It's time to come together.

The large impact of small business mergers

Mergers, partnerships, acquisitions, yeah, yeah, yeah, you've heard it all before and more than likely you're bound to hear it again. This rime, the talk around town is the merger between Film Fabricators Inc., (FFI) of Atlanta and the Johnson Bryce Corp. (JBC) of Memphis, two African American packaging companies, coming together to form the Hall-Bryce Alliance (HBA), the largest minority-owned flexible packaging company in the country with over $60 million in combined annual sales projected for 2001.

The partnership was suggested and orchestrated by the Procter & Gamble company, which promises a contract worth $100 million over a three-year period to supply the packaging of their Pampers diapers line. Howard Elliott, associate director of P&G's Minority Business Development Program, whose responsibilities include business `matchmaker' to becoming a supplier for P&G said "although Film Fabricators has been a supplier for P&G for the past several years, they are a small player in the industry. We wanted to continue our business relationship with FFI, but everyone involved understood that the business landscape was changing at a rate that outpaced FFI's capabilities."

Woody Hall, chairman and president of FFI, and Bob Johnson, CEO of JBC, each had complimentary existing equipment, data processing support, research and development capabilities, and engineering and manufacturing expertise in their operations that could step up to the variable needs of P&G. "It only made sense to merge," says Hall. "Small companies simply can't compete on the same global scale as their larger competitors. We must get creative in order to stay in the game in this marketplace."

Bob Johnson notes the alternative to merging with FFI would have been to ultimately sell out to a larger majority company. "That is something that we did not want to do. In order to survive, you must be able to solve problems, introduce something new, provide innovative solutions, and reduce cost for your corporate customers. Strategic relationships need to be formed where you are considered a part of the team," says Johnson.

"This alliance makes both companies a stronger supplier, leveraging size and sharing technology, all of which leads to doing business in other divisions and categories within P&G and introductions to other Fortune 500 companies domestically and internationally," says Elliott. "Because of the volume demand of large companies, FFI would have eventually dried up with 10% of the market," says Woody Hall. "With the merger, new markets are opened to us, as well as commitments from Frito-Lay and Coca-Cola"

As large companies look for ways to cut cost and consolidate their supply base, it is imperative that [they] ensure participation of minority-owned suppliers and manufacturers: from forming strategic partnerships, participation in community investments and providing reliable and nontraditional business models in this ever-changing and expansive market environment.