Kite Packaging’s philosophy of devising added-value solutions has allowed the company to establish itself as a trustworthy partner to the UK manufacturing industry
Likening Kite Packaging to a classic ‘kitchen table start-up’, Gavin Ashe, Managing Partner at the packaging supplier, has been around for all of the 18 years of the business’ existence, overseeing its expansion into the second largest industrial packaging distributor in the UK.
“We started at zero and we now operate eight sites across the country. Looking at our figures, we double every five years. In 2017, we turned £65 million over and while the 2018 data has not been published yet, I can say that we will have considerably bettered that achievement,” Gavin uses key numbers to illustrate Kite Packaging’s spectacular rise
Reflecting on the reasons that have steered the company to its current position, he singles out its holistic approach to total cost of packaging and its ability to provide tailored solutions, rather than merely isolated products. “We work heavily on Value Analysis/Value Engineering (VAVE), so that we can come up with a proposition for a piece of packaging that saves our customers more money than what they would normally pay if they were to buy it, use it, and then dispose of it at the end of its life,” he explains.
“There is no doubt that over time we have evolved into a truly added value distributor, but one thing that has not changed is our mission to look after UK manufacturing businesses and their needs. We supply both individual clients and big companies and, historically, our largest customers have always been manufacturers in their own right.”
When setting up the company, Kite Packaging’s founders were also mindful of the importance of stimulating their future staff to commit themselves to the greater good of the business. As a result, an employee-ownership model was established, based around the concept of mutual interest, where anyone working for the company – from forklift operators to senior managers – can buy and sell shares.
Gavin unravels the motives behind the decision: “Many of us had come out of large Plc organisations where the individual was more concerned with their own prospects than those of the company. At Kite Packaging, we wanted to encourage our people to cheer on their colleagues and want them to be successful, because if your peers are doing well, your own shares are worth more.
“We have made a considerable number of people significantly better off than they ever imagined they would be, but the truth is that they have contributed immensely to building a very successful business. It is fundamental for us to hold on to this model, because it has urged us to adopt a completely different philosophical approach when it comes to spending shareholders’ money.”
Over time, Kite Packaging has crafted an extensive portfolio of different packaging types. Be it simple cardboard boxes, pallet wrap and stretch films, bubble wraps, polythene and paper bags, or anything else you can think of, the company has a solution. Unlike many of its competitors, however, Kite Packaging aims to stay ‘product-neutral’, meaning that it does not foist any particular kind of packaging upon its clients.
“The process we follow involves us looking at the item that needs to be packed and advising our customers on what options they have and what the benefits of each packaging type are,” Gavin discusses. “Speaking of emerging requirements, however, the desire to be more environmentally-efficient is becoming a big driver. Unfortunately, this cannot yet come at the expense of cost, which remains the overriding factor in selecting packaging. Nevertheless, we are eager to show our clients how they can get an environmentally-friendly solution for a reasonable price where possible.”
Offering bespoke services has turned into a kind of speciality for Kite Packaging, as the company focuses on bringing unique propositions to the table when working with its top-end customers on their complicated issues. “To give you an example, nowadays, there is a noticeable growth in the use of lithium-ion batteries in the automotive and aerospace sectors. Drawing upon our experience of collaborating with Formula One and Formula E teams, we are now being recognised as a leading manufacturer of packaging systems for lithium-ion batteries,” Gavin maintains.
“One of the biggest challenges in this sector originates from the fact that a lithium-ion battery is a hazardous product to ship,” he continues. “Therefore, the packaging has to protect not just the item, but also the surrounding environment, lest something goes wrong during transportation. We have obtained a very sophisticated certification and developed exhaustive testing processes to subject the batteries to the most extreme conditions they might experience in real life, including drop testing. Admittedly, it is not a well-trodden path, as we’re probably the first company ever to ship a large format lithium-ion battery on an aeroplane, but this project highlights perfectly our willingness to go the extra mile for our clients.”
Being able to keep your finger on the pulse and innovate constantly appears almost to be a prerequisite for success in the packaging industry. The sector’s dynamism requires companies to be on the alert at all times and makes it incredibly hard to predict ‘the next big thing’. “If something is guaranteed, it is that what people are using today is not what they will be looking for in five years’ time,” Gavin opines. “We have an NPD team of four whose job is to monitor what is coming next and keep track of all the technological changes within the industry. For example, they are currently looking at alternatives to polystyrene, the next generation of films, as well as the next generation of paper void fill machines, but, really, the list of opportunities is endless and I would be a very rich man if I could tell you which one was going to become the standard for the future,” he remarks humorously.
Whilst admitting that certain risks have pestered UK manufacturing in the wake of the Brexit vote and the ensuing insecurity over future UK-EU relations, Gavin is nonetheless pleased with the strong balance sheet Kite Packaging has kept. He also makes an allusion to a Warren Buffet quote, repeating the magnate’s words that only when the tide goes out do you discover who has been swimming naked. “I think the tide is going out at the moment and I can foresee some of our competitors struggling in these circumstances. Fortunately, our good balance sheet and dedicated team will help us navigate these tough times.
“In fact, I am quite positive about how 2019 will unfold. If I were to make a prediction for the long-term, it would be right to say that I am cautiously optimistic. The marketplace is more than big enough and although we are quite a big player now, there is still plenty of room for growth. Like I mentioned earlier, we double the size of the business every five years, and I cannot see why we should not be able to do that again within the next half a decade,” Gavin wraps up.
Services: Industrial packaging