Managing Director of Filtrona Filter Products Reflects on Parent Company''s Recent Name Change

Source from:  Tobacco Reporter  09/24/2013

Essentra was the first choice of P.T. Sreekumar when it came to choosing from a shortlist of 10 a single name to replace Filtrona and the names of all the companies that made up Filtrona PLC*. That is perhaps just as well because Sreekumar, the managing director of Filtrona Filter Products (FFP), told me in a telephone interview in July that he had always loved the Filtrona name. He had worked with it for a long time. It was a great name and a wonderful company.

But he was nevertheless supportive of the change to Essentra, he said, because the group, of which FFP was a member, had itself changed out of all recognition. It had grown organically and by　acquisition to the point where it included companies offering a range of products and services to different industries. So whereas Filtrona PLC had once been closely aligned with the cigarette filters business, it was now a bigger group, and it was important that it had an iden-tity that reflected and unified the totality of its interests.

In fact, the trajectory of FFP could well mirror that of the group to some extent and mean that in the future—perhaps a fairly long time in the future—the Filtrona name would have no longer fitted FFP either. The tobacco industry, for which FFP provides products and services, is changing, per-haps faster than some people realize, and Sreekumar is only too well aware that his company will have to keep abreast of these changes.

During our telephone interview, I asked him how he saw the future for FFP and, ever upbeat, he　replied that the future looked great. He talked of FFP's four cornerstones with which it had positioned itself in the market: quality, partnership, innovation and knowledge. And he went on to say that these key competences would only be enhanced by involvement within a more energized, unified group.

Sreekumar then made the point that FFP was enhancing its abilities to meet the opportunities created by the new direc-tions that the tobacco industry was moving in, for instance, in respect of smokeless nicotine devices and the nontobacco sec-tor, where absorption technology was critical. FFP, he added, had unique capabilities in this area. 

Asked whether FFP was currently working on products that were nontobacco, Sreekumar said yes. FFP studied industry trends, the directions being taken by its customers and what they expected of the company, and then it positioned itself accordingly. "Our customers are obviously becoming active in the nontobacco sector, and they expect people like us to support them in these activities; so we are involved," he added.

But asked whether he was able to be specific about what sorts of products FFP was involved in, he said it was a "little early for us at this stage." FFP was probably not at the founda-tion stage, but rather the building-blocks stage. However, he did mention that in the case of the smokeless product being sold on Ryan Air, for instance, there was a need for a material that could absorb a liquid and release it when the product was puffed. And he mentioned, too, e-cigarettes. "I think that as a responsible player we can add great value in this area, over and above what we are doing through our conventional filter manufacturing," he said.

Of course, FFP has been involved for some time in services not specifically to do with filters, for instance, through its Filtrona Scientific Services division, which offers a wide range of testing and product-development services.

So, perhaps in the future, the name Filtrona might have become too restrictive even for FFP. And, perhaps, the delib-erations of the group management committee were spot on when they led to the idea that the theme that linked the various companies that made up Filtrona PLC were "essential enablers"—a phrase that gave rise to the Essentra name.

Unified culture

The quest for a unifying name and culture was put in motion by Colin Day, who joined Filtrona PLC as chief executive in 2011. He was the instigator of the company's Vision 2015 strategy, which set in motion the creation of a more unified culture: one in which companies would work together in a coordinated way across the group, rather than down through the divisions. And the need for such change was said to have been given an impetus earlier this year with the major acquisi-tion of the health-care provider Contego.

So what are the benefits of having a unified culture, par-ticularly for FFP? Well, according to Sreekumar, there are a "whole host of benefits," but two in particular. One of these provides enhanced opportunities for employees, who should be able to move more easily between the group's various com-panies in search of the most suitable career paths. The inter-national nature of the group will provide employee opportu-nities aroundthe world, and one of the payoffs for Essentra will be that it will be training what Sreekumar described as globally competent managers.

In turn, having such managers in place will clearly be of benefit to FFP's customers, but they will also benefit from the fact that FFP, or Essentra Filters, will be able to more easily talk about the broad range of products and services offered by it and other Essentra PLC companies. "We recognize that we have a lot more to offer as the market evolves," said Sreekumar. "Today, we can say we could be the product and packaging solution to the [tobacco] industry; that unified competence is something we can now offer."

And that, Sreekumar added, was what he believed the industry was looking for: what he referred to as a "major innovation and support partner." With a unified Filtrona, FFP could be better, faster and smarter in supporting custom-ers both through the packaging and the product side. And at the same time, these employee and customer benefits would come back to enhance the value of the group.

But will there be any negatives associated with the name change? "I can't think of any," said Sreekumar. But, he added, Filtrona was a well-established name in the tobacco sector, and it would take time for people to become familiar with the new name; so obviously the challenge for FFP was effec-tive communication, and that was what the company was involved in: communicating to customers and other stake-holders the added value that the new identity could offer them without diluting the current focus and emphasis.

And the communications strategy seems to be working because, asked whether there had been much reaction from customers and whether it had been positive or negative, Sreekumar said that he hadn't heard anything of a negative nature. What FFP had done was to inform its customers
about the rationale behind the development and share with them the benefits that would accrue from it. "Customers look at Filtrona's competitive advantage and  the value creation that Filtrona can add to their business," he said. "And when we say to them that all that can only be enhanced—it won't be diluted—they are quite comfortable."

And what about the reaction from FFP's suppliers? There again, said Sreekumar, as with the customers, it was the relation-ship that mattered with vendors. "The vendors look at the credibil-ity of the company and the people who they are dealing with, and as long as the philosophy and the value system is the same, they are quite happy," he said. "Some of our vendors have changed their names in recent times, with no dilution in their support for us."

This sounds all well and good, but changing the name is an involved process, and I wondered whether there wasn't a danger that the management focus would drift from the main activities of the company to those activities involved in the name change. Sreekumar conceded that this might be a
problem if the exercise were not well planned. But in this case it was a "very, very well-planned activity." Responsibilities had been allocated and there were steering committees to review each of the stages of the program. And because it was a planned activity with clear responsibilities and set tim-ings, life was a lot easier than it otherwise would be. And, while employees might have to go that extra mile, it was not expected that the process would hinder in any way the com-pany's day-to-day activities.

Nevertheless, changing a company's name, let alone a whole group of companies' names, is not a straightforward process. Basically, there are two aspects to it. One is the practi-cal side, where packaging materials, uniforms and signs have to be changed in a synchronized way, so there is a consistent standard across the group. There is little point in all of the companies changing to signs displaying the same name if the colors of those signs vary from location to location.

The second aspect relates to the group's statutory responsi-bilities: the obligation to register names and trademarks in the countries where the companies operate. And this point raises a question. What will happen to the Filtrona name? Well, according to Sreekumar, there is no intention of letting some-body else use it. "We will hold on to all of the trademarks going forward, until it is no longer possible legally to do so," he said.

And after that? Sreekumar wasn't concerned. "As I said, we believe in communicating with the market," he added. "The Essentra name should be well established within a short space of time—within a year or so."　Enditem