Contract Packagers: Their Risk, Your Reward
Contract packagers are investing in your future.
by Daphne Allen, Editor
Contract packagers are expanding, either through square footage or new equipment, or both. New facilities and new packaging lines, for instance, are giving these contractors the capacity to expand campaigns for existing pharmaceutical customers. They are also allowing contractors to serve new companies.
Timing these investments is critical for contract packagers. “The investment in a facility and new equipment can be very substantial and can come with huge risk,” says Sandy Luciano, marketing manager for Sharp Corp. (Conshohocken, PA). “The contract packager must weigh the risks and rewards very carefully.”
But contract packagers can’t wait for signed contracts before assuming such risk. “Customers expect us to have the capacity and expect to not have to wait in order to get it,” says Paul Glintenkamp, director of pharmaceutical packaging for Packaging Insights Inc. (Norris, TN).
“We as contract packaging partners have to be able to accommodate surges in production and unplanned program growth,” adds Justin Schroeder, who handles marketing and business development for Anderson Packaging Inc. (Rockford, IL). “If you cannot, then you are really a liability to your customer.”
Schroeder says that contract packagers typically add capability or capacity before companies award programs. “Contract packaging involves enough perceived risk from the customers’ standpoint that they would not typically want to chance a program on an unproven service or capability,” he says.
To add capacity, Packaging Insights installed a new blister packaging
line this year. “We added an additional line for duplication and flexibility,” says Glintenkamp. “We needed identical lines so customer tooling could be run on either line. Our new line is intended to be our standard as we move forward, both for technology and flexibility.” Pharmaceutical companies therefore don’t have to wait behind another campaign—their project can proceed with the duplicate line.
As identical as the new line may be in terms of accommodating existing tooling, its features are unique. Micron PharmaWorks Inc. (Odessa, FL) supplied a rebuilt UPS-4 blister thermoformer originally from Uhlmann Packaging Systems LP (Towaco, NJ) with new control and monitoring systems. For instance, it features indexing and web control to maintain the registration of preprinted foil; a color vision system for handling multiple products at the same time; in-line bar code scanners from Microscan to verify unit-dose Reduced Space Symbology printed by a Hapa 231 UV ink printer; a pinhole-detection system for use with cold-form foil; and a new Windows-based human-machine interface system that can store multiple setups. It also features an extended feed area, enabling the use of up to three dedicated feeding systems. “We needed a flexible line so we could use it for multiple customers, while also reducing tooling costs,” says Glintenkamp. “We have validated it to handle up to 300 blisters per minute with various web materials. The speed, flexibility, and ease of use will provide more capacity and help us be more competitive.”
When Sharp Corp. built its new Allentown, PA, location, it built more space than needed for future expansion, says Bill Walker, vice president of sales and marketing. “We have left packaging space for undefined business, as we see a need for adding dedicated packaging lines in the future for new business.” He adds that Sharp is currently engineering further automation to its high-speed carding equipment to increase output and improve the compliance of carded blisters. “When we engineer advances in our equipment, we are also increasing the capacity of those lines, for future growth,” he adds.
Sharp has increased overall capacity through the Allentown expansion and through engineering upgrades of existing equipment, both to meet the new packaging designs and compliance demands it sees coming in the future and to grow overall business to meet the future needs of the pharmaceutical industry, says Walker.
For instance, when the firm moved its high-speed pouching lines to Allentown, it also upgraded three of the machines with new technology that will allow it to run more efficiently and make the five machines equivalent. “It allows us to run customer products on any of its five machines and increase our overall flexibility and capacity,” Walker says.
In the past five years, Anderson Packaging has grown substantially. “We have been in the fortunate position to have the capital resources available to expand and stay ahead of the capacity curve,” says Schroeder. “We have been expanding our facilities and packaging lines pretty much continuously.” The firm will be announcing another land purchase for its next planned expansion shortly.
Diamond Contract Manufacturing (DCM) recently expanded its services to meet the needs of existing customers and to anticipate industry growth. DCM’s new climate-controlled facility, next to Diamond Packaging’s carton-manufacturing plant, offers dedicated space for processes that must be isolated from others. According to the firm, such separation serves pharmaceutical companies with product launches requiring confidentiality, or projects that require zero-defect inventory control.
DCM also added clinical trial kit production and physician sample kit services, which include sourcing, fulfillment, packaging, and distribution. This facility will produce the diagnostic specimen kits and manage all aspects of fulfillment throughout a chronic kidney disease study through the Department of Pediatric Nephrology at the University of Rochester. The study requires patients to be tested several times over a five-year period. Funded by the National Institutes of Health (NIH), the clinical trial is receiving worldwide attention for its potential impact on pediatric kidney disease.
Other contract packagers have expanded their facilities as well. Fisher Clinical Services Inc., which handles clinical trial packaging and logistics services, has a new European Clinical Distribution Center in Horsham, UK, with automated warehousing and retrieval capabilities. And Reed Lane expanded with a new 130,000-sq-ft facility for blister packaging and bottle filling.
Contact packagers also need to offer a wide range of packaging options, says Howard Thau, president of Sonic Packaging. “We are constantly developing delivery systems and compatible packaging materials to offer our customers a unique packaging solution,” he says. “Although purchasing departments are busy sourcing their contract packaging needs, the scientists and R&D departments are realizing the importance in developing the packaging in conjunction with the product.” Thau reports an increased interest in both presaturated and saturate-at-point-of-use applicator blister packs.
Glintenkamp says that as a contract packager, his firm is often called upon to help companies switch from bottles to blisters, for instance. For other contract packagers heavily invested in bottle filling, such a switch may be hard to accommodate.
Anticipating such requests involves even more risk, especially when contract packagers may need to invest in equipment that supports emerging packaging styles.