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Arvco: The ‘Swiss Army Knife’ of the Corrugated Industry

By AICC Staff

November 9, 2022

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George B. Arvanigian founded Arvco Container Corp. in Kalamazoo, Michigan, in 1967. But his journey was not a typical entrepreneur’s path into the corrugated box business. “My dad was kind of a unicorn in the industry,” says Greg Arvanigian, president and CEO. “He’s one of the few production guys that started his own business.”

‘He Wanted His Own Thing’

George’s career path in the production side of the business began in the early 1960s in Worcester, Massachusetts, with Dowd Box. From there, he was recruited by Inland Container to run its Philadelphia plant. He eventually caught the attention of International Paper (IP), which was rapidly expanding its corrugated box operations in the 1960s in the South and Midwest. He was offered the position of production manager at IP’s Howell, Michigan, plant, eventually joining one of his sheet customers, Grand Rapids Packaging, and its subsidiary Wolverine Packaging in Schoolcraft, Michigan, as vice president and general manager. Like many in the box industry at that time, the elder Arvanigian recognized the growing volume of available corrugated business signaled a great opportunity.

“He was at Wolverine [Packaging] about three years and got tight with a couple of sales guys and met a local banker,” Greg recalls. “He just wanted his own thing; he wanted to make corrugated boxes. That was in 1971.”

The company’s first location in Kalamazoo had two Langston letterpress printer slotters, a slitter, bandsaw, and taper. In 1975, after another move to its current location near downtown Kalamazoo, George acquired a used Hooper-Swift 78 corrugator. He also opened a sheet plant in Warsaw, Indiana, in 1974 and a sheet plant in Northwood, Ohio, near Toledo, in 1978. Following the bankruptcy of Grand Rapids Packaging in 1980, Arvco picked up a number of Grand Rapids Packaging’s salespeople, expanding its market reach north and leading to the opening of a sheet plant in Cadillac, Michigan, in 1982. The following year, Arvco moved its Northwood plant to Delta, Ohio, and added a corrugator, a move that Greg admits was not the best one for the company. “We didn’t invest enough in the plant to keep it economically viable,” he says.

In the meantime, though, Arvco was investing heavily in its Kalamazoo facility, adding a second corrugator—an 87—and new Hycorr (now Kolbus) rotary die cutters.

Then in 1989, George passed away. Greg, at age 28, became president of the company. Reflecting on the transition he had to lead at that time, Greg says, “as As happens with a lot of entrepreneurial guys that start businesses, the business grows and outgrows their ability to run it the way they want to run it.

Greg’s first task, as he described it, was to huddle with the company’s management team. “I called all the managers, and I say, ‘Guys, I’ve got a revelation for you: You’re managers; I expect you to manage. I can’t do it the way my dad did,’” he says.

Greg taking the reins of the business in 1989 began a period of refocusing Arvco’s mission. The company’s capital equipment was aging, and the customer base—which was at that point largely automotive and consumer appliances—was also shifting. Arvco’s plant in Warsaw, which was built, in part, to serve the Whirlpool parts business in LaPorte, was hobbled by extensive capital equipment needs Greg in his new position could not immediately justify. “The big thing we looked at was our business mix at the Warsaw plant,” he remembers. “We did a lot of folding and gluing down there. Our biggest customer was Whirlpool for their parts boxes, and most of the other business we were running in Kalamazoo anyway. And Warsaw, 73 miles away, is not that far. So, we made the difficult decision to close that plant and put all our money back into the mother ship.”

‘Invert the Bell Curve’

The consolidation of Arvco’s production assets and the reinvestment in capital equipment began in earnest in 1994 with the retirement of its older 78 and 87 corrugating capacity and the acquisition and installation of its 98 Agnati/Fosber corrugator. “I say, ‘We’re going all-in, and we’re going to put in a new corrugator,’” Greg says. “It was the best thing we could have ever done.”

