Metal Box Plc

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Metal Box Plc

Queens House, Forbury Road
Reading RG1 3JH
England
0734581177

Public Company
Incorporated:
November 29, 1921 as Allied Tin Box
Makers, Ltd.
Employees: 28,707
Sales: $1.154 billion (US$1.697 billion)
Market Value: $794.5 million (US$1.168 billion)
Stock Index: London

The canning of foods, or tinning as it is often called in Britain, has been a common method for preserving food for about a century. Before that time, all foods had to be purchased fresh, salted, or dried. The industry that developed to produce these cans, or tins, in Britain was originally controlled by numerous family firms, each with a small tin can making factory in which workers could turn out 200 cans in an hour. These family concerns were small, profitable, and only mildly competitive in such a large market.

One of the family can makers was initially a printing business established in 1855 by Robert Barclay, a Quaker. His main customer was Barclays Bank (owned by distant relatives) for whom he printed checks. Barclays brother-in-law, John Fry, joined him as a partner in 1867, and their company, Barclay & Fry, became Britains largest check printer. With the help of some technical information sold to him by an early industrial spy in France, Barclay developed the process of offset lithography and tried to sell it to many other firms. He died of a stroke in 1876 before any sale could be finalized.

The new printing process ended up being leased to Huntley, Boorne & Stevens, tin box makers for the biscuit company, Huntley & Palmer (the two Huntleys were also related). Huntley & Palmer was the first manufacturer to use the offset process to print designs on their own tins; prior to that their tins had been hand painted. Soon, Carrs Biscuits were also using printed tins; these were manufactured by their Quaker relatives, Hudson Scott & Sons. Some time during the 1890s, Barclay & Fry decided to use their offset process themselves, but they remained primarily stationery printers.

Decorated biscuit tins were very popular throughout Great Britain and many homes had quite large collections of them. There were Alice in Wonderland designs, tins to commemorate every grand occasion, and tins resembling miniature cottages or featuring birds, books or beauty spots. The tin making industry grew and since labor costs were low, profits were high. Soon, the Trade Boards Act required tin manufacturers to improve worker conditions and wages, and this caused some of the employers to form the British Tin Box Manufacturers Federation in order to protect their interests.

The First World War brought more business to the industry; a new product had to be manufacturedthe ration tin used by British troops. Due to government restrictions on tin, many of the companies in the Federation cooperated closely, and after the war, in 1921, four of these tin box makers, Hudson Scott, F. Atkins & Co., Henry Grant & Co., and Barclay & Fry, formed the Allied Tin Box Makers Ltd. A year later they changed their name to Metal Box & Printing Industries. From the beginning it was understood that each of the member companies would remain private, but that all would cooperate in controlling the market and making acquisitions.

Before long, however, the groups comfortable control of their market was threatened by the importation of an American method of semi-automatic can making that-could produce 200 cans every minute. G.E. Williamsons family firm, which had refused to join the manufacturers group, purchased the new American machinery in 1927 and began to produce cans for the governments Fruit & Vegetable Research Station in Gloucestershire. The research organization was interested in advanced canning methods in order to increase the markets for British farm produce.

Inevitably, with its superior technology, the American canning industry quickly became interested in the British market. American Can moved in first by purchasing a small independent company and renaming it the British Can Company, Ltd. It then attempted to acquire Metal Box & Printing Industries. However, in its determination to resist a takeover, Metal Box arranged a partnership that not only kept it independent, but defined and nurtured its growth. The company signed an agreement with American Cans U.S. rival, Continental Can. The two firms exchanged stock shares and Metal Box was given the exclusive right in Great Britain to purchase canning machinery, technical advice, training, and patent licenses from Continental Can. This effectively eliminated the competition as no other British company was able to purchase the technology. In little more than a year, British Can was in disarray. Metal Box agreed to buy it out on the condition that American Can stayed out of Great Britain and Ireland for the next 21 years.

These deals, illegal under todays business laws, had been arranged by Metal Boxs Robert Barlow. Still under 40, Barlow was now the head of Britains canning monopoly and determined to make it even larger. But his aggressive managerial style alienated most of the old family leaders of the groups companies, and many resigned from the board of directors. Barlow wanted to bring all member companies under one authority and ignored those on the board who opposed him. He set up an executive committee with two others, Hep worth and Crabtree, to make policy decisions and, essentially, to circumvent the board.

In 1931, Barlows committee instituted a single accounting system for all member companies in an attempt to force some kind of uniformity on them under a newly created head office. The managing director of Barclay & Fry tried to have Barlow fired, but Barlow called a meeting of the entire board and convinced them that his plan would make the company stronger still. As Barlow consolidated his position he banished some of his detractors to plants in South Africa and demanded the resignations of others. By 1935 he was in complete control of Metal Box and had largely succeeded in centralizing sales and supplies, and rationalizing production functions, for all the companys plants.

