From its start making wooden barrels, casks and kegs in Cleveland in the 1870s, Greif moved into fiber, steel and paper packaging in the mid- and later 1900s. Now headquartered in Delaware, Ohio, Greif has operations in more than 45 countries.

Greif has grown largely through aggressive acquisitions in recent years. Major buys have included Sonoco Products Co.s industrial packaging business in 1998; Van Leer Industrial in 2001 (an acquisition that doubled the companys size); CorrChoice in 2003; and Blagden Packaging Groups European and Asian steel drum manufacturing and closures business in 2006. Greifs numerous smaller acquisitions have included names familiar to the lubricants industry, such as American Flange and Manufacturing, Trilla Steel Drum and Evans Industries.

But one key purchase was different.

In September 2006, Greif acquired Delta Petroleum Co. and its subsidiaries, one of the largest independent lubricant and specialty chemical blenders and packagers in the United States. Greif wont disclose the purchase price, but according to its Form 10-K filing for the period, the company paid a total of $102 million for two acquisitions: Delta and its subsidiaries, plus a Russian packaging company. And Greif has said that Deltas revenues topped $182 million at the time of the acquisition.

So whats a nice packaging company like Greif doing in the lubricants business?

Its doing grandly, says Henry Johnson, vice president for marketing and business development at Delta Companies Group in Deer Park, Texas.

Built for Service

Delta Petroleum was founded in 1946 by the Maxwell family in Metairie, La., to blend and package lubricants for major oil companies. In 1983 the original founder sold the business to his son, Paul Maxwell, who started Delta Rocky Mountain Petroleum in Henderson, Colo., to blend for the majors, and who also entered a new line of business, glycol-based aircraft deicers. The company continued to grow, expanding its deicer business to the Northeast, and launching Delta Chemical Services in 1998.

Delta is a service company, explains Johnson, who joined the company in 1993 to champion Deltas expansion into chemical packaging. Service is our product. Were selling only services. Delta Chemical Services, with five Louisiana and Texas plants, was built to manufacture and/or package lubricant additives and other specialty chemicals for customers including Lubrizol, Afton, RohMax, Dow Chemical and many others.

In 1999, Riverside Corp., a Cleveland investment company, bought Delta from the Maxwells. Riverside liked lubes, says Johnson. The new owner supported Deltas 2001 purchase of Chicago-based lubricant manufacturer Olympic Oil, and its 2004 acquisition of packager Vulsay Industries in Brampton, Ont., Canada (near Toronto).

As early as 1998, Johnson recalls, Delta allied with Greif to meet its customers needs for drums and other packaging materials. It was the cornerstone of their interest in the acquisition, he says.

This Is Unique

Delta is Greifs first and only purchase of a company in an adjacent business, says Johnson. This is unique. Since the acquisition two and a half years ago, Delta has undergone a transformation. We now go to market with one face and one name, as Delta Companies Group, one mission and one vision, he added.

One notable element of that vision is to expand Delta beyond North America. Delta has a broad footprint that enables us to provide service throughout North America, said Daniel Lister, president of Delta Companies Group. We are focusing our expansion efforts in the key emerging markets of Asia and the Middle East. Were talking to our global customers, and exploring opportunities to bring value to them as a global service provider.

Someday, Delta packaging operations could be planted on other continents, like its parents farflung drum and container manufacturing facilities. In the interim, Lister continues, Delta reaches every continent by shipping packaged or bulk goods from its U.S. Warehouses.

Our core competence is liquid blending and packaging, Johnson says. The company provides lubricant blending and storage; chemical drumming; lubricant additive and antifreeze packaging; warehousing; logistics management; deicer and antifreeze blending; proprietary product manufacturing; bulk storage; and additive manufacturing and blending.

Deltas nine facilities in Texas, Louisiana, Colorado, New Jersey, Illinois and Ontario offer customers a range of capabilities. For example, the Deer Park, Texas, plant can fill 7,000 drums per day, has a 400,000-square-foot warehouse and rail siding for up to 22 rail cars. Metairie, La., has 50 million gallons of blending capacity and can fill 2,700 drums, 6,000 pails, 2,000 gallon cases, and 12,000 quart cases per day. The Chicago plant has 70 million gallons of blending capacity, nine blending tanks, 52 loading doors and capacity to receive product by barge. All the facilities are ISO 9001 certified, all handle hazardous materials, and seven of the nine have on-site laboratories.

Our information technology systems are integrated with our customers. Its one seamless system for the customer, Johnson remarked. We provide all the downstream support, getting the shipment to the right port with the right documents to be shipped to the right buyer.

Inventory control is also part of Deltas service, Johnson continued. Its important to be as totally integrated with our customers as possible. Our IT network is a real strength, and very cost effective for our customers.

Unlike its parent company, Deltas workforce is all non-union, with a mix of full-time and contract workers. The contract workers, Johnson explained, work mainly in the seasonal lines, like the antifreeze business in Chicago, which is very labor-intensive in season.

Facing the Recession

Greif has spelled out steps its taking in 2009 to reduce costs and improve cash flow. Those steps include active portfolio management – identifying facilities for possible closure; a hiring and salary freeze; curtailed discretionary spending; tougher credit policies and tight inventory controls; and a sharp reduction in capital expenditures. All these steps apply companywide, so Greifs service subsidiarys dreams of global expansion may have to wait.

Our business will see a direct impact of what happens to our chemical industry customers, Johnson acknowledged. We make nothing to sell for ourselves. As long as it snows, well make deicers, but if fewer planes fly, [our customers] will buy less.

The lubricants business doesnt have the same magnitude of cycles as chemicals, he commented. People still have to drive to work. But well see more extended drains, more energy efficiency. Well be affected. Everyone will.

Officially, Greif is stoic. With the economic downturn that began in our fourth quarter, we methodically and aggressively accelerated execution of a company program to reduce costs and increase efficiency, Greif Chairman and CEO Michael J. Gasser said in December. As a result of our controlled response, we will remain well positioned to deal with the global economic challenges and fast-changing business environment.