Central Jersey is known as the nation’s medicine chest, and it is also a center for personal care products. And while the mega pharmaceutical and cosmetic companies may have their ups and downs, the industries that support them continue to flourish. Take label manufacturers. Most people never stop to think that the process of labeling jars and bottles is a mammoth industry fueled by the very latest technology.
CCL Label, a division of CCL Industries that develops and prints labels, numbers the world’s largest consumer and healthcare companies among its clients. Its brand-new, 47,000-square-foot building in Robbinsville and its upgraded cohort in Hightstown exemplify where the company is today and where it’s going.
The label company has owned the two plants since 1998, when it acquired their previous owner, Sonoco-Engraph. CCL Label is the leading global supplier of decorative, informational, and promotional labels, and, for the past five years, has been growing rapidly. Today CCL Label has 40 separate operations in 15 countries.
Two of its acquisitions involved product label printing operations owned by Avery Dennison, known worldwide for selling office labels. In 1995 CCL acquired all of Avery’s North American pressure sensitive product label printing operations, except for those involving automotive labels. (Avery Dennison retained its office label business, supplying the brand that has become virtually synonymous with the product.) In 2003 CCL acquired Avery’s European division comprising three plants specializing in healthcare labels.
The new strategy for CCL Label — involving identical printing technology worldwide, specialized plants, and an entrepreneurial management structure — as well as the idea for the new building, came from Geoffrey T. Martin, who joined as president of CCL Label in 2001 and in May, 2005, became president and chief operating officer of CCL Industries. Martin asked Doug Ulbrich, director of facilities engineering worldwide for CCL Industries, to put up a building that would be special with “a little pizzazz in it.” Ulbrich selected O’Connor Gordon Pratt, an 11-person architectural firm founded by Eugene O’Connor on North Main Street in Hightstown. O’Connor, the partner in charge of the Robbinsville project, was already working with Ulbrich on projects for CCL in seven other countries.
One of the architects who worked on the new building, David Laverde, says that CCL wanted a “modern, New York look” to the facility, expecting it to be its showcase, both for its appearance and for its effectiveness in matching form to function. Ulbrich adds that the new facility is the “culmination of projects all over the world, the best of all plants strapped into one.”
The design of the new building put process first — and not just the localized process of putting out a product, but also its integration with CCL Label’s network of plants worldwide. Laverde developed the building by studying the path a product follows, from sales and the customer’s conception to design to printing, quality assurance, and distribution. Referring constantly back to this process, in probably 30 iterations, Laverde created a building that mirrors the product’s development. “If you put together a bubble diagram of how people interact, that is how the building is designed,” adds Ulbrich.
Laverde had to learn how CCL Label runs and feeds its presses, finishes the goods, and ships them out — the whole flow of work. “It’s more complicated than architecture,” he claims. He worked hands on with the project manager, estimating that he developed about 30 different layouts, improving the design day by day.
On the outside of the building Laverde used insulated white, primarily rectangular panels, hung on steel, a la the modernist architect Le Corbusier. Large stair-step structures shape extensions off the left and right of the building, not only adding to decorative interest, but also hiding two courtyards, one off the customer approval room and the other off the employee cafeteria. Each courtyard is bordered by a curving sitting wall.
Per Martin’s request, Laverde also provided a grand entrance, with help from designer Tracy Dupont. On the far wall of the largely glass-walled entrance area is a backlit, blue, crinkled-glass wall topped by the company logo. The “CCL blue” of the logo also appears, more subtly, in the carpet and in the rectangles that decorate the front of the receptionist’s desk. The front desk is also accented overhead with a wavy structure that draws people in to the front desk. “I like curves,” says Laverde. “I’m a modernist at heart.”
Modern architecture is actually what pulled him into the field. Laverde grew up in New Jersey, the son of a toolmaker, and at age 16, during a family trip to Barcelona, Laverde saw the work of architect Antoni Gaudi and immediately decided, “I want to be an architect.” He graduated from the New Jersey Institute of Technology with a five-year bachelor’s degree in architecture in 2002.
Anyone who enters the Robbinsville plant expecting noise, dirt, and the clanging of presses will be pleasantly surprised by the quiet that reigns throughout, despite the absence of opaque walls, and, for the most part, any walls. Stepping from the entrance area, one enters a large room, where literally everyone can see each other. In the middle sit the people in customer service, product engineering, graphic design, and administration.
The plant manager, Kelly Hadler, sits in a space that is open in the front, but has a glass side wall. The only rooms that have four walls, glass of course, are a conference room; the accountant’s office; and the plate room, where the design is put on a cylinder.
A second very large space houses the printing presses, quality assurance, packaging, and shelves for short-term storage. This room is separated from the office space by a wall with large glass windows extending across it.
