How Visy Reacts to Growth Signals

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How Visy Reacts to Growth Signals

January 31, 2008 - 20:00

Go where the growth is. It's a straight-forward maxim in the business world. But not all companies are willing to commit their financial resources to move quickly enough to take advantage of burgeoning growth opportunities.

Take what's happening in the Australian state of Queensland right now. For more than a decade, its economy has been expanding at a 3 percent annual rate — thanks in large part to a booming mining industry. Growth in coal and base metal exports is strengthening, and business investment stands at about $20 billion (U.S.), according to local government officials.

State Manager Peter Allen examines one of the Göpfert rotary diecutter's diecutting stations.
State Manager Peter Allen examines one of the Göpfert rotary diecutter's diecutting stations.

Most importantly, this growth is creating jobs in Queensland, which translates not only into housing but packaging needs, both durable and nondurable.

A Need to Expand

Visy Board, Melbourne, the country's largest corrugated box maker, has been running a highly productive box plant in Carole Park (west of Brisbane) since 1977. For the past five years, this operation has been running at full capacity. In addition, the building itself has reached its expansion limitations. The choice became simple: Expand, or risk losing business to your competition.

Visy Chairman Richard Pratt, 72, is a fierce competitor who shows no signs of slowing down, even when many of his peers are strolling the golf course or the beach. Instead, he enjoys hopping into his private helicopter and visiting his box plants and board mills for quick inspections.

Employees never know when he might pop in for a visit. Once he arrives, he will quickly tour the operation. He might ask questions about finished goods inventory levels or the damaged rolls he sees in the corner of the plant. Or he might check to see whether changes he recommended during his previous visit have been implemented.

He is well aware of the situation at the Carole Park box plant, which has already expanded seven times. By the summer of 2005, a decision needed to be made on how to meet Queensland's growing box demand. For Pratt, it was an easy one.

Why Wodonga? Miniflute Packaging
Why Wodonga? Miniflute Packaging

In August 2005, he announced that a $48 million box plant would be built on a Greenfield site in Yatala, south of Brisbane. Since 1998, it is the fourth box plant for Visy in Australia. The Carole Park operation can convert up to 100,000 metric tons per year; Yatala, which employs 55, is currently converting 50,000 metric tons per year. That converts into about 1,000 tons per employee per year. Pratt's goal is to raise this converting capacity to 1,500 tons per employee by 2012.

Plant construction started in June 2006, with a goal of producing boxes by that September. But meeting local government rules and regulations pushed the actual start-up to the end of November 2006. The corrugator started producing sheets a few weeks later.

The silver lining? The 247,500-sq-ft plant, which serves the beverage, meat exporting, and produce industries within a 1,240-mile radius, was built right on budget. The facility uses as much natural light as possible during the day, minimizing energy costs.

Tumut Board Mill Blends in
Tumut Board Mill Blends in

"Yatala is our chance to go to the next stage of what a corrugator plant is," says Peter Allen, the Queensland state manager.

That's not just idle talk. The plant, which runs one corrugator shift and two finishing department shifts, features:

  • 1. A 110-in. BHS B-, C- and E-flute corrugator that can change flutes in two-and-a-half minutes and averages close to 1,000 ft per min. A lot of preprinted linerboard is run on this machine. Allen likes BHS because he can sit down and work with the company on issues like minimizing waste. Its people listen to his needs, he adds.
  • 2. A Dücker material handling system that feeds the plant's four finishing machines. It processes 466 sheets per minute off the corrugator into stacks that are transported to these machines. The system can constantly track specific sheet stacks. It also allows the plant to build higher stacks.
  • 3. A Visy rollstock warehousing software system that can provide a profile of each roll coming into the plant. The plant only uses two sizes of paper, 100 and 110 in. It also tracks tons used per day.
  • 4. Finishing machinery that includes a four-color Emba 170 flexo folder-gluer with diecutting (and a top speed of 400 cartons/minute), one Göpfert HBL rotary diecutter, and two 108-in., four-color Göpfert Evolution HBL dual die rotary diecutters, running side by side. A five-man crew operates both of them simultaneously (two men to each machine and a floater). This allows them to set up and diecut 10,000 sheets per machine, per hour, nonstop. The machine's size allows crew members to walk into its printing stations to change rotary dies.

Allen admits that as production continues to ramp up, balancing corrugator sheet production with converting capacity is a constant challenge.

  • 1. Finished box delivery is accomplished through an automatic docking system, wireless barcode scanning and proof of delivery management systems, and 14 full-height trailers with load restraint systems. If necessary, specific orders running on finishing machinery can be tracked, pulled out of the system, and delivered early. Trailers are loaded 20 hours a day.

Pushing the Envelope

Pratt has always been willing to invest in box plant automation, even if it means a setback or two. Sixteen years ago, he established Visy Automation. For the past five years, this division of the company has been working with Hartness International, Greenville, S.C., a manufacturer of packaging equipment and conveyors for material handling, to develop material handling solutions for his plants.

Unlike most other mills, you won't see a huge plume of smoke rising from Visy's board mill in Tumut, Australia.
Unlike most other mills, you won't see a huge plume of smoke rising from Visy's board mill in Tumut, Australia.

Most recently, HartnessVisy Automation, formed in 2006, has developed robotic handling systems. One of these systems is now running at the Yatala plant. It places labels automatically onto pallets without any human intervention.

Box plant automation is becoming more critical. For example, orders for Visy's two Queensland plants go through the Carole Park operation, where all customer service employees are located. Which plant actually completes an order depends on which one can complete it most efficiently. So there are times when one customer's order (for multiple boxes) could be fulfilled by both Brisbane box plants.

Today, orders for boxes average 1,500, Allen says. The Yatala plant's just-in-time delivery system is still a work in progress, as some bugs still need to be worked out, he admits. A make-and-deliver philosophy drives the operation, with relationships and order size still playing a role in how quickly customers receive their boxes.

Two 108-in., four-color Göpfert Evolution dual die rotary diecutters run side by side. A five-man crew operates both diecutters simultaneously.
Two 108-in., four-color Göpfert Evolution dual die rotary diecutters run side by side. A five-man crew operates both diecutters simultaneously.

"Customers are demanding speed to market, delivery accuracy, and high-quality boxes," Allen says. "Our aim is to be the lowest-cost and highest-box volume producer."

He points out that many of the plant's meat, fruit and vegetable customers are a direct result of recent population growth in Southeast Queens-land. And, as mentioned earlier, the population growth is directly attributable to the mining boom in this Australian state.

"Every day we're trying to save money on labor and reduce waste," Allen states. "We're always thinking about how to lower costs." And although the plant has been running for just a year, he's already looking to expand to a three-knife corrugator and add another BHS Modul facer so the plant can produce doublewall.

Pratt's contagious business philosophy has obviously rubbed off on Allen: Never be satisfied with what you have; always be looking for ways to improve productivity and cut costs.