CaptionsPhoenix

October 2011

Cuties Enters the Juice Market

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All Plants Are SQF Certified!story pg. 2

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Phoenix Achieves SQF Certification

AAn Industry Update from VP of SalesAnnual closure sales in the U.S. continue to grow at approximately 3% overall, but the recent economic adversity has altered some of the conditions in several sectors. Examples of changing trends are the slowed growth in carbonated beverages and negative growth in personal care products while food closure volumes continue to increase faster than population growth.

Consolidation has been the big story in the food closure industry for the past several years. Now it appears that the tide has reversed and divestitures seem to be the wave of the future as companies try to repair badly dam-aged balance sheets by selling low margin businesses. Rising raw material inputs will put additional financial strain on all suppliers but those with significant leverage will be particularly hard hit.

Capacities in the market have become constrained in the past several years as operational consolidation at the large multi-nationals has brought total capacities down. Low margins and intensive capital requirements have hampered the construction of new capacity.

Polypropylene has historically been an excellent price to performance material for the manufacture of food closures. With the decoupling of the historic relation-ship between crude oil and natural gas, the cost of

propylene has caused significant pain in the packaging industry and the closure industry in particular. While the recent price spike was temporary, the long term trend appears to be up wards. Research into alternate materials and reducing the amount a polypropylene in current products is critical to long term planning.

As the sole supplier to many of our customers, Phoe-nix continues to place a heavy emphasis on risk mitigation. All facets of the business are viewed from this perspective, weaknesses identified and strategies employed. Examples of these strategies include: Financial health review of supply chain, geographical diversity of commodity suppliers, SQF certification for food safety, redundant off site computing systems, back up production molds, multiple production loca-tions, etc.

Phoenix maintains the strongest balance sheet in the industry with a debt to equity ratio below 1:1

Ensuring that our products are engineered to use raw materials in the most effective manner and exploring alternate materials and designs will ensure that Phoe-nix is well positioned to supply the next generation of food closures.

PPhoenix is now SQF Certified at all three plant locations! SQF stands for “Safe, Quality Food.”

“All the prerequisite programs and requirements are aimed at, in our case, providing safe quality food packag-ing,” says Rob Zancig, QA/Food Safety Director.

Phoenix has always had food safety programs in place: HACCP, GMPs, raw material requirements, etc. This certification really exemplifies our committment to food safety to both employees and to our customers.

“SQF Certification has heightened the awareness of Food Safety throughout the whole company, particularly in Manufacturing, Engineering, Purchasing, and Human Resources. It has been very good for Phoenix – and our customers,” says Zancig.

As a result of the certification, Phoenix has changed the titles of four QA employees to

include the phrase “Food Safety.”

“Congratulations to Rob, Aneta, John, Edgar, Tangie and everyone at each of the sites that worked so hard the past few months to make this project such a huge success!” says Tim Ferrel, VP of Sales.

QA Manager Edgar Songco reviews food safety procedures with Supervisor Rickie Ghoston.

by Tim Ferrel with information from the Freedonia Group

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Cuties Moves into the Juice Market

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PCI Personnel UpdatesIt’s been a season of change at Phoenix Closures. Veteran Regional Sales Manager Larry Stickel retired after 17 years at Phoenix. We wish Larry the best of luck in his retirement!

We are equally pleased to welcome Rob Schro-eder into the Northeast Regional Sales Man-ager role vacated by Larry. Rob has vast experience in the pack-aging industry, including fourteen years in sales and maunfacturing. Currently based out of Florence, Massachu-setts, Rob enjoys spending his time outdoors, skiing, golfing and many other sports.

Rob also likes to spend time with his family; wife Carole and children, Rory (8 years old) and Anne (5 years old).

PCI new Regional Sales Man-ager Rob Schroeder.

Congratulations to Becky Alstott has been promoted to Inside Sales Representative. Becky has worked at PCI since 2009, acting as the Customer Account Representative for our west coast customers.

“I am looking forward to growing my knowlege with Phoenix and am excited for my new role,” says Becky.

