H.B. Fuller will open a $1 million facility in Vadnais Heights in an effort to grow its packaging business.
Gloved and goggled, H.B. Fuller Co. adhesives engineer Luke Maistrovich recently fed a carton into a whizzing machine. The carton bolted from the contraption with three precise beads of glue — each dispensed in 1/100th of a second — to hold the package together.
Maistrovich was demonstrating the exacting work of the equipment inside H.B. Fuller’s new $1 million Packaging Center of Excellence, which officially opens next month at the company’s Vadnais Heights headquarters. The center will serve as an innovation and problem-solving hub for customers, showing them how to ramp up packaging speeds, create lighter, stronger or resealable glues, as well as create safer packages that can easily be opened without a blade.
“Packaging is a growth market,” said Peter Petrulo, H.B. Fuller’s director of North American packaging. “We see it as a phenomenal market for us to expand in North America.”
If successful, the new packaging center should generate $500,000 a year in new glue and service sales by figuring out how to slash customer product weights, transportation costs and factory waste. The center won’t do any of the packaging production for its customers, but the company said its solutions and ideas will ultimately save clients money.
“Rather than just create a formula and hope it works, when a customer comes in, we can simulate their needs and problems here,” Petrulo said.
H.B. Fuller makes the glues that seal billions of boxes and hold together books, magazines, diapers, sanitary products, potato chip bags, even the electronics in some circuit boards. Its adhesives have been used by Scott paper towels, Summit Brewing and Procter & Gamble.
The company invested in six different industrial packaging machines to help with customer needs. One of the new machines under Luke Maistrovich’s watchful eye can glue labels on 600 bottles each minute. Another can form and glue shipping boxes in the blink of an eye. A third, donated by Minneapolis-based Graco Inc., slashes factory downtime by preventing clogs.
The center also will test and stress customers’ product packaging. The goal is to help customers create sturdy, retail-ready packages and labels that don’t wrinkle or crush — even if accidentally left in the rain, freezer or near a heat source.
“The center will indeed help us retain valuable customers as well as gain new business,” said spokeswoman Kimberlee Sinclair. “We’ve already brought in a few key customers to help them solve current adhesives problems [and] develop new solutions and products. The response has been overwhelmingly positive.”
The new center already is being seen by some on Wall Street as a smart way for H.B. Fuller to grow, especially since it recently reached $2 billion in sales for the first time.
Mike Ritzenthaler, a Piper Jaffray & Co. senior research analyst, said that while the company’s hygiene-product adhesives are well ahead of company targets, packaging is not. Ritzenthaler estimates that packaging contributes roughly 25 percent to total revenue, but may only grow 5 percent a year.
“In order to hit their organic growth target, they have to achieve something like 10 percent growth from each of their businesses: hygiene, assembly, construction and packaging [adhesives],” Ritzenthaler said.
The new packaging center might lead to new formulas, convince manufacturers to switch to their adhesives and push up H.B. Fuller’s stock price, Ritzenthaler said. “It helps if the [prospective] customer can actually come and run cost-benefit analysis inside Fuller and get a feel for the new equipment and new formulas. ”
Fuller’s new test hub follows the customer-centric “centers of excellence” it opened in China, Germany and Vadnais Heights. While those labs focus on improving glues embedded in hygiene, auto or circuit board products, the new facility is dedicated to packaging.
The new lab “will provide value to their customers,” said Nicholas Long, global marketing head of Graco’s applied fluid technologies unit. “I know they have already taken a couple of customers through the new lab to talk about new equipment options and new adhesives.”
More than a year ago, H.B. Fuller teamed up with Graco to solve a problem for a customer — Summit Brewing.
Using smelly “glue pots” that melted glue in open bins, workers at Summit Brewing wrestled with a dreaded trifecta — the stink of charred glue, dripped-on machines and stuck packaging equipment that often shut down production lines for 15 minutes. Graco’s new system melted H.B. Fuller’s glue pellets in just five minutes and neatly applied them to cartons with no mess.