Arvco’s corrugator capacity serves a broad waterfront, with flute profiles A, B, C, E, F, and K in single-face and single-, double-, and triple-wall board. As Greg explains it, Arvco’s business mix at the time was heavyweight-based, with triple-wall applications and heavier containerboard grades. But its broadening reach into the food and beverage business—Arvco manufactures 265 food packaging items and holds 10 food-related patents—required a machine with flexibility in emerging microflutes like E and F. “We were already in the food business, and so I needed a corrugator that could make triple-wall as well as lighter-weight microflutes,” he says. “The Europeans had a lot of experience with microflutes, so it’s one of the reasons I was steering toward Agnati.”

The company’s converting and finishing capabilities have mirrored the flexibility and diversity of the 98 corrugator. Arvco’s Kalamazoo plant maintains an impressive large-box and triple-wall capacity in its jumbo Flexoline 86 x 212, two-color flexo folder gluer, and its J&L 150 specialty folder gluer.

The company also maintains a stable of equipment suitable to the industrial box market, with its Langston Saturn III three-color mini flexo and its Post 84 specialty folder gluer. In between is a complement of workhorse machines: Ward and Hycorr (Kolbus) rotary die cutters as well as enhanced-graphics rotary die cutters in Arvco’s two Apstar 66 x 110 four-color and its Hycorr 66 x 85 four-color. In Cadillac, a similar machine footprint can be seen in its Langston 50 two-color flexo folder gluer, Ward 66 x 85 two-color die cutter, and Hycorr 66 x 85 three-color rotary die cutters. Rounding out the equipment mix are a Göpfert MAXI boxmaker, a Bahmüller stitcher, and a DPI three-color digital printer.

About Arvco’s broad business mix, Greg says, “We want to sell the stuff that nobody else wants to sell. If you were to look at our mix, take the bell curve of the corrugated industry where ultra-lightweight is on one end and super heavy triple-wall is on the other end. Invert that bell curve, and you have an Arvco.

“When it comes to doing something with a corrugated box,” he adds, “we do more stuff on-site than anybody else in the world. I don’t know anybody else that does what we do. And we’re constantly trying to move that along.”

Trying to move that along requires continual investment, and Kyle Baldwin, Arvco’s chief financial officer (CFO), attributes the company’s success at procuring the right equipment to Greg’s gut feel for what will work. Says Baldwin, “He definitely has more of that entrepreneurial spirit when it comes to capital expenditures and investments.”

“I make educated guesses,” counters Greg.

Greg’s “educated guesses” serve a unique but evolving mix of business. The company’s market has ebbed and flowed through an eclectic mix of government, automotive and industrial, and food and beverage. “We’re very diversified,” he says. “We actually do a fair number of government contract boxes like weather resistant, Class-2 triple-wall, etc. We’ve always done government work.”

Arvco is also a principal player in the pizza box business, a piece of the market brought to the company in the 1970s by Steve France, one of the company’s sales representatives at the time. Today, that business represents 45% of Arvco’s production. “Steve basically focused on selling pizza boxes,” Greg recalls. “He went out and bought cutting dies. We did a couple of marketing pieces, and we trademarked the name, ‘Pizza-tainer.’”

As Greg explains, Arvco’s focus on the food business balanced the highs and lows of industrial and automotive sectors. “The food business—it’s a hedge,” he says. “When the economy changes, the food business gets good when the industrial business doesn’t. People realize they can feed a family of four for $20 when they order a pizza. Where else can you do that? So, that helps us get through a lot of these downturns.”

Arvco’s specialization in pizza has expanded into other styles of convenience packaging for other kinds of fast-food outlets selling chicken and sandwiches. Giving one specific example, Greg described the on-site packaging space savings they achieved for Subway by transitioning from E flute to F, allowing twice as many packaging units to be held in-store.

People, Family

Like many an independent, Arvco has a family feel to any visitor touring the plant. The company employs around 220 people full time. Citing longtime employees who have been with the company 20, 30, or 40-plus years, Greg says, “We treat people like people. It’s a culture thing. We treat people with respect; we treat people well.”

Arvco has had its share of difficulty finding good employees, just as others in the industry. But the company also takes pride in not laying off employees for economic reasons. “I have never economically laid anyone off in the 30 years I’ve been here,” Greg says. “My job is to make sure they’ve got something to do, so we don’t believe in layoffs. It’s one of the advantages we have.”

