Grimsby-based Ultimate Packaging’s Ulti-fresh films use advanced laser technology to control permeability across a range of vertical form-fill, horizontal flow-wrap and lidding film products, to suit the needs of salads, vegetables and fruit.
The family-owned company has grown from its roots in the bedroom office of Nigel Tonge to an estimated turnover of £29 million in the current financial year. It is led by three Tonge brothers, managing director Nigel, sales and marketing director Chris, and commercial director Michael, with the board completed by financial director Jeremy Hodson and production director John Fisher.
The family’s roots in horticulture in fact stem from the brothers’ father Howard, who set up the first horticulture division for Linpac in the 1970s. He was also involved in the initial development of Ultimate.
From its establishment in 1982, the firm had happily operated as a packaging trader, albeit moving on and into larger premises than a bedroom, until 1998, when it “decided” to acquire a bag-converting operation. A year later, it took on a print factory and, with four premises on the go, the board decided the time was right to move printing, conversion, warehousing and offices under one roof.
The transfer into a new 40,000sqft facility in Europarc, on the outskirts of the north Lincolnshire town, has proven the catalyst for rapid expansion. When the relocation took place, in June 2000, the firm’s annual turnover was around £9m and it employed 90 staff. Ultimate now employs 215 people in a 60,000sqft facility that runs 24 hours a day, 364 days of the year - mirroring the food retail industry it services. Within the next 12 months, work will begin on the next extension phase, which will increase the size of the site to 100,000sqft.
“We took the step into manufacturing a little reluctantly,” says Nigel Tonge. “We had a thriving business letting other people produce for us and we were not certain we wanted to make our own product. But the way legislation was going it was becoming clear we would have to own our premises, and both the print and bag-making companies we bought were making 80 per cent of their products for us anyway.”
Being relatively new to property ownership has its distinct advantages, he says. “Uniquely, we were able to build a state-of-the-art factory - whereas a lot of our competition was working out of ageing buildings with old equipment and would have to spend a lot of money just getting that up to scratch. We designed in hygiene and environmental standards way beyond what most other firms were capable of, and believe we have the most environment-friendly building in our sector in the UK.”
The family was one of the first to use the word Ultimate in its company name, claims Chris Tonge, proudly saying that they even beat BMW to the punch. It was his decision to install a tiger as the company motif, as a powerful symbol of the company’s strength and dynamism.
The board has also backed its judgement with significant financial outlay. “We have invested about £15m in the last five years in the infrastructure and the best equipment money can buy,” says Chris. “With the existing capacity, we could squeeze turnover up to maybe £32m, but further expansion will open up our options. I believe we can reach £40-50m in the near future, which would make us the largest independent in Europe.”
“Until we moved into Grimsby, there were really only two major companies providing flexible packaging to the fresh produce industry - and I think the time was right for the control of the market to change,” says Nigel. “I wouldn’t say, however, that becoming so large in the fresh produce industry was a deliberate approach - but I think we played a large part in reactivating the industry that was split between the two suppliers. The competition has brought the price down to a reasonable level, it has driven quality standards higher and, perhaps most importantly in the fast-paced fresh produce sector, it has significantly reduced reaction times.”
The company is set up very much like a fresh produce business, which reflects the fact that 60 per cent of its business is carried out in the veg, salad and fruit arena. Fresh produce, principally wholehead and prepared vegetables and salads, has also accounted for the major proportion of growth in the last few years.
Walk around the conversion hall, and you will see film being converted on machines side-by-side for Tesco cauliflower, Asda potatoes, Sainsbury’s fruit and Morrisons salads, and many more besides. There is no major retailer that does not feature film that has passed through Grimsby on its shelves at some point in the year.
And, perhaps not surprisingly, the customer portfolio reads like a who’s who of the UK vegetable and salad industry - Bakkavör, Fenmarc, Taypack, Natures Way, Langmead, Soleco, G’s, MBMG, QV Foods… the list goes on. The fruit sector is a customer too, mainly for bags and tray liners, but it will become a bigger area for lidding film too, says Chris. “There is a lot of potential for printed lidding film for punnets, as people try to dispense with paper labels. It is already being done to a degree, as the industry reacts to recycling issues.”
In recent years, Ultimate has put together a range of biodegradable and compostable film marketed under the Ulti-Green brand. Although these products are readily available, cost is currently a major inhibitor, but as volumes increase such products will become commercially viable.
