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Tuesday, 31 January 2012 10:41

Coastal Container acquires Best Packaging

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Coastal Container acquires Best Packaging PHOTO: Elijah Brumback
HOLLAND — Good things may come in small packages, but Coastal Container’s growing business is done in packages of many different sizes.

With the recent of acquisition of Best Packaging in Coopersville, the company’s growth has been steady since it was created four years ago. President and CEO of Coastal Container Brent Peterson said the acquisition will make Coastal a much stronger company and add to its stability and profitability as well as its cash flow.

For the last 18 months, Coastal had been trying to obtain Best Packaging in an assets deal. The move would allow Coastal to further grow its customer base that already included Butterball Farms, Haworth and General Motors.

“(Best Packaing) had been struggling,” Patterson said. “It finally got to a point where financially they kind of had to make a move.”

Patterson said Best was working with around $4 million in sales in a 106,000-square-foot space, but they would have had to increase sales to keep that space viable.

“You can do $4 million out of 40,000 (square feet),” said Bill Baumgartner, VP of corporate sales. “For us, where we have additional capacity, the added revenue stream was very attractive to us.”

Coastal’s plant is 235,000 square feet. Since it was able to absorb Best’s entire operation into its facility, it removed all the utilities, management and some direct labor costs. Still, the company did make a few new hires, including two administrative positions and 20 general labor jobs.

“The company has been growing leaps and bounds,” Patterson said. “Now that we just bought Best Packaging, our sales projections for next year are just over $30 million.”

Through the fourth quarter, sales reached roughly $18 million in 2010. Coastal only expects greater returns because of the acquisition.

In 2008, the start-up company was just a small player in the packaging industry with a staff of around 12 and no sales. But that all changed very quickly as Patterson, a former partner at Shoreline Packaging, decided the company wasn’t going to play small time starting out.

“Most plants have started out small and grown over years and years,” he said. “We started out with a focus on building a hundred-plus employee company.”

Moreover, Peterson said building a company in tough economic times actually worked in their favor when it came time to buy equipment and a building and work to set up the company.

“It’s combination of a few things,” Baumgartner said. “One is our level of service and our design capabilities — the other being that we’re only four years old. We were able to set the business up with inherent efficiencies that others don’t have.”

Production since the Oct. 31 integration of the two companies has been smooth. Unlike some companies that have grown by expanding their facilities, Peterson said their capacity allows for effiecent line set-up.

“It’s not cumbersome with lots of forklifts moving around. The plant is setup so that it flows very easily. It’s very lean. Where we receive our material is where we process,” Peterson said.

Read 3190 times Last modified on Thursday, 04 October 2012 00:24

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