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Alcan Packaging CEO Ilene Gordon: Passion for Packaging

Packaging isn’t terribly sexy—but don’t tell Ilene Gordon that. To hear the president and CEO of Paris, France-based, Alcan Packaging tell it, there’s plenty to thrill and excite about the alchemy of turning resins, aluminum, paper and glass into innovative containers for food, beauty products, pharma and tobacco.“I love packaging,” says Gordon, who credits her …

Packaging isn’t terribly sexy—but don’t tell Ilene Gordon that. To hear the president and CEO of Paris, France-based, Alcan Packaging tell it, there’s plenty to thrill and excite about the alchemy of turning resins, aluminum, paper and glass into innovative containers for food, beauty products, pharma and tobacco.

“I love packaging,” says Gordon, who credits her enthusiasm in part for her success recruiting and motivating employees in a competitive industry. “I’m able to get people excited; people on my team glom onto my energy and optimism.”

But Gordon, who also serves on the executive board of Alcan’s Australian parent, the mining company Rio Tinto Alcan, brings much more than a positive outlook and passion for packaging to Alcan Packaging, which employs 31,000. The 55-yearold’s formidable background began with undergrad and MBA degrees from MIT followed by four years with Boston Consulting Group and then a 17-year stint with Tenneco Inc., where she headed up the behemoth’s folding carton business and served as vice president of operations. Next, she rounded out her packaging background by joining Pechiney Plastic Packaging, which was merged with Alcan, a Montreal- based supplier of bauxite, aluminum, metal and packaging materials, in 2003.

Gordon took the CEO seat at Alcan’s packaging business in 2006, just before the entire company was acquired by Rio Tinto for a hefty $38.1 billion in July 2007. Analysts immediately speculated that the company’s packaging arm would be sold off—and continue to do so today. But Rio Tinto, a mining company whose businesses align most closely with Alcan’s aluminum and metals divisions, may have difficulty unloading the $6.2 billion packaging unit in today’s tight capital market. What’s more, the packaging industry as a whole is grappling with a number of challenges, including rising raw material costs, pressure around sustainability and the demands of increasingly global customers.

But acquisition rumors and industry pressures don’t faze Gordon, who has always found a way to thrive in difficult circumstances. Attending MIT back when the male-to-female ratio was 18 to 1, she graduated summa cum laude and is well versed in navigating a male-dominated industry. “It was perfect training for the environment of the business world then,” reflects Gordon. “Today, with so many women in most organizations, we forget what it was like back then.”

Her vision for Alcan Packaging is centered around expanding the company’s global footprint and creating innovative packaging solutions that trump cost as a selling point. Sales in emerging countries grew from 5 percent of total sales in 2003 to 18 percent in 2007—and Gordon intends to continue that trajectory. “There’s no reason why that number won’t be 25 percent in the next few years,” she asserts.

Alcan is also actively pursuing innovations that will help it stand out from competitors. Companies whose packaging consists of Alcan’s Ceramis film, for example, can boast that no solvents or other chemicals are used during the production process, so there are no emissions to impact the environment. What differentiates competitors in the packaging industry are innovative features like packages that open more easily, provide a longer shelf life, lessen environmental impact or take up less space so that customers can display more product per square inch, Gordon explains. “The right package—like plastic cans for Campbell’s soup—can re-energize a brand.”

She points to tamper-proof packaging as an innovation area that currently offers the most potential for packagers. Packaging that incorporates holographs or other printing technologies can help manufacturers and retailers prevent counterfeiting or spot counterfeit product.

But while such innovations are in hot demand, Gordon recognizes that end customers are only willing to pay so much for packages that can identify a counterfeit product, zip open or biodegrade. Even Wal-Mart, which professes to place a premium on sustainable packaging, isn’t willing to actually fork over a premium for meeting that ideal.

“If you have innovation you can deliver value, but the challenge is to bring that innovation at a cost that customers will accept for that product,” notes Gordon. “An extra 10 cents might be affordable to package a $5 pack of cigarettes, but not for a bag of potato chips.”

Alcan, however, has an innovation edge in its global footprint. The company already has 130 factories in 31 countries, including a recently opened facility in India, and plans another new one in the Czech Republic. “Among the leading packaging companies, there is no other that has operations in every major region,” notes Gordon, who plans to use that global presence to push for growth. “International players are looking for global capability, as well as packaging that is innovative and low cost. For a global customer, such as Kraft or P&G, we’re the only company that can deliver that around the world.”

About Jennifer Pellet

As editor-at-large at Chief Executive magazine, Jennifer Pellet writes feature stories and CEO roundtable coverage and also edits various sections of the publication.