Greif Inc. looks to continue growth under new leadership

New leadership took the reins at Greif Inc. last week, as the Delaware packaging company wrapped up its best year ever while wrestling with kinks in the supply chain.

Ole Rosgaard, formerly Greif's chief operating officer, replaced Pete Watson as Greif's president and CEO. Watson, who held both titles for more than six years, is now executive chairman of the company.

Greif flies a bit under the radar in the Columbus area, but is a major player on the international packaging scene. The publicly traded company employs more than 16,000 workers in 246 factories, warehouses and offices in 41 countries.

Greif traces its roots to the Vanderwyst and Greif cooperage shop, founded in Cleveland in 1877, and retains a large Ohio presence. The company employs more than 1,000 Ohioans in 11 manufacturing and recycling plants, in addition to its Delaware headquarters.

Those workers make and recycle packaging products such as steel, plastic and fiber drums; corrugated paper containers; plastic "Jerrycans" and water bottles; plastic and paper tubes; and plastic bulk containers used to ship liquids.

"You think of us as a packaging company," said Rosgaard, "but think of the things you use every day – vitamins, Tylenol, the foam in your chair, your iPhone, your Gore-Tex jacket, the almonds you eat. All of that and more has been shipped in our packaging. Ketchup doesn't end up in a bottle in the field; it is shipped in our drums."

Greif has been able to keep all its factories working through the pandemic, even those in far-flung location such as Siberia and up the Amazon.

"For more than two years we've been operating our business in a global pandemic – we had (COVID) visibility in China very early on," Watson said. "We had to change how we worked to keep people safe, but did not change our performance. … We’re really proud we operated all our manufacturing plants the entire time and didn’t miss a beat."

The ability to sustain production during the pandemic, coupled with an increase in demand, helped Greif post record numbers last year. The company's sales for the year that ended Oct. 31 were a record $5.55 billion, up 23% over the previous year. Income leaped 260% to $391 million for the year.

Greif's stock is down a bit from a November high, but as of Wednesday remained up nearly 23% from a year ago. The company also has also recently added some awards to its shelf including being named to Newsweek's Most Loved Workplaces list for 2021, and receiving a gold rating for the fourth straight year in EcoVadis' annual sustainability ratings.

While the pandemic helped boost demand for Greif's shipping and packaging containers, it has also presented challenges to Greif and others in the packaging industry.

Greif has seen raw material costs rise, forcing it to either pass along those costs or absorb them.

On Jan. 19, Greif announced a $50 per ton price hike on some paperboard and at least a 6% increase on some other packaging products. And in the company's year-end call with analysts, Watson warned that profits will take a hit from the cost of steel, which Greif uses to make drums.

"Demand is pretty solid now," said Rosgaard. "The issue in the market – not just for Greif – is our customers are experiencing supply chain issues. They can’t finish their products, or they have transportation issues. Demand is pretty strong out there, but supply chain and labor issues are hurting the market."

Labor in particular is the biggest issue facing Greif, said Rosgaard and Watson. While Greif fares well in employee surveys, Rosgaard and Watson said the company is taking a look at its benefits and wages to deepen its labor pool.

Under Watson's guidance, Greif continued its growth in part through acquisitions, including 2019's $1.8-billion purchase of Caraustar, a paperboard company in Georgia, the largest acquisition in Greif's history.

While no new acquisitions have been announced, company leaders aren't ruling them out.

"We are always looking at acquisitions as part of our growth strategy," Rosgaard said. "It must fit our core business."

In a conference call with investors late last year, Greif Chief Financial Officer Larry Hilsheimer applauded Watson's tenure.

"As he took leadership at Greif, many things were broken. Since taking the helm in November of 2015, the results have been extraordinary," he said. "From my perspective, the Greif of today is a far different company than the Greif of six years ago."

Watson may have passed along the day-to-day operations of the company, but he remains bullish on Greif.

"We really feel good about the future of Grief and excited about growing the company," he said.

jweiker@dispatch.com

@JimWeiker

This article originally appeared on The Columbus Dispatch: Greif Inc. in Delaware looks to new leader to continue growth