Canadian Plastics

PET Projects

Wine snobs may offer a contemptuous sniff at the mere thought of synthetic corks and plastic spigots, but that's done little to discourage a Calgary manufacturer that wants to introduce North American...

March 1, 2005   By John G. Smith



Wine snobs may offer a contemptuous sniff at the mere thought of synthetic corks and plastic spigots, but that’s done little to discourage a Calgary manufacturer that wants to introduce North American vintners to another use for plastic — PET bottles for storing wine.

Westbridge PET Containers has leveraged advancements in oxygen scavengers to create a PET wine bottle that lets in less than 10 parts per million of the wine-damaging gas in a year. In comparison, the headspace of a bottle contains 500 ppm of oxygen when it’s first filled and capped.

“For any products that are oxygen sensitive, you can now enhance the barrier properties of PET without going to multilayer,” Westbridge owner and CEO Dave Birkby says of the improving materials.

The idea isn’t that far-fetched. Only 20 years ago, most pops were sold in glass containers, and some European wineries are already offering selected products in PET bottles. Uccoar now offers a three-litre magnum of merlot instead of a bag in a box; France’s Chantovent offers product in a plastic bottle as well.

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It’s hardly Dom Perignon, but you get the idea.

“It’s not going to take over the wine market. This is a niche thing. A fine wine that you rack is not realistically going to be bottled this way,” Birkby says. But there are potential applications involving table wines, and possible buyers including airlines that may be swayed from glass bottles. In a bid to promote the idea, he sent one airline a picture of a glass bottle and its PET counterpart, with a caption that asked which of the two could be used as a weapon by a would-be terrorist.

It’s only one of a number of inventive approaches being taken by the operation that has found growing success despite the fact that it has only one local customer.

“Alberta isn’t exactly a hotbed of packaging,” says Birkby, who bought the company for which he worked a decade ago, after a less-profitable Toronto division defaulted on a bank loan. “Most of our opportunities are in the U.S.”

Since the purchase, he’s doubled the volume of machinery. Half of the 80,000-square-foot facility is filled with both injection and blow molding machines, leaving the remainder for warehousing needs. Nine injection molding machines are producing 36 preforms in a number of sizes and thread finishes. And products range from stock molds for carbonated beverages, using petaloid footed bases, to stock food molds including a family of oblong edible oil molds. Then there are household chemical stock molds for detergent, sprayers, cleaners and hand soaps.

The customer base has grown as well. While Starbucks once ordered a truckload of 50,000 jugs for flavored syrup every six weeks, it now needs that many every day. Westbridge containers now house everything from water to Black Velvet Canadian whisky. And 40% of the business involves selling preforms to customers as far afield as Ontario, Hawaii and Antigua.

PREFORM BUSINESS PICKING UP

Credit some of the success to quick turnaround. The company now machines low-cost customized molds (US$9,000 to $11,000) in six to seven weeks, thanks to the use of four in-house engineers and CNC technology.

It’s also working with suppliers to develop new colorants and additives, which include oxygen scavengers, barrier additives, and additives to enhance ultraviolet properties. A combination of the oxygen absorber and an amorphous nylon may soon be used to create containers that can better retain carbon dioxide. (“The prelims look interesting,” he says.)

Company molds are also being used in a growing number of niche markets. A blow molder in the Yukon, for example, needs bottles shaped like a train that’s popular among the region’s tourists. “It’s water, and they sell the damn stuff for two bucks a throw,” Birkby says.

It’s good business. As important as the boutique water market is, however, the company is trying to find other opportunities.

“Empty plastic bottles don’t travel that far — maybe 1,500 miles [2,400 km],” he says. And Westbridge machines are limited by their annual output of 200 million bottles a year.

He expects some of the future business to emerge by helping end users install their own stretch blow molding machines, and training their operators in exchange for five-year contracts to supply the preforms. A customer in L.A. has already embraced the idea, and another sale is expected in Seattle.

The concept comes from his experience at Graham Packaging, which became a leader in the oil bottling industry. And part of his confidence in the potential success comes courtesy of the dropping cost of stretch blow molding equipment.

He also suggests that consolidation in the glass industry is driving the business. “They [suppliers of glass bottles] are saying, ‘You know how we used to do this color? We don’t do that anymore’ and ‘You know how we used to have this in inventory? We don’t do that anymore.'”

Granted, glass producers may be more accommodating when dealing with breweries, but Birkby says smaller glass consumers aren’t likely to be afforded the same flexibility.

Various statistics suggest he’s on the right side of that market. Mastio and Company, a Missouri-based consultancy, estimates the market for blow molded food and beverage containers will grow more than 6% a year for the next three years. The market for PET alone is expected to grow by double digits, while the Society of the Plastics Industry suggests the volume of blow-molding equipment could increase 19.4%.

Westbridge’s payroll tends to fluctuate between 60 to 70 employees based on seasonal demands, but there hasn’t been much of a fluctuation in recent months, as the operation runs around the clock. (“We need to take the bell curve out of the business,” he says.) And the group offers him an extensive pool of experience on which to draw. Current staff members come from a wide array of leading bottlers. He worked for Shell. Others have worked for the likes of Coke and Pepsi.

“The thing I love about this is you’ve got people from corporate backgrounds that understand job descriptions, performance reviews.” Coupled with the speed of an entrepreneurial environment, the model is difficult to beat, he says.

There’s no union, either. Management actually took a program that encouraged ideals such as competitive wages, employee dignity and profit sharing. In return, employees have worked at the site for an average of eight years.

Retention is particularly important given the Alberta job market. “We have to recruit people from B.C. and Ontario,” Birkby says. And the geographic isolation forces a certain level of self-sufficiency.

“We’ve never had a Husky or Cincinnati rep in here to fix a machine,” he says. The call for a technician might cost about $5,000 to fix a problem, but the real expense is associated with a machine that can be idle for as long as two days, compared with Ontario plants that can access service in a couple of hours thanks to their closer proximity to the equipment suppliers.

Birkby is also looking to Asia as a land of potential opportunities, even though many of his peers see the region as a threat. “I’m looking at some Asian machines,” he admits. “They’re one tenth the price. So much less that you can’t ignore it.” Specifically, he’s working with an assembler in Singapore that will allow him to specify individual North American components.

Nor is it realistic to overlook the fact that he can ship an ISO container of goods to China for $1,200, compared to the $1,000 cost to send the same container to Vancouver, he says.

“For us, there’s still a big question about, is it a threat or is it an opportunity? But they’re going to be consumers. It’s going to be a market.”

And Westbridge is always looking for new opportunities — you can make a toast to that.


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