Reynolds Group Holdings

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Reynolds Group Holdings
Former type Private
Industry Packaging
Founded 1919
Defunct 2000 (acquired by Alcoa)
Headquarters Lincolnshire, Illinois, U.S.
Products Aluminum foil
Website www.reynoldsgroupholdings.com

Reynolds Group Holdings is an American packaging company with its roots in the Reynolds Metals Company, which was the second largest aluminum company in the United States, and the third largest in the world. The company became well known for the consumer product Reynolds Wrap as well as being a leader in developing and promoting new uses for aluminum; its RV Aluminaut submarine was operated by Reynolds Marine Services.[1] Headquartered for most of its existence in Richmond, Virginia, it was acquired by Alcoa in June 2000. Alcoa's consumer unit was acquired by Graeme Hart, a New Zealand businessman in 2008 and named Reynolds Packaging Group. Hart's other packaging holding were merged into Reynolds to create the present Reynolds Group Holdings.

History[edit]

The Reynolds Metals Company was founded in 1919 as the U.S. Foil Company in Louisville, Kentucky by Richard S. Reynolds, Sr., a nephew of tobacco king R. J. Reynolds. Initially, the new company supplied lead and tin foil wrappers to cigarette and candy companies. In 1924, the U.S. Foil purchased the manufacturer of Eskimo Pies, which were wrapped in foil. In 1928, Reynolds purchased Robertshaw Thermostat, Fulton Sylphon, and part of Beechnut Foil, adding them to U.S. Foil to create Reynolds Metals. In 1931 the company headquarters was moved to New York City and in 1938 the headquarters was moved again to Richmond, Virginia.

The company began producing aluminum foil for packaging in 1926. Reynolds Metals created the first high-speed, gravure-printed foil, aluminum bottle labels, heat-sealed foil bags for foods and foil-laminated building insulation paper. In 1940 Reynolds Metals began mining bauxite (aluminum ore) in Arkansas and opened its first aluminum plant near Sheffield, Alabama, the following year. In 1947, the company came up with its most famous creation, Reynolds Wrap Aluminum Foil. Meanwhile, Reynolds Metals pioneered the development of aluminum siding in 1945, and Richard S. Reynolds began predicting a growing demand for additional aluminum during peacetime. He knew it would not be long before new aluminum-producing facilities would need to be built to meet demand. Reynolds Metals Company leased, and later bought, six government defense plants that were up for disposal. Reynolds later expanded into non aluminum products such as plastics and precious metals, introducing Reynolds Plastic Wrap in 1982.

Four sons of founder Richard S. Reynolds, William Gray Reynolds, Richard S. Reynolds, Jr., David P. Reynolds, and J. Sargeant Reynolds, were all part of the running of the business. Richard S. Reynolds, Jr. succeeded his father as president in 1948 and under his leadership, the company underwent a major expansion with operations extended to countries around the world such as Venezuela and the Philippines. In 1976 David P. Reynolds, also known for his involvement in Thoroughbred horse racing, took over as president. He was the last member of his family to head the company and would retire as its Chairman.

Reynolds Metals was a pioneer in research and development of other products less well known to the public. Not all became commercially viable for the company, such as an aluminum bus developed with ROHR Industries, and other aluminum motor vehicles, where weight advantages were literally and cost-wise surpassed by steel, plastics and fiberglass. However, when it developed the world's first aluminum submarine, dubbed Aluminaut, the result was both an experimental product and one which participated in important work. In 1969, Aluminaut rescued Alvin (DSV-2), a smaller submersible of a newer design which continues its work 35 years later.

By 1991, Reynolds Metals employed 30,800 workers at more than 100 operations in 20 countries, including 64 plants in the United States, and had a total production capacity of more than 1 million tons of aluminum and aluminum products. The company merged with Alcoa on May 3, 2000 to become the largest aluminum company in the United States.

Headquarters of aluminum[edit]

Reynolds' former headquarters building near Richmond, Virginia in Henrico County, built in 1958, is one of the finest modernist buildings by the architect Gordon Bunshaft of Skidmore, Owings & Merrill. During its use by Reynolds, the Executive Office Building was known as Reynolds EXO. It was named to the National Register of Historic Places, one of the rare late 20th century buildings on the list.[2] [3] Making extensive use of aluminum, down to threads in the carpeting, it is now owned by the University of Richmond and serves as the worldwide headquarters of Altria Group.

Consumer products[edit]

The company became well known for its brand of aluminum foil, Reynolds Wrap. Reynolds Wrap was first made by a company called Reynolds Packaging, a business created to supply aluminum foil for packaging tobacco.[4] When Alcoa purchased Reynolds, it shed some non-metals packaging and printing businesses but preserved the Reynolds consumer brand, as well as the Reynolds Kitchens, which are still across the street from the former Reynolds headquarters building. Alcoa's Reynolds division was a leader in household baking and cooking products; a sister product to Reynolds Wrap is Cut-Rite Wax paper. On January 31, 2008 the Reynolds Consumer business was sold to Graeme Hart and is now operated as part of Reynolds Packaging Group.[5] In an initiative led by Paul D. Thomas, Reynolds Packaging Group CEO and a former Alcoa executive, on September 21, 2008, Reynolds announced that one of the foil plants that produces Reynolds Wrap, located in downtown Richmond Virginia, will be closed and foil operations moved to Louisville KY, which is where Reynolds Wrap was originally started. A small portion of the spooling operation from the Richmond Foil plant has also been moved to the Reynolds Plant in Grove City, PA in early 2010. Hart, who has never visited Richmond since the purchase, has also subsequently closed 5 other plants within Reynolds in efforts to increase profit margins and eliminate plants that under performed. As a reflection of the recessionary times as with most companies, salaries were frozen and salaried employees have not been given any pay raises, however union employees with fixed compensation contracts were given incentive compensation. As of early 2010 all pay has been unfrozen and salaried employees have since received pay adjustments.

The cost-cutting efforts in 2008 and 2009 culminated in issuance of more debt on behalf of Reynolds in October 2009 on the Irish Stock Exchange. This issuance allowed Hart to not only recoup his initial investment in Reynolds but also get substantial returns on his investment. Hart has since been named the 110th richest person by Fortune magazine.

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