The lighting in the building is filtered through glass, so that customers, designers, and printers all see the labels under the same light.
Hadler is proud of the clean process in the plant and says that every label is inspected, one by one. “We are known for our high-end cosmetic printing and our very attractive products,” he observes. The presses allow for combination printing with three different printing processes: hotstamp (to apply for metallic foils), screen printing, and ultraviolet flexography are all incorporated into one label and done on one machine. The high-end graphics computers used to create the labels are the same Silicon Graphics work stations used in movies like “Jurassic Park.”
After printing labels are certified to ensure they meet customer specs, they are prepared for distribution, either by way of rapid delivery Fedex and UPS or, for larger orders, tractor trailers. Turnaround is usually 48 hours from the time a label hits production until it is out of the door. Inventory is negligible.
Hadler, who grew up in Minneapolis, has spent most of his adult life at CCL; his father was as a pressman at the plant in Sioux Falls, where Hadler started in the same position. After eight years in Sioux Falls and a year and a half in Hightstown, he became plant manager in Robbinsville last year.
Another part of the CCL strategy is its significant investment in state-of-the-art printing technology that is similar worldwide. In 2003 the Hightstown plant invested in new equipment and has added more since. The Robbinsville plant began replacing presses while still at 8 Marlen Drive.
The printing platforms in both plants share graphics capabilities, and their order systems are meshed. As a result, different sites that serve the same market can exchange work over the Internet, providing backup for each other. “In the case of a disaster, like a tornado, other plants could support any plant in the network with cross production within hours,” says Ulbrich. With its upgraded equipment, CCL can launch the identical label from any plant in the world, providing the production backup needed for quick turnaround. “We want to get the label to the customer when they need them,” says Ulbrich.
CCL Label has also expanded its operations significantly through acquisitions. The Hightstown plant has gone through several hands. The original printing company at that location, Cricket Converters (named after a child’s card game), supplied labels to the pharmaceutical and health care markets and was acquired by Sonoco-Engraph in 1995. Then CCL Label purchased Sonoco-Engraph in 1998.
Kevin Kollman, the general manager of the Hightstown plant as well as a plant in Baltimore and two in Puerto Rico, represents another CCL Label acquisition. Kollman’s dad had purchased a printing company in Baltimore in the 1980s. In 2000 Kollman invested in the business, Lucas-Insertco, which manufactured inserts and outserts for the pharmaceutical industry; he became a partner and expanded the company by purchasing an operation in Puerto Rico.
With his father ready to retire in 2003 and already having a strategic alliance and partnership with CCL, Lucas-Insertco sold out to CCL and Kollman moved to Yardley, Pennsylvania, to take his current position in Hightstown. Kollman graduated with a bachelor’s degree in business from Washington College on Maryland’s Eastern Shore in 1996.
In the early 1980s the original Robbinsville site was the home of Polaris Packaging Inc., which served the label-printing market from Philadelphia to New Jersey with one printing press. The 60,000-square-foot building had previously been a warehouse housing candied jimmies on one side and pool liners on the other. Like the Hightstown plant, Polaris was purchased by Engraph, which became Sonoco-Engraph in 1993, and then was acquired by CCL.
Between 2001 and 2003, the company transformed its plants from general printing to specialization. Today the Robbinsville site creates labels for personal care products, and the Hightstown plant focuses on security, RFID, and healthcare labels. “Since the change, we have experienced significant sales growth,” says Kollman, “and we have the equipment in place to support that new growth.”
The Hightstown plant provides a way to track medicines throughout the distribution chain. Sometimes this means a serial number that will track a medication back to the manufacturer, but the plant can also do more covert things to protect the security of a product: inks with multiple colors; microfibers printed into the product; or RFID tags, electronic chips embedded in the label that transmit a readable electronic signal. The product can then be tracked throughout the supply chain.
RFID technology, though, is just coming in and will take awhile to be standard. “Any time you make a change in packaging in the drug industry,” says Ulbrich, “you have to go through evaluations and set up the supply chain to deal with the changes.” If CCL were to do hidden printing, for example, the entire supply chain would have to be knowledgeable and have sensors in the field able to read it. Such changes can also add a lot to product costs at a time when the pharmaceutical industry is under a lot of pressure to reduce prices.
Yet despite the care that must go into instituting these changes, with careful step-by-step launches, says Ulbrich, “the potential is limitless, an intelligence that is growing and a technology that is moving.”
CCL Label is also a bottom up company, with a relatively small executive management structure. Ulbrich explains: “We’re a global company, going after it with small entrepreneurial plants, with specialties and regions they cover. We’re not a super label plant, like WalMart.” The two Mercer County plants have their own plant managers, and their own designers and salespeople, even though they are owned by the same company and are at only a quarter hour’s distance from each other.
