Some packaging processors make product for a brand owner or end user, but often the packages find their way to buyers via a distributor. Is the distributor your partner, or just another link in the chain grabbing a cut of your margin?
To answer that question we visited Pont Europe, one of Europe’s leading distributors of plastics and glass packaging (closures and containers), and spoke to CEO Stephen Compson. He led the company to become one of the first, and still one of the very few, packaging distributors in Europe to which overseas packaging suppliers can turn for pan-European coverage; most distributors are still national in nature. “It’s a tough business, but if you can learn how to blend the best of the different cultures, the synergies are great,” notes Compson. “The complexity of the European market is amazing, but it’s a fun challenge.”
Pont calls itself a “quasi-manufacturer” able to help â¨processors with package design.
The changes helped. “By 2007/2008, we had a pretty good pan-European platform,” says Compson, with sales offices and warehouses added in the UK and Poland. All of these changes helped Pont’s bottom line, but the question remains: Why should a plastics processor use a distributor? “Many packaging processors just don’t have the sales force to deal with a myriad of small to midsized accounts. Locally, in the same language, in the same time zone . . . offering service; it’s not easy and it’s costly.”
With Pont, a plastics processor is promised a distributor who will actively court its end customers, says Compson. “You need a love of customers,” he says. “It’s a core belief in our company . . . we want our customers to want to do business with us, because of our products and our service.” Great employees are the key to reaching that goal, he says. “You have to understand your customers’ needs and priorities. Maybe it’s price, maybe it’s good credit terms, maybe speed of delivery. You need to know what it is and offer it.”
Dealing with processors as partners
For the plastics processors it represents, Pont takes an active role. Increasingly the company places its molds, typically two to four per project, in different processors’ facilities. Placing molds at processors in different countries helps both to limit risk and to ensure availability of supply should one source have problems. It reinforces the company’s pan-European footprint as well; most distributors limit themselves to working with plastics processors in their domestic market.
“Generally I expect my suppliers to take the risk for raw material prices,” he adds. “When we find high-quality manufacturers, we put molds in there, but to give a customer steady pricing, I often have to take out hedging terms to cover the currency risk.” The relationship between processor and distributor needs to be “adult and balanced,” he says. “At our major suppliers, we are in their top three in terms of customer ranking. This is a very important strength,” he says, noting a processor rarely will go behind the back of such a large customer.
Building such loyalty with its processing suppliers takes effort, Compson admits. To that end Pont has invested in package design capability so that it is able to help processors with that; he even refers to his company as “a quasi-manufacturer” and insists, “We’re different [from a standard distributor].” Pont was heavily involved with plastics processor RPC (London) to develop a mailbox-friendly blowmolded container project that at first ran into trouble as the end customer was primarily UK-focused. But Compson and Pont helped bring it to fruition: “We bought the molds [for this package] because we knew we could market this package internationally, which made the project commercially viable.”
Despite the broader economic slowdown, Compson says, “My biggest issue right now isn’t selling, it’s finding the right suppliers. Many just aren’t flexible enough to jump when a project comes along.”
By year’s end the company plans to add distribution warehouses in Spain, Italy, the UK, and likely Poland, with its objective to offer local service throughout the continent. “We’re starting to sell more internationally, especially as we develop our own products, but our focus remains pan-European, with local service in every market,” he adds. About 80% of Pont’s suppliers are European.
The company also has made an internal change so that Pont Europe is now the name of the group; previously there was Pont Packaging in Northern Europe and Pont Emballage in France. In another change, it also is increasingly having its molds made so that its own name appears on a package’s base.
The company’s growth path is clear. “In 2001 we had revenue of €12 million, and we’re now triple that. My goal is to double it again in the next five years,” he says. By that time, Compson (55) also intends to have his successor in place. Processors can rest assured that the successor, too, will work for win/win situations. —Matt Defosse