Metal Box experienced nothing but success during the Depression. As smaller canmakers collapsed, the company purchased them, and by 1937, Metal Box was selling 335 million cans a year. Following the American example, Metal Box had begun to manufacture the equipment needed to seal the cans on site and sold this machinery to its customers. Metal Box was not interested in expanding into the field of food production, but it did open a publicity department to increase interest in canned foods. Whenever there were difficulties, either with suppliers or customers, Metal Box considered a takeover. For example, inefficient management at a tin plate supplier in South Wales led Metal Box, with the help of Continental Can, to purchase the company.

Surprisingly, Metal Boxs income from security check printing combined with turnover from machine manufacturing and interests in mining, etc. was double that of its income from the cans themselves. Profits rose dramatically for Metal Box in the 1930sfrom £103,480 in 1931 to £316,368 in 1939.

Throughout the decade Barlow had maintained a strong interest in foreign markets. Partnerships or subsidiaries had been formed in France, the Netherlands, Belgium, India, and South Africa. Continental Can was still Metal Boxs mentor and main partner and the two essentially divided up the world markets between themselves. Metal Box was to expand within Europe and the British colonies, while Continental Can would develop interests in the rest of the world.

In the late 1930s, the innovative company planned to produce new forms of packaging such as card containers with metal ends and cans with wax lining for beer. However, the onslaught of World War II curtailed new production in favor of equipment for the troops. Containers for gas masks were easy to make in tin box factories, and Metal Box produced 140 million of them for the government. The paint tin production lines were adapted to produce casings for anti-tank mines. Shell casings and ration tins were also produced by the millions. Even so, due to strict government controls, company profits fell to £242,428 in 1945.

In 1943, as the war turned in the Allies favor, Barlow established a committee to plan new forms of packaging that could be exploited as soon as the war was over. Consequently, Metal Box was an innovator in the field, quickly moving toward paper, foil and plastic container products as the post-war economy began to improve. But Metal Box still dominated the British can and carton market. Between 1941 and 1961, eight new factories were built or purchased, and by the 1960s, Metal Box was the leading packaging supplier to some of the largest companies in the world, including Unilever, Nestles, Heinz, Imperial Tobacco, BAT, ICI, Hoechst, and Shell.

After the war, Metal Box was more than ready for further organizational changes. The accounting department was restructured and a financial comptroller was appointed. Additionally, administrative functions were more clearly defined and brought under central control, and subsidiaries were also made more accountable to central management. Barlow retained his position as executive chairman, but in 1946, he brought in D.W. Brough as his managing director. Brough had been in charge of operations in South Africa; however, he lasted less than two years. Barlow replaced him with two executives, G.S. Samways and D. Ducat, and these two men served as joint managing directors until Samways resignation in 1954; Ducat then served alone, but Barlow still maintained overall control until his retirement in 1961.

In the late 1940s, the U.S. Department of Justice had filed an antitrust suit against Continental Can and began to investigate its arrangements with Metal Box. The two companies hastily modified their agreement in 1950 and cooperation between them is now restricted to machinery and technical information; all mutual ventures and attempts at market controls were dropped. The modified agreement was renewed and slightly expanded in 1970 and will continue until 1990.

Up to 1970, Metal Box had continued to expand both at home and abroad. In Britain, Walks Tin Stamping Co., Brown Bibby & Gregory, and Flexible Packaging were all acquired, widening Metal Boxs product line to include plastic film, aerosols, central heating, and engineering. The company established facilities or subsidiaries in Italy, Malaysia, Tanzania, Japan, and Iran, and upgraded the older plants in India, France, and South Africa. Even so, Metal Box still conducted three-quarters of its business in the United Kingdom.

In 1967 the Board of Trade referred the British can industry to the Monopolies Commission which ruled that Metal Box was operating a monopolysupplying 77% of all metal containers, 63% of aerosols, and 80% of open-top cans. However, the Commission concluded that the companys monopoly did not harm the public interest and did not find Metal Box lacking in efficiency, innovations or service. Its report even praised Metal Box for passing on savings to its customers. But the company was instructed to terminate all of its exclusive arrangements, both with customers and with suppliers. Thus, in one stroke, Barlows market control procedures were ended.

Like the rest of the industry, Metal Box suffered from the recessions of the 1970s but its strength in the British market has continued to serve it well. The drastic reductions in its work force in the 1970s, and the sale of subsidiaries and properties, have given the company a leaner look. It owes much of its success to the long and tough administration of Robert Barlow, and it continues to be Britains largest can manufacturer.

Principal Subsidiaries

Risdon Ltd.; Metal Box Overseas Ltd.; Venesta Packaging Group Ltd.; Stelrad Group Ltd.; Stelrad Overseas Ltd. The company also lists subsidiaries in the following countries: Belgium, Bermuda, France, Ireland, Italy, Jamaica, Kenya, The Netherlands, Nigeria, Tanzania, United States, West Germany, and Zimbabwe.

Further Reading

Metal Box: A History by W.J. Reader, London, Heinemann, 1976.

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Metal Box Plc

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