And yet, the two plants have a connection — Ulbrich calls them “sister plants” because they sometimes work together as a family and provide mutual support. Plants with different specialties can, for example, negotiate as one company for raw materials. The relationships between the two plants, even though they have different specialties, can sometimes mean the sharing of customers, for example, if a customer for a decorative, personal care label also desires a high-security option for an expensive product, to protect it against counterfeiters. They can also exchange innovative ideas and solutions.
At the same time each plant is part of a network of plants with similar customers. For example, the pharmaceutical group includes plants in the United States, Mexico, Brazil, Europe, and Asia. A number of plants, explains Ulbrich, “will be running the same labels in different languages for customers in the group and the artwork is replicated throughout the world.” The plants are placed strategically, near their customers.
The relationship between CCL Label plants around the world also has a secondary advantage for its global customers, like L’Oreal. Because the same label can be produced in Thailand, Eastern Europe, or China, with the same equipment, the company can be secure that the labels that identify its products all have the same quality and design and its brand is protected. Furthermore, the companies can be comfortable that they are dealing with an ethical company, with controls in its process, and that their label will not be used to create a bootleg product behind the back of the manufacturer. If the product is a $30,000 kit for HIV, selling even 50 on the black market represents big money for a counterfeiter. Process control, says Ulbrich, can be just as important as covert inks in securing a product.
Pressure-sensitive labels were developed by Stan Avery in the 1940s; these are self-adhesive labels on a roll that can be applied to a container or tube, for example, a shampoo label. CCL Label does what is called “label converting,” meaning that it prints the labels and cuts them in the desired shape. “This is the foundation of our business,” says Ulbrich, “decorating in the form of a pressure sensitive label rather than direct printing on a product.” The idea is that, for example, a single type of tube might, he explains, cuts down on manufacturing space requirements.
CCL was founded as Connecticut Chemicals Limited in Toronto in 1951 and entered the pressure sensitive label business in the 1970s. Over the last decade CCL Label has acquired and integrated many label companies.
At the end of the 2005 fiscal year, the Toronto-based parent firm, CCL Industries, had $952.1 million in sales, net income of $140.5 million, and 4,600 employees. The company has a relatively loose management structure. Separate vice presidents of sales oversee different groups of plants, based both on specialty and location. The company’s executives are scattered. Martin, for example, lives in Boston, where he has a staff of four. In Toronto the headquarters occupy just one floor of an office building, counting only about 30 people. CCL Industries is carried on the Canadian stock exchange.
Ulbrich expects to see growth for CCL Label, primarily through products the company is constantly developing to give its customers “a unique edge in their marketplace.” A number of years ago, for example, when Bath and Body Works stores wanted a unique packaging edge to make its products look more attractive at Christmas, CCL added glitter to its labels.
Martin, who is responsible for all of CCL Industries’ operating units — label, aluminum container, and plastic tube — was dubbed a “genius” by Laverde for the transformation he has wrought. “What Geoff Martin has done is to organize us to be more responsive to a fluctuating market,” says Ulbrich. Prior to joining CCL, Martin was a senior group vice president with Avery Dennison.
Ulbrich, who handles acquisitions of property to expand operations, the building of new plants, and renovation of existing plants, has been in the label business for 28 years. He started his career working for Sun Chemical, doing research and product development for the inks used today.
When the company bought a facility in Clark and asked who wanted to move there and outfit the building, “I raised my hand because I lived near it,” says Ulbrich. Because he had taken courses in electrical and mechanical engineering, he found he had the knack for design and layout of the new facility. Next he became project manager for Cricket Converters in Hightstown and then process improvement manager for Sonoco for more than one plant. When CCL purchased Sonoco-Engraph in 1998, he was plant manager in Robbinsville and then became director of facilities and engineering.
His father had a paint store in Westfield. His older son is the IT support person for “Saturday Night Live,” and has helped out Ulbrich with corporate videos. His daughter teaches fifth grade, and his younger son attends high school.
Ulbrich says he has watched many businesses leave New Jersey, including Ford and General Motor, and he has a sense of why. “I know how tough it is to build in New Jersey,” he says, citing the cost of labor as one example. Companies, he continues, need to be able to go to their boards and make a strong case for a new location. As for the new plant in Robbinsville, CCL Label could cite proximity to customers: “We’re a strong link to the supply chain for pharmaceuticals and L’Oreal in Clark.”
Ulbrich is hopeful that other companies will follow CCL Label’s example. Medium-size companies are what will hold this country together,” he believes. “We can’t all work at strip malls.”
CCL Label-Robbinsville, 104 North Gold Drive, Robbinsville 08691; 609-586-1332; fax, 609-631-9137. www.ccllabel.com
CCL Label-Hightstown, 120 Stockton Street, Hightstown 08520; 609-443-3700; fax, 609-443-0617.