‘This Industry Humbles You’
Paul Centenari, ceo, Atlas Container, has learned the value of humbleness. The box making in- dustry will do that to a person. After graduating
from Dartmouth College, working for Procter & Gamble,
and getting a business degree from Harvard, he went
to work at a boutique investment bank in Denver. Ten
months later he was fired “for being arrogant,” he says.
“The day after I was fired I called my brother
[Peter] and told him, ‘I have good news and bad
news,’” he states. “‘First, I was fired. Second, I’m
going to start an investment bank business.’”
The two of them started the business and pulled
off a few deals. But after a few years Paul became
disillusioned; he found investment banking to be very
mercenary. Adding value? Building relationships and
goodwill? Forget about it.
“You can be dishonest and get away with it,” he
admits. “I wanted to get into a business that was driv-
en by relationships and would have a positive impact
on the community.”
The brothers found the box making business appeal-
ing because it was “low tech,” regional, and had assets
they believed they could leverage. They wrote to 450
box plants and heard from two dozen that were willing
to talk. They narrowed these to five doable deals, wrote
a business plan, and raised equity from banks, friends,
and family members, including Paul’s old girlfriend’s
father, who wrote a check for $160,000. In the late 1980s
banks were much more willing to lend money, even to
those who had never run a business, like the Centenaris,
who were both in their early 30s at the time. In 1988 they
bought Atlas Container, which hadn’t lost a penny in
20 years. They paid $3 million, according to an Inc.
magazine article that profiled them in 2003.
According to Paul, it took them a year and a half to
drive Atlas into the ground. It was a humbling experience. But within two months they reversed course
through intense cost-reduction tactics, including working
out new terms with containerboard suppliers and not
replacing employees who left the company. Paul credits
this turnaround to following the beliefs and practices of
the late Harry Figgie Jr., a Harvard MBA who was a cost-reduction expert with Booz Allen Hamilton.
Over the past 24 years the Centenaris have purchased three box plants on the East Coast and have
experienced their share of setbacks and struggles
with them. Today Atlas operates a plant in Meriden,
Conn., in addition to its Severn, Md., location.
“[Box making] is a hard business to grow,” Paul
admits. “But failure wasn’t an option. I’ve lost a lot of
battles along the way but I have to win the war. In sports
you have to learn how to come back from losing. It
doesn’t come easy but it’s all about the comeback.”
Chesapeake Bay Candle,
Rockville, Md., a potential
customer, had problems
with its candles knocking
into each other while in the
box. Holston recognized
that the candles needed an
air cushion. After months
of testing, he solved this
challenge by putting pulp
mold inserts in the top and
bottom of the box.
Atlas, with a $40 million annual revenue, provides boxes ( 65 percent of
them brown, the rest one-,
two- and three-color) to
about 800 customers in a wide variety of industries, including printing, publishing, produce, lighting, framing, flooring,
and ceiling tile. When the Centenaris bought the operation 23
years ago, it was a sheet plant with many local customers. But
in 1993 it bought a corrugator and expanded its radius to 200
miles. It now also sells to customers in Florida, Tennessee and
Indianapolis. Last year it contracted with the U.S. General
Services Administration (GSA), allowing it to offer its boxes
to all government buying agencies through the GSA website.
Twenty percent of Atlas’ boxes are shipped the same day
D.J. Holston shows the redesigned
or next day. Containerboard inventories are kept at 10 days
to two weeks.
Growing in Maryland is a challenge, Peter admits.
“I’ve seen a lot of business go to Mexico, reducing the
size of the [box-buying] pie,” he states. But recently he has
noticed a deceleration in this well-recognized trend.
“The growth right now is in food and produce,” he states.
corrugated box he developed for
Chesapeake Bay Candle.
At a Glance:
Location: Severn, Md.
Established: Purchased by the Centenari brothers in 1988
Management: Paul Centenari, ceo, and Peter Centenari,
executive vice president
Annual revenue: $40 million
Footprint: 250,000 sq ft
Mix: About 800 customers in a wide variety of industries,
including printing, publishing, produce, lighting, framing,
flooring, and ceiling tile.
Key equipment: 87-in. Fosber/Marquip corrugator, 50-in.
2-color flexo folder-gluer, 38-in. 3-color flexo folder-gluer, two
37-in. 2-color flexo folder-gluers, 35-in. 2-color flexo folder-gluer, 24-in. mini flexo folder-gluer, 2 66-in. rotary diecutters,
Maramatsu flatbed diecutter, Solarsoft Smartrak barcoded
inventory system, Kiwiplan corrugator scheduling and production control systems.