by Mark Arzoumanian, Editor in Chief
Independent folding carton converter shows how investing in research and development can pay off.
This past spring Colbert Packaging Corp., Lake Forest, Ill., was awarded the Paperboard Packaging Council's Innovation Award for its BlisterGuard® carded package. It worked with The Topps Company, Inc., an international marketer of collecting cards, to effectively display Major League Baseball cards while preventing theft and cutting production costs.
Recently I sat down with Jim Hamilton, president, who began his career in the folding carton industry nearly three decades ago. He's also a retired brigadier general from the Illinois National Guard. We discussed not only the genesis of the Topps project but the challenges he faces and what the future holds for Colbert as an independent.
OBM: What do you find is your greatest day-to-day challenge?
Jim Hamilton (JH): It's handling all the little things that come up, be it a personnel issue or a pricing issue with a customer. It's trying to get through the 10- to 12-hour days and make it all happen. But really what it all boils down to is being more efficient, doing more with less, watching our costs. Nobody wants to give you a price increase anymore. So we're trying to do things more efficiently. All folding carton companies tend to want to get the fastest, newest presses that do upwards of 15,000 sheets per hour. But you can only go so far with that.
The greatest challenge is watching those external things but at the same time making sure that the people we have here are happy and proficient in what they're doing and are trained accordingly.
OBM: Where do you want to take the company in the next few years and why?
JH: What we want to do is continue growing in our specialty products. There's BlisterGuard for the nonpharmeceutical industry. Its counterpart in the pharmaceutical industry is called PharmaDial®. With both of these items we have patent-pending applications out. They're going through the testing phases right now. That should be something we can brag about down the road. We've been promoting them for the past two years through trade shows such as PackExpo. So we've got those two, along with a couple of others. One is called Zip-Sert®, which is being used by a couple of customers. It's a folding carton that has a side window with a package insert attached to it. Another one we've been using is Box Pocket™, which is a framed view-type carton that can come into a customer's location with a different product, be it a booklet or two tabs of antacid or a new over-the-counter type drug that can be fixed to the inner cell.
Everybody can do a reverse tuck carton. But when it's a combination of packaging, whether it's paperboard and paper, paperboard and plastic, paperboard and metal - those are very special applications. And that's why we have a department here whose goal is to create new ideas. That's rare for a company our size to invest heavily in research and development. We recognized this need four years ago.
My five-year plan is to expand the use of our specialty products, to continue to enhance our relationship with the pharmaceutical industry (over 50 percent of our sales are pharmaceutical and healthcare), and double the value of the company. Not just double the sales, but double the value of the company.
OBM: We've all read about the mergers and acquisitions that have occurred in the folding carton industry over the past few years. Why hasn't Colbert already been acquired by an integrated or merged with another independent? What is the value of remaining independent?
JH: Charles "Bud" Colbert purchased this company in 1959. He bought a Chicago-based rigid setup box company called Kroeck Paper Box, a company started in 1892. His goal was to get into folding cartons, that's what he knew. Up until his death in 1995 he had companies, the big names in the industry, come up to him wanting to buy his company. This location, one of three, is a folding carton plant laid out from scratch just to do folding cartons. In my position I receive [offer-to-buy] letters once a week. Most of them end up in the circular file but some I keep on the side just in case I ever need to pull that file out for a board meeting. But our board and the ownership of the company, which still includes the Colbert family and several upper management people, has decided it likes to stay independent because it allows for greater flexibility to operate the company. Some of us in key positions have worked elsewhere. We appreciate the flexibility of a flat organization and the quick decision making that it can yield. It gives us a greater latitude to effectively do our jobs better.
The other part of it is that this is a very family-oriented environment. Colbert Packaging has a lot of people who have been here 30, 40 even 50 years. We hand pick our people. Bud Colbert said the value of his company equaled the value of his people and quality processes. And if he had valued people and a quality process, then that equaled pleased customers. It's like an equation.
So we really value what people do here and that leads to a lot of good things that we've done, as in housekeeping, treating this like your home.
We like to take total ownership of the relationship with our customers. We don't like the idea of bids and auctions but sometimes we have to play in that arena.
OBM: How did the relationship start with Topps on the blister card package?
JH: It started with them at the end of 2003. The card company saw an article that was on BlisterGuard. It talked about a new product, introduced by Colbert Packaging, that competes with clamshells. It also talked a lot about theft deterrence, that BlisterGuard is a very difficult package to get into. And it's less costly than the alternative: a clamshell. Topps called up, we talked, and they sent two people in from their Pennsylvania operation. They spent a day and a half with us, taking a tour of our company, learning firsthand how this product could work for them. Then we started the prototypes, did the costing, and then we brought it one step further. They said, "Where are we going to package this?" And we told them we have this operation down in South Bend, Ind., called Just Pack It, a 50/50 joint venture between Colbert and Combined Technologies, a Lake Forest, Ill., company. They saw that Colbert could not only print, cut and glue the product but also do a turnkey for them. So we procured the blister along with converting our BlisterGuard. And then Topps shipped us these very expensive collector cards in foil packets. We have produced these for the last year in Indiana.
(Reprinted from the June 4, 2005 issue, Official Board Markets. All Rights Reserved.)