketing for Montebellow Packaging, is treasurer.

Meausoone, who has 22 years of experience in the tube industry spanning Latin America, Europe and the U.S., commented on the tube industry in North America, saying, “The biggest change is growth in all sub segments, increased globalization and more sophistication of product.

“In the U.S., there is a greater mix of offerings in terms of functionality and shape. It used to said that ‘a tube is a tube,’ but now there is an awareness that the tube is a wonderful package to use. In order to maintain growth, the industry needs to continue to increase sophistication, service and quality,” Meausoone stressed. He added, “The companies in the U.S. are looking to improve differentiation, quality and service. There’s good competition, which urges everyone to work hard.”

Tube Sales Are Up, So Are Lead Times
North American tube manufacturers are so busy that lead time has stretched to 10 to 15 weeks, according to Christopher White, president of The Filling Station, a company in Walpole, MA that specializes in filling tubes. “Domestic tube lines are all busy,” White said, adding, “We are now filling tubes that were made overseas and shipped here empty.”

Asked why domestic suppliers aren’t expanding capacity, White explained that “It takes 18 months and about $10 to $15 million to start up a new tube line. At other times when supply was tight and domestic suppliers put in additional capacity, by the time it was on line, the situation had changed and they were left with excess capacity.”

Despite increased competition from overseas, domestic tube sales are generally ahead of last year. CCL Plastic Packaging’s tube sales are ahead of 2002, according to Jim Cooper, vice president sales and marketing. Tube sales for Cebal Americas, Norwalk, CT, have also experienced steady increases in 2003, according to Bertrand M. Daru, marketing manager for the company. “Our customers want to use tubes for new launches because consumers like tubes,” Daru stressed.

This year’s sales performance is similar to last year’s except for a slow down in September, according to Jennifer Hackett, marketing manager for Amcor Plastube North America, Waterloo, Quebec. The company’s new plant in Allentown, PA, is now running at full capacity, producing Amcor’s polyfoil and coex lines as well as monolayer products.

For Montebello Packaging, Oak Park, IL, skin treatment and anti-aging products have been the latest categories to turn to tubes for packaging, according to Anna Sipowicz, product manager.

“The ease of dispensing small and accurate amounts for application, combined with the variety of tube sizes and closure options has helped to differentiate the packaging,” in these categories, said Sipowicz.

Innovation is “The Shape of Things to Come” at Tubed Products.

It’s Hip to Be Square
Innovation at Tubed Products (TP) is expanding under Kerr, its new owner, according to Jim Farley, TP’s vice president of sales and marketing. “Our new tagline is ’The Shape of Things to Come,’ and we have several new things being patented that we’ll be launching soon,” said Farley.

New at HBA was the Rectangle, a tube with a rectangular cap supplied by Zeller Plastik. Farley explained that the head of the tube is shaped to fit the cap, giving the length of the tube corners/sides corresponding to the cap. “The cap, a push on with a lock-on system, goes on in line and is oriented,” he added. The Gem is another new shaped tube from TP, which begins with a cap from Polytop Corp. with six sides similar to facets on a jewel.

TP has also recently introduced two oval plastic tubes in 1.75- and 2-inch diameters with capacities ranging from 2.6- to 9.4-fluid oz. Flip-top oval dispensing closures are oriented to the graphics on the tube.

Aveda’s PCR tubes are supplied by CCL Plastic Packaging.

PCR Materials for ’Green’ Tubes
CCL Plastic Packaging has developed a technology that enables it to integrate virgin and recycled resins (PCR) and produce an environmentally friendly or “green” tube suitable for cosmetics and personal care products. The recycled content is about 25-30% and CCL can also make a PCR closure with the same ratio of recycled material, according to Cooper.

CCL’s technology manages any variances due to the recycled material through its proprietary manufacturing process. Aveda, which makes environmental responsibility a part of its mission, is introducing the CCL PCR tube into its product lines.

“CCL Plastic Packaging is a true packaging partner,” said John DelFausse, Aveda’s vice president of product development. “They understand the importance of our mission and have joined us in our commitment to promote environmental sustainability. Aveda’s product lines include many tubes and using CCL’s PCR tube enables us to produce a quality product while doing our part to help lessen the impact on global resources.”

