AEROSOL EUROPE: At the beginning of August you announced that the private equity company ONCAP has acquired Precision. What does this change in ownership mean to Precision and to your business?
Mario Barbero: Our new shareholder ONCAP, is the dedicated vehicle for mid-market investing of ONEX, the largest private equity company in Canada and one of the largest and oldest in North America. ONCAP has chosen Precision as a new stand-alone platform investment that they want to support in the next phase of its growth – both organically and through additional acquisitions in partnership with the current management team and employees. When I met the ONCAP management they were aligned with our strategy and agreed with what we have done over the past 3 years under Peak Rock’s ownership. In times of growth we are now going to be more dynamic and really looking for new opportunities. ONCAP is primarily looking for companies on such growth paths for their portfolio, therefore they are an ideal partner for us. Based on their significant experience in the packaging and plastics/injection molding industry from their past and current portfolio companies (e.g. Husky, Krauss Maffei, Davis Standard, IntraPak) ONCAP will give us the necessary support to continuously expand our business.
AEROSOL EUROPE: Mr. Barbero, as the CEO of Precision Valve, you manage a company that is a leader in the international aerosol industry, especially when it comes to the manufacture of aerosol valves and actuators. With which goals did you join the company in 2016?
Mario Barbero: I was in the aluminium tubes and cans industry for more than 10 years before I joined Precision. So, coming from the packaging industry I, of course, knew that Precision, as the inventor of the aerosol valve, is recognized as a market leader in the valve business; it produces 4 billion valves per year. What I have discovered then is the fact that Precision is also a leader in the actuator business, producing more than 2 billion actuators per year. There is a strong setup, with great expertise, experience and know-how, thanks to the highly talented and skilled people with the company. Precision has an unrivalled global network of production sites and customer service locations and high-volume manufacturing capabilities, not to mention the largest library of aerosol valves!
So, when I started, my goals were – quite logically – focused on expanding these strengths and eliminating hurdles that limited our business at the time. As an example, we have aligned the global organization in order to meet the changed international market requirements after 10 years and put the right people into the right positions in order to fully leverage their skills and enable the organization to accelerate processes, e.g. in new product developments. Where necessary we hired new talent which brings us new technical and managerial skills. With regard to the global footprint we established regional organizations with regional management, and at the headquarters level, we realigned the organization in order to support the regions and to be sure that all the local Business Units are moving in the same direction.
AEROSOL EUROPE: How did the organizational structure of Precision change in specific after you joined the company?
Mario Barbero: We have created a regional structure with 4 regional managers responsible for North America, Latin America, Europe and Asia Pacific. This is being coordinated at the group level and allows us to better coordinate our local/regional activities but at the same time encourage stronger cooperation in and between the regions.
We also changed things at the group level. For example, we created a central marketing function for the entire group and we established support units for the regions in the financial and technical departments. We moved the headquarters from Rye Brook, NY, to Greenville, SC – in order to bring departments together, shorten paths, enhance communications, and encourage people to work together. This also enhances career opportunities between headquarter departments.
AEROSOL EUROPE: What capacity do you plan to install in the near future?
Mario Barbero: We have invested significantly over the past 3 years in both creating capacity for existing products, especially in actuators – with which we have great success on the market – and, of course, in terms of new products. We have invested in new portfolio actuators, “Colt” & “Tornado”. The new product lines are being launched to the global markets just now. Three months ago we started a fully integrated production line for a high-volume actuator business for a customer in Europe and Asia and furthermore we have significantly increased our BOV capacity in Europe and North America and installed a new assembly line for metered valves in Thailand.
AEROSOL EUROPE: Innovation is an important element for product development. What suitable actions do you take to promote innovation in your company?
Mario Barbero: In fact, innovations are an important driver for success and they have always been at the core of Precision’s DNA. As mentioned before, the great expertise, experience and know-how of our highly-talented and skilled team is a great source of product and process innovations. Continuous improvement is part of our company mission and programs are in place for motivation, screening and selection of ideas so we can further develop them as part of our innovation pipeline. We also get a lot of impulses from our customers who approach our teams with new formulations or other challenges to develop a specific dispensing solution. A lot of external innovators – knowing about Precision’s great expertise – contact us to jointly bring an idea to life.
In some cases, innovation is just the evolution of existing products. For me, innovation can on the one hand result into new products; but on the other hand process innovations like new developments in the supply chain or in the way we work with our customers are similarly important.
AEROSOL EUROPE: Customer service is one of the most important parts of the cooperation between supplier and customer. How do you manage this very important service?
Mario Barbero: Precision’s worldwide customer service is an important asset and key strength of our company. We are globally present in more than 15 countries. In each country we have our customer service teams, who speak the language, understand the problems and the local culture. This is a must in our strategy. We will maintain and reinforce the contact and our local presence of our customer service teams and further enhance the co-operation with the support we provide on a technical side through our own laboratories. Having our own laboratories in all the countries where we are present is a significant success driver for many customer projects. And this is quite unique in our industry.
AEROSOL EUROPE: Which markets do you regard as markets with growth potential in the medium term?
Mario Barbero: Certainly we see that the global market is solid and growing. The difference is, of course, the growth rate. Some regions are growing more than others. There are also some segments that are growing more than others. For example, in the personal care category in Asia and North America we see growth rates that are significantly higher than in the other regions. There are more and more new formulas requiring new dispensing solutions that are under test in our laboratories. We are seeing in the markets for hair care and food more and more customers who are seeking specialized dispensing solutions for their new formulations.
From a regional point of view also Latin America, especially Brazil, offers a great potential for growth. Brazil is a very large market, where we are reinforcing and extending our capacities in injection molding. This is one of the priorities of our strategy.
AEROSOL EUROPE: How do you assess Asia, especially China?
Mario Barbero: We have facilities in Australia, in Japan, in Thailand and, of course, in China. We experienced nice growth in the AsPac region and we are very successful with our plant in Thailand. China in specific is an interesting, but also a quite complex market. Furthermore there is the challenge of aligning international quality standards, local quality requirements and local price levels. Precision is present there and we are growing there. In our strategy plan, the growth in Asia is one of the key pillars, but we are not only focusing on China.
AEROSOL EUROPE: Where do you see aerosols in general in the near future?
Mario Barbero: The aerosol product is an attractive and highly convenient packaging solution for dispensing products across categories with an unrivalled spray quality. If you look at the price/performance ratio you can consider aerosols even to be a relatively cheap kind of packaging. We see positive growth rates on all international markets and our future projections confirm these positive trends. Apart from the above-mentioned product innovations driving the growth of the markets, a lot of further growth opportunities will arise from improvements in supply chain management. Being able to meet our customer requirements with sufficient capacity and flexibility/reactivity will be a key driver here.
The aerosol will be further developed (and Precision will be one driver of these developments) but looking at the diversity of applications and the number of ideas about how to improve the performance and efficiencies along the value chain, I see aerosols further expanding their position as a modern packaging and dispensing solution.
AEROSOL EUROPE: Mr. Barbero, we thank you for this conversation.