We are equally thrilled to welcome Diane Leeper into Becky’s former Customer Service role. She brings with her more than 20 years of work experience. Diane enjoys spending time with her family and friends, and also lists watching sports and baking among her hobbies.

We have also added an additional customer service representative to the Phoenix team. Karen Anderson joins Phoenix with several years of packaging industry experience. Her interests include sports (watching and playing them), gardening and being “mom.” We will miss Larry, but are excited for Becky in her new position at Phoenix and are delighted to welcome Rob, Karen and Diane!

When Cuties decided to enter the juice market, they wanted to put out a premium package that would attract consumer attention.

“Overall, marketing’s objective was to have the design of the cap and bottle shape combined together to create an overall impression on the consumer while on the shelf-just having a custom bottle shape wasn’t enough,” says Alby Miller, Regional Sales Manager.

Cuties contacted Phoenix to see if we had the capabilities to develop a completely new and exclusive closure design for their new package.

“We thrive on new concepts and challenges, this was no exception. We have the capability to design any style closure to fit any package,” says Len Ekkert, VP of Engi-neering.

We were chosen as the development partner for this new package because of our quick response to their inquiry, our fast turnaround time on concepts, our ability to interpret/comprehend design ideas, and provide

SLA samples in a matter of days after concept approval.

“It was fun, especially for Dave Anderson, the design engineer assigned to the project. He spent many hours working to perfect the “splash” design the customer wanted on the sidewall of the closure. This design required varying levels of depth in the detail to allow it to be able to eject from the mold without distortion,” added Ekkert.

“We made this project a succes by collaborating on design elements, finding common ground on what was capable with our manufacturing and Cuties’ marketing objectives,” says Miller.

Shorts & Flashes Shorts & FlashesShorts & Flashes

Q u a l i t y a n d I n n o v a t i o n S i n c e 1 8 9 0

Captions October 2011

Captions is published by the Marketing Department of Phoenix Closures. Your comments and suggestions are always welcome. Please mail to:

David Szala, Executive EditorPhoenix Closures, Inc.1899 High Grove Lane

Naperville, IL 60540-3996

Email: dszala@phoenixclosures.comPhone: 630.420.4750

Copyright 2010, Phoenix Closures, Inc.

Executive Editor, David SzalaArt Director, Katie McCarthy

PPhoenix to Open Plant in IndianaPhoenix Closures is planning to open a new manufacturing plant in Greencastle, IN. Located approximately 45 minutes west of Indianapolis and minutes from I-70, the 250,000ft² facility will sit on 57 acres of land and is scheduled to begin produc-tion in late 2012. Fueled by organic growth, this will be our third new site since 2000.

Phoenix worked with The State of Indiana and the Greencastle/Putnam County Development Center to find a location that met its particular needs.

“In addition to meeting our specific manufacturing requirements, the Greencastle site is located near our strategic markets and has potential for growth,” explains Ed Buck, VP of Manufacturing. “The availability of an existing crane bay and rail service made the building a viable option for rede-velopment.”

The State of Indiana has offered Phoenix assis-tance with renovation that will convert this under-utilized property into a food-grade packaging manufacturing facility. The City of Greencastle will provide incentives in the form of tax abatements, infrastructure improvements, and training grants.

CPaleo Named 2010 Kohs Scholarship Recipient

Congratulat ions to Gerardo Paleo, the 2011 Kohs Scholar-ship winner! Gerardo is the son of Efrain Paleo, Lining Main-tenance , and Laura Paleo.

Gerardo wi l l be at tending Pomona Col lege in Clare-mont, Cal i fornia th is

fa l l . He wi l l be major-ing in Computer Science.

In high school , Gerardo was the captain of h is cross-country and track teams, the President of the Hispanic Honor Society, a 2011 I l l inois State Scholar and a member of the Nat ional Honor Society. He loves to read and spend t ime outdoors. Addi t ional ly, he has a strong interest in technology, sociology and educat ion.

Gerardo worked in the Napervi l l mainte-nance department th is past summer as a part of the PCI col lege student summer hire program.

Congrats again to Gerardo and his fami ly! We wish you the best of luck.

2011 Kohs winner Gerardo Paleo

Phoenix Closures’ future Greencastle, IN plant.