The flexographic process, in simple terms, involves mounting a thin polymer plate onto a sleeve, which is then printed onto a flexible material. But it is anything but a simple process, and the operational costs are high. Over the last five years, Ultimate has installed four new print presses, three supplied by Fischer & Krecke and one by Windmoller & Holscher, all selected for speed, reliability and, above all, quality. Alongside a fully integrated management information system, the presses have already significantly increased output to more than 20m metres of printed film each month.
“The investment has enabled us to provide our existing and new customer base with increased efficiency and consistently high-quality packaging,” says Chris, adding that the commitment extends across its facilities and equipment. “We also have a laminator, 12 bag-making machines and eight slitters (soon to be 10).
“We are prepared to put more capacity in to keep ahead of the pack. We are competing against a couple of bigger companies in Amcor and Bpi, but our recent investment sets us apart.”
The investment is not made without a definitive purpose, and no time is wasted sucking as much value as possible out of every expensive piece of kit. “Each new press we put in has the capacity to increase turnover by £6-7m a year,” says Nigel.
“We operate German print machines, and I believe they produce the best presses in the world by a long, long way. All of the machines are eight-colour and not one of them is more than five years old. I don’t think any other company in the UK could make that statement.” It is the added-value element of the job that Ultimate believes sets it apart, though.
One element of the business that adds value and does not turn around rapidly is its workforce. “We have a very good rate of staff retention - many people have been with us for a long time, and our belief and commitment runs right through the company,” says Chris. Nigel agrees, saying: “We have higher productivity levels than our competitors, we pay more and we retain our staff for longer. I would quite happily give everyone a pay rise every three months if we were making more money.”
Ultimate’s technical team has been together for four years and is constantly striving to design film products to extend shelf life of the produce they contain. “We understand that extending shelf life is a key element in packaging, and our team of technical experts, along with further new laser and slitting machinery, will keep us ahead,” says Chris. “Our customers will come to us with the product and give us the spec - then it is up to us to use the technology at our disposal to maximise the shelf life. Without a very good technical team, anybody would struggle in this industry.”
Struggle is not a word Ultimate has used too often in recent years, however. “We are profitable, but we make no secret of the fact that we would like to make one or two per cent more through increased efficiency,” says Nigel. “We have always succeeded by being very responsive to market moves, and have probably got as much business by taking the opportunities that arise when someone else lets their customer down as anything. But we are always aware that the key is providing the right product at the right price.
“The reason we have been so successful is firstly that we have been prepared to invest, but also that we are very customer-led and responsive. We supply several volatile food sectors, and fresh produce is undoubtedly one of the more demanding to supply, but the board is involved on a day-to-day basis and if we need to make a decision, it gets made straight away. We operate to very short and reliable lead times, which is exactly what the fresh produce industry requires. Most of our customers receive orders today that need delivering tomorrow - we have to be able to respond to that.”
The business, he adds, is built on extremely solid foundations - a crucial factor in today’s environment. “We will eventually own the land, the building and all the machinery, which means we are in control of our own destiny at all times. When we moved into these premises, we definitely saw it more as a shop window, and expected to still deal with product manufactured elsewhere. But things moved on very quickly, and we only sell products manufactured in-house now.”
“We are only a short way down the road to where we want to be - the growth potential with many of our existing customers is significant, particularly in the prepared and ready-to-eat sectors,” says Chris. “It is our intention to carry on our investment and to increase our print capacity still further to remain at the forefront of our highly competitive marketplace.”
AWARD-WINNING POLICY
Ultimate is also leading the way in the fight to protect the environment. As the debate hots up, with food packaging firmly under the microscope, the company is working towards achieving IS0 14001 environmental status by 2008.
One fact overlooked by many is that plastic films account for less than two per cent of total oil usage and there are many disadvantages to the current biodegradable films being used, and they are expensive.
“Much of our focus over the last 12 months has been on film reduction, and we have achieved many significant savings,” says Chris Tonge.
“We are confident that we will be able to give our customers a carbon footprint of every product that we supply by the middle of 2008, as it has been built into our new costing system.”
Ultimate recently picked up an International Safety Award for its work in this area, and the company has many projects in place to reduce its own carbon footprint.
The latest reduction in energy consumption was the installation of metering on both compressors and print machines, which will allow the company to ensure that each job is produced on the correct machine to minimise energy usage. “We actively encourage our customers to visit our factory to demonstrate the work we have done in this area and to explain our plans for the future,” says Nigel Tonge.
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