CCL’s PCR tube is available in most standard tube sizes (.75- to 2 3/16-inches) and is compatible with B22-400, M8, M5, ND20.6, and dome (3/4-inch only) head/neck finishes. Because the outer layer of the tube is made from virgin resins, PCR tubes may be decorated in the same fashion as standard resin tubes.

Cebal offers a metallized cap for its angled applicator tip tube.

Tubes with Specialty Applicators
Cebal’s tube with an angled applicator tip, originally developed for lip products, is now being used for eye shadow and nail polish remover, so the “consumers can apply the product directly without touching it with their hands,” said Daru. The company can also supply a metallized overcap for the tube.

Norden AndBro supplies a variety of tubes from its Pitman, NJ facilities and filling equipment for tubes from its Branchburg, NJ location. Handsfree Applicators Inc. of Fountain Valley, CA, partnered with Norden to create a delivery system for lotions and gels that allows the application of products such as sunscreen, sunless tanning products and topical analgesics without touching the formula with one’s hands, according to Deborah Spaeth, Norden sales.

QuickShave by Handsfree is a three–in-one shaving product. The tube holds shaving cream, with a sponge applicator at one end and a detachable razor blade at the other end.

Norden AndBro offers a metallic label and a custom cap for an all-chrome look.

Tubes That Shimmer Shine in Beauty
Responding to a trend to pearlescent and luminescent colors, Cebal has developed Opal colors, four shades within its range of samples, with custom colors also available. The Opal Shades are offered in both monolayer and coex and are available in all tube diameters from 5/8- to 2-3/16-inches.

Montebello Packaging specializes in aluminum and laminate tubes, where the fashion also favors shimmer and shine. In laminate tubes, “Our customers have taken a strong interest in the silver laminate material because it provides the shiny look of an aluminum tube with the material flexibility of a stylish laminate tube,” said Sipowicz.

For aluminum tubes, metallic and pearlized finishes seem to be a preferred look with a colored or clear cap to accent the tube for Montebello customers.

Norden AndBro can now provide an upscale elliptical tube in an all-chrome look by utilizing a high tech metallic label and a custom metallized cap, according to Spaeth, who explained that “Norden’s patented sealing process allows full coverage of the tube, providing a dynamic new look.” Tubes are available in both 1 1/2- and 2-inch diameters.

Decorating Enhanced
In August 2003, Tubed Products added five-color, in-line silk screening to its decorating capabilities.

New decorating developments from Amcor include an invisible overlap that can produce a 360 degree decoration done on offset printed tubes. “We are also working with a lot of metallic polyfoils and hot stamp projects. We’re trying to focus on decorating rather than labels,” Hackett added.

Cebal has also added the capability of silk screening up to five colors in one pass with excellent registration and quality, according to Daru.

Airless Technology Keeps Bulk Fresh
Cebal’s Airless tube is a one-inch round that utilizes a special insert to prevent airflow back into the tube. As the product is dispensed, the tube collapses. When the pressure is released, the tube remains in the collapsed position with no air flow back into the tube.

Such sophisticated technology answers specialized needs of some contemporary formulas that are sensitive to oxygen. “Some customers also want to remove preservatives, requiring airbackless and/or better barriers,” said Jean-Paul Meausoone, senior vice president of Cebal Americas.

Laminates for Added Barrier Benefits
In the U.S., Alcan’s laminate business is growing in single digits, according to Scott Denley, marketing manager. The company, based in Baie d’Urfe, Quebec, offers Tubalflex, a laminate consisting of an aluminum foil barrier sandwiched between layers of polyethylene. “Alcan is working with some customers to reduce the thickness of the aluminum layer from 40 microns to 30 microns,” said Denley, adding, “This reduces the cost without performance loss.”

Alcan manufactures all its laminates in Germany and ships the rolls to tube producers. Denley said, “The primary application for our laminates is for dentifrice products and some cosmetic applications.”

Alcan also supplies non-foil tube laminates that are used more in cosmetics and personal care that pair Ceramis, a proprietary Alcan material that offers an excellent moisture barrier and flex-crack resistance, with other plastics such as Pet or polyethylene. Denley explained that Ceramis is a silicon oxide (SiOx) coating on a film, such as PE, PET or nylon. The film can then be applied to tubes as a barrier. Ceramis can be supplied in either an opaque or clear coating form. On clear films, the clear Ceramis coating allows a product’s color to show through the tube.

