Golden Belt Manufacturing Co. History

Address:

807 East Main Street
P.O. Box 2332
Durham, North Carolina 27702
U.S.A.

Telephone: (919) 682-9394
Fax: (919) 688-1751

Wholly Owned Subsidiary of B-A-T Industries PLC
Founded: 1887
Sales: $45 million (1995)
Employees: 174
SICs: 2671 Packaging Paper and Plastics Film, Coated and Laminated; 2752 Commercial Printing, Lithographic; 2754 Commercial Printing, Gravure; 2759 Commercial Printing, Not Elsewhere Classified

Company History:

Golden Belt Manufacturing Co. has been associated with the packaging of tobacco products since its inception in 1887 and remains one of the largest manufacturers of cigarette packs in the United States. It was also engaged in other forms of consumer-product printing and packaging in the 1990s, when its goods could be found in virtually every convenience store in the United States. The firm was operating five plants: four in North Carolina and one in Canada.

Making Sacks for Bull Durham in the 19th Century

Golden Belt's story really goes back to the development after the Civil War of cigarette-grade "bright" or "golden" leaf tobacco in North Carolina. The firm of W.T. Blackwell & Co. established a plant in Durham for tobacco products, and Julian S. Carr, president of Blackwell's Durham Bull Tobacco Co., shrewdly promoted its wares under the Bull Durham trademark. The firm's success, however, was marred by a shortage of muslin bags, or sacks, for the loose smoking tobacco. These were being made by the women of Durham and adjoining communities, but not in sufficient quantity to meet the demand and were also not uniform in size. At best one worker could only produce 600 bags a day.

William Hall Kerr, a textile manufacturer, approached Carr in 1885 with a plan to develop a machine for manufacturing bags. Within a year he created a complicated device that, operated by a single worker, was capable of turning out 25,000 bags a day; indeed, in a public demonstration it cut and stitched 90,000 bags in a day. Kerr's machines were still in use in 1948. Carr won the rights to the invention for a royalty of ten cents for each 1,000 bags the company sold and established the Golden Belt Manufacturing Co. to produce them in the Bull Durham plant not only for the tobacco industry but also for manufacturers of sugar, salt, flour, meal, feedstuffs, and coins. The contract between Golden Belt and Durham Bull Tobacco stated that high-quality cloth sacks of different sizes "shall be perfect and such will readily pass the first inspection and certain approval of the inspector at said bag factory and such will not be twice handled or inspected by him." Soon Golden Belt was producing more than 13,000 Bull Durham sacks a day.

Commissioned by Carr and collaborating with Rufus Patterson, Kerr went on to devise a machine to stamp and label the bags. This was completed by the end of 1895--although Kerr had drowned during the summer--and was capable of weighing, packing, stamping, and labeling bags of uniform size at the rate of 25 per minute, enabling a single operator to equal the output of 42 handworkers.

Another Durham entrepreneur, however, was to reap the rewards of Carr's groundwork. Laboring in his father's tobacco factory, James Buchanan Duke used bright leaf for his first cigarette brands in 1881 and installed an improved cigarette machine three years later. Duke's output of 817 million cigarettes a day accounted for 38 percent of U.S. cigarette sales in 1889, and he subsequently branched out into the production of plug tobacco for chewing. (Cigarette consumption did not draw even with plug and smoking tobacco until 1921.) In 1890 Duke consolidated his holdings into the newly formed American Tobacco Co. At the end of 1897 he made a special trip to Durham to watch Golden Belt's Kerr-Patterson machine perform and called it the most ingenious piece of tobacco machinery he had ever seen. He purchased the Blackwell business in 1899 for almost $3 million.

Printing and Packaging in the 20th Century

A year later, a cotton mill to supply cloth for the bags was built at the East Main Street location where Golden Belt still maintained his headquarters in the mid-1990s. When the Supreme Court broke up the American Tobacco empire into smaller units in 1911 for antitrust-law violations, Golden Belt was the only existing subsidiary allowed to remain. The company began printing labels for Bull Durham sacks and book covers for roll-your-own cigarette papers in 1923. It produced its first Lucky Strike cigarette label using the letterpress process in 1926. Golden Belt also continued to make larger cloth bags for products like salt, flour, coins, and ammunition in this period and produced hosiery from 1922 to 1946. In the mid-1930s it registered and printed the slogan "Made to Quality Rather Than Price" for its sacks. The company became the first to employ gravure printing for cigarette labels in 1949.

