John Hayes and Michael Vaughn are cashing in Ball Corp.'s PET bet

10 years ago, at the behest of customers, and after gauging the market''s potential, aluminum and one-time glass stalwart Ball Corp. (Broomfield, CO) lunged headfirst into the PET container market.

Speaking from Ball''s newly expanded PET R&D facility that opens its doors this month, Michael Vaughn, vp technology for Ball''s Plastic Containers Operations, recalls those early PET days as a hair-altering experience.

"Four plants in two years; we spent $300 million and hired 600-that''s why my hair''s white," Vaughn jokes.

"What we didn''t realize was the pain and agony required [to enter the PET market]," remembers John Hayes, VP corporate strategy, marketing, and development. "In the late ''90s, we made the decision that, `Let''s stop. Let''s get our house in order, and let''s focus on getting these plants up and running before we start looking at some of this value-added technology.''" Hayes says that process lasted through 2001, but the self-examination helped make Ball low-cost in the PET bottling industry, and it has given the company the scale needed to tap new markets.

Consolidating its R&D operations into one facility after closing down a Smyrna, GA operation, Ball''s new center employs 60, has a 3-D printer for 24-hour turnaround on bottle concepts, and, as part of a 30,000-sq-ft expansion, features a multilayer preform molding machine and stretch blowmolding unit.

"Coming into 2001, we weren''t having a lot of fun in this business," Hayes says, "because we were on the lowest end of the commodity side of the business." To tap markets with better margins, Vaughn divided opportunities into three areas: existing product enhancements; new-to-Ball; and new-to-market. "100% of what we were doing in that 2001 timeframe was existing product enhancements. There wasn''t really any new technology we were developing."

Due to the highly proprietary nature of the PET container industry-where every dimension of the panels that deflect vacuum at fill on heat-set bottles, for example, is patented-Ball expended most of its resources, searching for ways around territory already staked out.

"In 2001, we didn''t really have any proprietary, patented technology that a lot of others did," Hayes says, "so we had to spend more time, effort, and energy than we''d ever like to admit trying to get around those patents."

Now, with items like a panel-less hot-fill bottle designed in house, the development tables have turned. Ball has 70 patents in hand, and it spends less time on existing product enhancements and more on greater profit centers within products that are new to it or to market.

"I''m fond of telling people that if you took the number of patents that are just on this base," Vaughn says pointing to the panel-less hot-fill bottle, "it would sit about this high," holding his hand a foot above the table. "Today about 70% of what we work on is either new to us or new to market."

Working on the leading edge of the marketplace means Ball faces compressed lead times as beverage heavyweights like Coke and Pepsi battle to beat each other to the marketplace with the latest eye-catching container. In addition to the 3-D printer, Ball brought unit tooling for the rapid production of aluminum prototype molds in house, and it uses finite element analysis software to dry-run processes before steel is cut.

"What I tell folks is, `If you give me an actual design that you''ve signed off on Monday morning, I''ll send you bottles Friday afternoon,''" Vaughn says.

Moving forward, Ball remains focused on higher-margin areas, targeting multilayer barrier applications in alcohol, flavored beverages, and beer. Its long-standing presence in aluminum cans gives Ball an edge with many customers as they consider switching to PET.

"The theory is that kids today, soon to be 21 or already 21, have grown up in a plastic world so glass versus plastic-it isn''t as relevant." To look at the evolving marketplace in another context, Vaughn offers a different analogy.

"Can you imagine being a glass salesman, going into a company, and trying to convince them to convert out of plastics to glass?" Vaughn asks. "It''s a one-way street. I''ve been a salesman; I wouldn''t want to do that."

Tony Deligio

TAGS: Blow Molding
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