To attract and keep the valuable employees it has, Greg is studying a pilot project to pay for an associate degree at a local community college. “I was talking to one of my customer service reps the other day, and she has a son who just graduated from high school,” he says. “He can’t afford to go to college, so he’s going to get a job for a while and try to save money for college. I thought, ‘There must be a lot of kids in that boat. What if we offer to pay for an associate degree at community college if they come to work here?’”

Greg sees this as an answer to the aging of his workforce and the need to attract younger, more motivated workers. Says Greg, “I think the talent level will get better because you’re going to be attracting people who are aspiring to go to college and better themselves.”

Team for the Future

If the workers at Arvco feel like family, imagine how family at Arvco feels like family. As the second generation of Arvco ownership, Greg has followed his father’s model of bringing in his sons to the business.

Nicholas Arvanigian, Greg’s younger son, is a sales representative for the company. Alex Arvanigian is vice president of operations, a position he has held since 2018. Says Greg, “When Alex was a kid, he played competitive hockey at a pretty high level, and I used to tell everyone, ‘Alex is the guy you want on the ice at the end of a 1–0 game.’ He’s cool under pressure; he doesn’t get fazed. That’s a really good trait to have in our business.”

Alex’s view of the business is on the production floor and the converters face there each day. “I oversee production between here and Cadillac, shipping, maintenance, all of it,” he says. “The biggest challenge now is finding ways to get more out with fewer people—finding ways to automate simple processes.”

Asked if he had any advice for younger managers, Alex simply says, “Expose yourself in different areas of the business, because it all works together. Corrugated is kind of a life sentence. It’s a really good business to be in.”

Baldwin, from his position as CFO, considers his most important job to be the company’s relationship with its bankers. Though not a family member, he spent 10 years in commercial banking, serving as Arvco’s banker for five of those before Greg lured him away in the fall of 2008, just before the financial crisis. “I started, and a week or two later, Lehman Brothers files for bankruptcy,” he says. “That’s really when shockwaves got sent through the monetary system. It was a trial by fire.”

Baldwin, through his banking experience, has positioned Arvco for future investment and expansion. “Traditionally, a lot of CFOs come through the CPA path; I came through commercial banking,” he says. “Today, it’s all about how we can maximize borrowing capabilities to fund some of these projects for improvements and capital investment.”

Rounding out the management team is Bob Ford, vice president of sales. Ford’s been a member of the Arvco team for 17 years.

Arvco is a truly independent corrugator—one with no mill ownership or sheet feeder affiliation. Of course, it’s a subject about which Greg has much to say. “It’s tough to be an independent corrugator, which is why we do the stuff we do,” he says, explaining that the advent of sheet feeders over the years has benefited the sheet plant sector greatly.

In fact, Greg says, Arvco itself has taken advantage of the shift in economics: “My dad used to say, ‘If I can’t put it on my corrugator and make money, I’m not going to take the business.’ I say, ‘If I can’t put it on my corrugator and make money, can I buy sheets and make money, or buy finished boxes and make money?’”

Arvco’s long history as an independent in the industry of course includes its years of involvement in the industry’s associations, particularly AICC. George was a founding member in 1974; he served as the Association’s president in 1979–1980 and was named to its Hall of Fame in 1985. Greg, for his part, served as Chair of the Association in 2001–2002, the first son of a past president to do so. Greg was named to the Association’s Hall of Fame in 2008, and he serves on TAPPI’s Corrugated Packaging Council and now on the board of directors of the Fibre Box Association. Alex has begun involvement in AICC’s Emerging Leader program and TAPPI’s Young Professionals.

Greg calls Arvco, for the breadth of its product lines, the flexibility of its service, and the state of its technology, the “Swiss Army knife of the corrugated box business.” Always forward-looking, always, in his words, “not following the rules,” he continues to build an innovative and cutting-edge company in a changing and competitive business.


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Steve Young is AICC’s ambassador-at-large. He can be reached at 202-297-0583 or syoung@aiccbox.org.

 

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