Alex Commins gave a candid account of his company Colorpak’s journey to its recent takeover by global packaging giant GPI.
Four weeks before presenting as a keynote speaker at the AIP National Conference last week, Alex Commins was the MD of Colorpak. Today he is VP and GM of Graphic Packaging International, and his family company, purchased by his father in 1985 and subsequently listed on the ASX, has now been absorbed to become part of a global force in the folding cartonboard market.
His opening words of wisdom were a prevailing theme throughout his delivery: “Be prepared to change and be prepared that the pace of change will not necessarily be dictated by you.”
Commins gave a refreshingly frank account of the company’s evolution against the backdrop of a fast-changing industry, providing insight into the challenges along the way and the repercussions of some big decisions, not least of which was the acquisition of then competitor Carter Holt Harvey (CHH).
He described the “blood sweat and tears” of the CHH acquisition and rationalisation, against the backdrop of an industry buckling under market forces.
“In fact, one could argue we had a ‘perfect storm’ that conspired against us,” Commins said.
“The folding carton industry continued to shrink. Not so much by consumption but by production. Local manufacture was being replaced with fully packed imported product.
“This was well assisted of course, by a long term high sustained period of the Australian dollar being well over parity with the US dollar.
“And… the two major retailers in this country were really getting traction with their private label strategy, which only added to the woes of local markets where locally produced products and their associated packaging were now being produced in countries offshore.”
Commins summarised the journey that Colorpak took, navigating an industry where the only constant was change:
“We started with 60% of our revenue being derived from the tobacco industry. Realising this would all end in tears we strategically – in every way from internal systems, plant investments and acquisition targets – went about grabbing the lion’s share of the pharmaceutical industry in this country. To that extent we were very successful.”
The small company that grew up through the industry and was completely independent of a paper mill has now been taken out by one of the world’s leaders in folding carton manufacture – Graphic Packaging International.
“We are now the only fully integrated company in Australia and New Zealand integrated within its own network of seven paper mills.”
As a final comment, Commins said that investment in world class, leading edge equipment had underpinned Colorpak’s success, but in the end the company had become a bit too “highly geared’ and became “stuck”.
However, the US$4bn-turnover GPI has high growth ambitions for the Australia/New Zealand market and therefore the market can anticipate strong investment.
Asked whether, given the chance, he would have done anything differently along the way, Commins replied that he has no regrets, and to have reached this point in the company’s history where he has secured the future for its people is very satisfying.
