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“I think I did everything that’s important in my life within a 30-day window,” says Chesapeake’s president and chief executive, Andrew Kohut, from his base in Richmond, Virginia. Within a month in 1979 he graduated from university, got married and joined the company he would eventually head.

After passing the Certified Public Accountant exam in 1980, Kohut went on to hold both financial and strategic roles at the firm. By 2001 he was executive vice president and financial officer, and in 2005 was named Chesapeake president and chief executive.

So far, 2008 has been an eventful year for the carton and plastic packaging group. In January, the company said it had renegotiated its banking covenants into 2009, despite reporting a 7% rise in total sales to £133.2m for the third quarter of 2007, because profits were lower than expected.

Chesapeake is now exploring as yet undisclosed “alternatives for non-core or redundant assets”, according to Kohut, who declines to comment on rumours that it plans to sell its plastics division.

Kohut also rebranded all of the group’s global operations under the Chesapeake name. Consequently, the prestigious Field name disappeared from the European carton industry after 158 years. “We respect and understand the importance of the heritage of all the businesses that we’ve acquired over the years,” he says without a trace of irony.

Global player
But he is also quick to point out that the company is more than just a Western European operation, with 47 locations in Europe (including 18 in the UK), North America, Africa and Asia.

“It was often confusing for our customers to see different names in meetings,” he says. “As we grow globally it’s important that people understand who and what we are.” But, as BPIF Cartons president John
Monks has pointed out, the change to such an Americanised name could pose pronunciation problems in countries like China as Chesapeake expands. “Obviously in different countries things work better than others,” Kohut concedes.

Kohut has cut a lot of ribbons over the past few months. In November last year he visited Kunshan, China, to officially open a new 3,600m² pharmaceutical carton, leaflet and label operation. Meanwhile, in January he opened a new plastics operation in Hungary that manufactures containers for the agrochemical industry. “The Hungarian move is just the start of us selectively moving into Eastern Europe,” says Kohut.

“Our markets are changing,” he explains. “There has been growth in the developing nations.” People in these regions now demand the same types of products as are used in the West. Kohut emphasises his desire to serve local markets rather than trying to save money by shipping products from the manufacturing source to retail outlet. While these practices may be cheaper now, this may not be the case in the future, he warns.

Chesapeake suffered a major blow when it lost its contract for blank carton work with British American Tobacco (BAT) following the closure of BAT’s Southampton factory in January 2007. Since the loss, Chesapeake’s sites in Portsmouth and Bradford have continued to do shoulder work and reel-to-reel wraps for BAT.

Despite the size of the contract loss (it accounted for 8% of the group’s paperboard packaging sales in 2006), Kohut was hesitant to follow BAT into less established markets. “Consciously, we chose not to go into Russia a few years ago,” says Kohut, who argues that despite the size of the company, it still has “limited resources”. However, “the focus that we have in those tobacco businesses continues”, he says.

Better communication
The tobacco operation comes under the branded goods section of the company. Last July, Kohut decided to reorganise Chesapeake and its subsidiaries into three divisions: pharmaceutical and healthcare, plastic packaging, and the aforementioned branded products. Neil Rylance, head of the European business, and his finance director, Richard Scully, were made redundant following the re-jig and the new section heads now report directly to Kohut.

“Our goal was to be more agile and responsive and we wanted to improve our ability to communicate with our customers and our suppliers,” he explains. “We really start and end with our customers, whether it’s being geographically placed or whether it’s products and services.”

True to his word, every two to three weeks Kohut makes the trip across the Atlantic to visit customers in the UK. “I have been in the business for 28 years and understanding our customers and what their needs really are is what we strive for.” He has even taken to watching a bit of Premiership football to keep up with conversations with customers, although, when pushed, he admits he prefers American football.

Understanding employees is as important to Kohut as understanding customers. Chesapeake has approximately 2,600 employees in the UK out of a total 5,500 worldwide, and many have worked for the company, as one industry insider puts it, “man and boy”. To bring them in line with the new brand philosophy, the company has developed ‘The Chesapeake Way’ (see below).

It is yet to be seen whether The Chesapeake Way will unite employees as intended, but ultimately, as Kohut says, “you need to be passionate in what you do to be successful”. After 28 years with the company, passion is definitely something Kohut has in spades.

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THE CHESAPEAKE WAY
Kohut describes this “living document”, which has been distributed to staff, as the company’s “DNA”. He hopes it will help focus Chesapeake’s 5,500 employees following the rebranding in January.

Do it right Integrity, honesty and safety at the heart of business
Thoughtful and thinking Creativity and innovation are critical
Speed has value Quick decision-making is imperative
Sustainable and surprising Pursuing environmental policy
Many languages, one voice Develop individuals from many backgrounds