Montebello used Ceramis for the tube for CBG Enterprises’ Cleartone Deep Pore Oil Extracting Mask. The tube is printed in three colors on the opaque, plastic barrier laminate material and is topped with a stand-up, flip-top closure.

Ceramis provides superior barrier properties against moisture and oxygen. Sipowicz noted, “The plastic barrier laminate provides good memory by retaining its shape and is dent resistant. It also offers protection over an extensive period of time and has an exceptional aroma barrier.”

Cebalcap is available in a range of sizes and bi-injected colors.

The Cap’s the Thing
“Customers are always looking for something new and different in dispensing closures,” said CCL’s Cooper and the company is hoping to please with a thread-on cap that always orients correctly.

“Consumers complained that the push-on caps that orient to the front of the tube cannot be removed, so they couldn’t get out the last bit of product. Also, with a push-on cap, it’s impossible to use an induction seal over the opening to assure purity. With the twist-off cap, that’s not a problem,” Cooper said.

Cebal Americas has added a 1 3/16-inch cap to its popular Cebalcap line, according to Daru. Cebalcap has softer, tapered edges, and is offered in several diameters in opaque, translucent and pearlescent colors, as well as matte and gloss finishes. And for a clean, sleek look, the snap-on cap’s opening feature is always precisely aligned to the tube graphic.

Super Soft Orienting Tube Closures from Zeller Plastik are softer and more contoured, with a re-sculpted recess to fit the thumb’s natural contours, according to Nancy Kane, marketing coordinator at the company. “Internal engravings and knock-out pins have been removed to give the product a clean look when molded in a transparent color. The push-on finish allows for easy orientation of the thumb recess to the front of the package,” Kane explained. Both matte and gloss options are available.

Zeller Plastik can also supply customized orifices for tube dispensers, creating for example, a heart or star-shape for kids toothpaste. “It’s an inexpensive way to give a different look and make a product fun,” noted Kane.

Mac’s FTC19700 is a snap-on, child-resistant cap.

Closures Offer Added Security
Mac Closure Specialists, Waterloo, Quebec, has developed the child-resistant, senior-friendly FTC19700, a 20mm snap-on cap for tubes that offers one-hand opening and a re-securing feature. Mac has developed a sample mold and supplied samples to various clients. “The FTC19700 could be in production in six months,” stated Gilles Decelles, president and general manager for Mac. “There’s nothing else like it. In testing we did, kids couldn’t open it and seniors had no problem,” he added.

To open FTC19700, the bottom skirt of the cap must be squeezed on two arrows, located 180 degrees apart in the front and back. The action creates enough pressure to deform the skirt, releasing and opening the top lid. A “click” is heard as the flip cap opens and again when it is securely closed.

The FTC19700 is lined with a two-piece FDA-approved heat induction seal with a PE foam backing. The induction seal offers a tamper-evident feature and the foam backing serves as a secondary seal.

For products that require tamper evidence, Cebal offers a safety shrink sleeve that is applied to the cap before the cap is snapped onto the tube. The sleeve is perforated for easy opening.

There has been an increase in requests for shrink-banded Cebalcaps, according to Daru, who added, “The consumer who buys the tube, wants to be sure that they are the first to open it.”

Rexam Closures & Containers, Evansville, IN, offers a one-piece, senior-friendly, child-resistant (CR) tube closure for the personal care market, which passes CPSC protocol testing, according to Peter Goshorn, director of sales, health & nutritional for Rexam.

Rexam’s TubeLoK (T-CR) closure, featuring a push-and-turn mechanism, was developed for products that come in the form of creams, ointments, gels and jellies.

“The TubeLoK works with a familiar push-and-turn mechanism that is easy to operate while remaining child resistant,” said Goshorn. As the closure is secured, a “click” indicates the closure is locked onto the tube’s neck. The closure system creates a spring effect when downward pressure is applied, locking the cap in place when released. The TubeLoK also features a plug that ensures package seal integrity and prevents pre-dispensing of product while removing the closure. Its 18mm size and one-piece design is a cost effective alternative to two-piece CR closures.

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