Before cellophane, tobacco companies depended largely on tin foil in packaging to keep their products fresh. By 1964, however, the packaging of cigarettes involved a triple wrap of aluminum foil, paper, and cellophane. Several machines were involved in the process. The first wrapped an inner layer of aluminum foil and an outer layer of paper around 20 cigarettes. A second sealed the packages in an "overcoat" of airtight, moisture-proof cellophane. After being packed ten to a carton, cigarette packs traveled to a device that packed 60 cartons into a cardboard case. Golden Belt became, in 1975, the first company in the United States to use lasers to punch tiny ventilation holes into filter paper for cigarettes. This enabled manufacturers to carefully control the amounts of tar and nicotine reaching the consumer. By 1995 almost all filter paper was being produced by this means.

A $2-million, 34,000-square-foot addition to Golden Belt's Durham factory was completed during 1966-67. This project, which included the installation of all-new equipment, enabled the company to diversify its textile production, adding single and plied yarn for sale to knitters and weavers. The yarn was manufactured and sold in its natural color, without dyeing or finishing. The firm also produced injection-molded plastic parts for a short period in the 1970s.

Golden Belt, 1989-94

Although Golden Belt was doing work for all six major U.S. tobacco companies in 1989, its president, James Galioto, told the trade magazine Paper, Film & Foil Converter that the firm was "looking for accounts in other areas." He described its product line as "one-stop shopping for packaging materials," adding, "We consider ourselves a full-service production company in the printing field because of all of our unique capabilities." The firm's technical director said Golden Belt was cutting "across every printing and converting technology except screen printing." Its product line of consumer-product packaging materials included labels, closures, and inserts; cartons, cards, and tags; film, paper, and foil composites; film lamination for other printers; and point-of-sale materials. Pre-press facilities included typesetting, step and repeat, and platemaking.

The Durham printing plant was a 150,000-square-foot facility whose products included cigarette tipping papers on three gravure presses. A 160,000-square-foot installation in Reidsville, North Carolina, was specializing in large-volume production of foil and laminated gravure labels. A 28,000-square-foot specialty printing plant in Randleman, North Carolina, was producing labels, cartons, and a variety of laminations. GB Labels, a 10,000-square-foot plant in Burlington, North Carolina, was producing flexo and UV letterpress labels, hangtags, and point-of-sale materials. GB Converters, a 45,000-square-foot facility in Mississauga, Ontario, was producing cigarette tipping papers by gravure, mainly for the Canadian market.

Golden Belt's equipment at this time included five-, seven-, and eight-color gravure press units with sheeters for producing cut labels and a rewind for roll-fed labels, and two- and four-color gravure presses for producing roll-fed labels. The five- and eight-color presses were equipped with CC1 image processes for registration and quality. Golden Belt's two Heidelberg sheet-fed offset presses included a five-color one equipped with a CPC 1 control system for computerized ink and register control. Among the flexographic equipment were five label presses. An Arpeco label press was being used for the UV rotary letterpress work. There were four laminators: three for roll products and the fourth for sheets.

Golden Belt was placing more emphasis on its core business in 1994, when Galioto told a Raleigh News & Observer reporter, "Our roots have always been in the tobacco business. That is more true today than ever before." Although the company was making, for example, foil wrappers for Wrigley's Doublemint and Juicy Fruit chewing gum, it turned out, in 1993, more than 1.4 billion cigarette packs for all six major American cigarette producers except R.J. Reynolds Tobacco Co., which had its own in-house packaging operation. The reporter saw huge rolls of cigarette labels and foil wrapping emerging from floor-to-ceiling printing presses and laminating machines in the Durham factory. Recently installed computers and video cameras were monitoring every phase of the manufacturing process.

A spokesperson for cigarette manufacturer Liggett Group Inc. described her company as "a major customer of Golden Belt for many years," adding, "We've stayed with them because they are very competitive in both price and quality. It's an added bonus that they are located near our factory in Durham." However, Galioto said that because "things have been tightening up in the U.S. cigarette business overall," Golden Belt was "starting to look at overseas markets. We think that is where most of the future growth will be."

Golden Belt was still a subsidiary, in 1994, of American Tobacco Co., which was in turn a subsidiary of American Brands Inc. In December of that year, however, London-based B-A-T Industries PLC--which derived from a company once affiliated with American Tobacco--bought American Tobacco for $1 billion in cash and merged it with B-A-T's Brown & Williamson Tobacco Co. subsidiary. The transaction made B-A-T the third-largest tobacco company in the United States. Galioto did not expect the acquisition to have much effect on Golden Belt. "Basically, we have been allowed to operate as an independent company for many years, and that shouldn't change," he said.

Golden Belt Manufacturing Co. History

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