How a Rust Belt City Became the Largest Producer of Aluminum Containers
Exal Corporation, based in Youngstown, Ohio celebrates its 25-year anniversary this year, proud that it’s risen above the rust belt reputation of the city.
At one time Youngstown was the embodiment of a successful industrial city, riding the wave of the steel boom. But by the late 70s and early 80s that all came crashing down. There were a number of causes including industrial divestment and globalization.
To help reinvent the city in 1995 economic planners created The Youngstown Business Incubator (YBI) which offers resources and low startup costs for entrepreneurs. The plan had a particularly strong focus on advanced manufacturing. While companies did begin growing, it was far from a recovery. In fact, by 2010, the U.S. Census Bureau ranked the city at the top of the list of cities who had lost population. The city had lost 2% of its population between 2008 and 2010. So the city came up with a plan called "Youngstown 2020," which has had mixed success as the city wasn't able to return to its pre-recession job rate.
In 2012, the city got a boost as it was chosen to house the National Additive Manufacturing Innovation Institute, which is located at the YBI offices.
Understanding the city's background is essential to understanding Exal's foundation in Youngstown and how the company's roots in the town have helped it to achieve success as a global leader in premium aluminum packaging.
IndustryWeek talked to CEO Michael Mapes about his company's path.
IW: How did this global company start and stay in Youngstown?
MM: The company was founded in 1993 by Delfin Gilbert, who came over from Spain. When he discovered the strong work ethic of the city, where people took pride in their work and understood the Midwestern values he felt it was a perfect place to set up his company.
In 2010 the company, then owned by an equity firm, began investing in both the Youngstown plant and the other plants it had opened in South America.
For the next six years, the company was very focused on one customer, InBev and in 2011 we literally shaped the aluminum container market by pioneering both the aluminum beverage bottle and Coil-to-Can (C2C) technology in conjunction with InBev.
Exal wanted to expand that technology to other companies and in 2016 I joined the company as CEO. The company was struggling then but we were committed to staying in the city. This city has a very skilled workforce which is our competitive advantage. We have a large manufacturing operation here with 400 people.
IW: What were the expectations of your leadership?
MM: First let me explain the business. This company has a history of innovation. Our whole business is based on innovation. We are selling premium packaging so we had to be totally unique.
And to meet that need and continue growing the company the board, at the time, felt that my experience in global packaging for the past 10 years, as well as my consulting experience, would be a good fit.
IW What changes did you implement?
MM: First I brought in some talent from the outside. We made some changes on the board of directors and brought in talent from companies such as GM, and Pepsi.
And I took a look internally and listened to what improvements employees wanted to see. We created a formal system of values based on employee feedback. We now have better communication. We hold monthly town hall meetings and management walks the floor in the factories.
Our on-going goal is to continue to drive engagement levels across the company and further increase communication. We have a performance standard that we adhere to. And the millennial workforce is helping us on this path as they care about on the job training and job development. If they don’t have a career path they are less likely to stay.
IW: How would you describe your management style?
MM: I think people would say that I’m very open. I value transparency. I have an open door policy but also walk the floors regularly and talk to everyone. In addition to talking about the jobs they are doing I ask about their families. I view us a team and on a team every job matters.
IW: How does your style translate to growth?
MM: The new communication style, combined with my leadership style translated into a higher level of employee engagement, made employees happy which in turn translated to customer growth.
The business is growing at double-digit rates, both here in North America and also in South America.
Exal customers include some of the world’s best-known consumer brands -- most of them household names. Among them: Anheuser Busch, Johnson & Johnson, Procter & Gamble, and Unilever, L’oreal, and SC Johnson. If you have products in your home that are housed in aluminum containers, Exal probably had something to do with getting them there. Among products found in Exal packaging are sunscreens, hairsprays, air fresheners, insect repellents, deodorants, and beverages.
IW: How did you secure so much additional business?
MM: We have seen a dramatic change in consumer trends. Now, more than ever, consumers are concerned about environmentally-friendly products. They are tired of seeing plastic trash in the ocean. Our products are made of aluminum which is recyclable.
Another advantage of our packaging is that fact that it’s portable. Consumers wanted an alternative to a bottle which couldn’t be taken outside at restaurants, bar or outdoor events.
And visually our products are appealing. We use creative designs. When you see our products on the shelf we stand out. We use cool graphics. And we are very proud that all of these new products are around because of our cool company in Youngstown, Ohio.
