MeadWestvaco restructures packaging business

By Simon Pitman

- Last updated on GMT

Personal care packaging provider MeadWestvaco is to completely
restructure its business in an effort to increase its research and
development capabilities and cut down on costs.

The comprehensive plans aim to strengthen the company's position as a global player on the global packaging market by consolidating the six key divisions within the business in to two.

Key to this aim will be an Innovation Center, to be based in Raleigh North Carolina, together with the consolidation of its US corporate headquarters in Richmond, Virginia.

The two re-focused division will comprise a Packaging Resources Group that will serve customers of the company's paperboard businesses, together with a new Consumer Solutions Group that will focus on providing consumer packaging solutions.

"The new structure will enhance innovation and collaboration across the company's entire packaging value chain and streamline operational efficiency, resulting in a more responsive, flexible organization,"​ the company said in a statement.

The Packaging Innovation Center willbe led by Dr. Jack Goldfrank and will house research and development, emerging packaging technologies, material sciences and other packaging innovation resources.

"MeadWestvaco's strategy is to be the global leader in packaging and packaging solutions. To succeed, we must establish the right business model and the right structure,"​ said John Luke, chairman and chief executive officer.

"We are aligning our organization along targeted global market segments where we can establish leading positions, and we are strategically expanding into key global geographies to better meet our customers' needs.

"Our new, focused packaging platform allows us to leverage the strength of each packaging business while creating a more valuable shared resource for our global packaging customers."

The company added that its paperboard businesses are being consolidated into the Packaging Resources Group, which will enable it to tap into market opportunities.

The Consumer Solutions Group combines the company's packaging systems and consumer packaging groups to maximize on synergies in creative design, print, manufacturing and systems and equipment, and offer a more focused solutions.

MeadWestvaco's new Packaging Innovation Center will be located at North Carolina State University's Centennial Campus. The new Center will bring an estimated 200 jobs to Raleigh, North Carolina, and will provide the company with access to state-of-the-art technology and quality research partnerships.

Meanwhile the new headquarters will consolidate corporate support operations that will integrate key corporate and administrative functions and the headquarters for the new Packaging Resources Group and Consumer Solutions Group, resulting in an estimated 400 new jobs.

"Consolidating key business areas of our corporate and shared services operations is a critical element in executing our strategy. It will enable us to better support and lead our businesses, increase cost efficiencies and facilitate collaboration,"​ continued Luke.

The moves form a key part of plans for the company's previously announced $200 million cost savings initiative to streamline all of the company's internal services operations, including shared services for human resources, finance, procurement, logistics and information technology.

The company also announced that Mark Gulling, director, Global Shared Services, and vice president of Eastman Kodak Company, will join to lead the new group as president from February 27, 2006.

As well as personal care and cosmetics, MeadWestvaco is a global packaging player in the food and beverage, media and entertainment and healthcare industries in 29 countries.

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