AGI Media was bought by Atlas Holdings last year, changed its name and identity and then merged with Shorewood. Tony Garnish, European CEO of AGI Shorewood, tells Elizabeth Toppin how the company has overcome various associated challenges – but isn’t yet ready to reveal a new name.
We had a conversation about 18 months ago, when Atlas Holdings had announced that it was buying the AGI brands (AGI Media, AGI Amaray and AGI Polymatrix) from Meadwestvaco. Since then there has been a big merger with Shorewood Packaging. Talk us through some of the recent developments and how the new business model has been unfolding.
During the first year after the sale of the company, we at AGI thought about how to expand the business and find ways of adding new opportunities to our portfolio. Physical media is obviously very challenged, and while we don’t subscribe completely to the doom and gloom some people project, we do recognize the challenge. We were looking at how to add new business which would balance the home entertainment sector, which is very Q4-centric, and improve the utilization of our assets.
And then, of course, the news broke about the AGI merger with Shorewood. That was a lot to take on as well; how did that come about?
As the move forward with Atlas details began to unfold during 2011, the opportunity arose to talk to International Paper about the possibility about merging AGI with Shorewood Packaging. The different strengths and weaknesses brought to the table by both businesses created strong synergies with Shorewood having a strong US foothold outside of the home entertainment industry, and AGI bringing a presence in Europe in addition to the Shorewood presence in Asia. When you put that together with the AGI history and strengths in home entertainment, you begin to see the opportunity to get much stronger asset utilization and an enterprise that is much less susceptible to Q4 seasonality.
Overall the merger has made us fitter and stronger in terms of balance sheet, global connectivity and a very powerful innovative mentality. Both AGI and Shorewood were always very innovation-focused.
Presumably there were geographical advantages as well, with two relatively global companies?
Yes, the combination brought strength to Europe, with AGI’s presence and also throughout Asia where Shorewood was more established. We’ve gone from the old AGI in North America and Europe to a more powerful presence across the Americas, Europe and Australasia, with revenues more than doubling in the process. We are now a real global company that is able to offer a truly global proposition and provide our customers with services that range from highly creative packaging design to consistent, high quality printing in all parts of the world.
Recently we have been producing a very big job in the home entertainment sector which was started in Europe, then went in to production in North America and recently we have been trialling for production in Asia. Not all companies are looking for a global supplier, but there are some who have that requirement, and for those who just require more regional services we are well positioned to provide that service and move towards a global offering should that be desired later.
What about the morale generally? People can get nervous with takeovers and mergers and you have gone through both in a relatively short space of time. How have you overcome any worries?
Naturally, immediately following the merger – as with any merger – there can be a feeling of uncertainty and insecurity among employees as well as all other stakeholders. There has been some consolidation but we have come through this now having also made some positive and significant changes to our sales and management organisation. We knew that once we got through Q1 and had done what we needed to do to integrate the two businesses, we would be over the worst. That was true, and once we were through March the atmosphere lifted considerably as everyone could see the empowerment coming back to the business.
Presumably, again, with takeover and merger there will have been other management changes throughout the company and up to the very top level. Where do you fit in now, for instance?
As far as the corporate structure goes, we have a new CEO in the US: Mike Ukropina; three regional CEOs: Mark Caines in North America, Lucy Tzou in Asia, and of course me in Europe; and we also have a global CFO and EVP, Don Eldert. We have also made some significant management changes in the European structure. Dustin Wills who was originally at Shorewood is now head of our home entertainment sales. He is a very strong part of the team, with a vast amount of experience in that sector. Martin Bril, from our Van de Steeg facility in Enschede, Holland, has been brought in as Director of New Business Sales, which is to a new role. Basically, Dustin will handle the home entertainment market, and Martin will handle everything else. Another big change is Suvi Sylvelin in our UK office moving to head up the marketing department.
Another big issue surrounding takeovers and mergers is corporate identity. You recently had a change of identity and rebranding exercise following the Atlas acquisition, when you became AGI World. Now presumably you have to go through that process all over again to incorporate the Shorewood identity – how will that work?
I was asked to sponsor the rebranding process, which involves managing a group to carry out the task. That means that I need to remove any possible barriers they might run into as well as keeping the team focused. The branding team comprises the entire leadership team as well as people from both the US and European creative teams, and also bringing in creative people from Australia and Latin America. The first part of the process was one to one discussions with 30 major customers along with 120 online interviews. That was to help us get an idea of the perception, views and awareness of the brands, the names, etc. We now have to decide whether AGI-Shorewood is the best long-term identity and begin to build a new brand for the company.
So overall, it’s all a very positive message for employees, customers, and the industry in general?
Yes. We are now at that critical point where we will soon have to make the final decision around the branding. By the end of June we will be able to make announcements about the new brand and the new look. Obviously existing brands, like Amaray for example, will continue. As I said, once we got through the first quarter everything has settled down and is running much more smoothly. I’ve been with the company for over 19 years; when I first joined AGI it was the premier music packaging company in Europe and it’s nice to feel that we have continued to build and consolidate that position in home entertainment.