Converting Economic Influence

0713Corr-plant

Region’s paper converters, packaging firms demonstrate growth through challenging times

Story by Sean Fitzgerald, New North B2B publisher

Ask the rest of the United States what came to mind 100 years ago in regard to northeast Wisconsin, and the two leading thoughts at the time were paper and cheese.

Both remain integral today, even if they don’t boast quite the same national prominence they once did. But both paved the way for a newer industry that was only in its toddler stage at that time 100 years ago – one that would quietly and humbly become one of the leading employers and economic drivers for the New North region.

In 2013, we often still don’t think about converting and packaging as highly as we think about other industries in the region. Big names like Kimberly-Clark, Bemis and Georgia-Pacific come to mind, but there’s literally dozens of other companies employing thousands of people and making hundreds of products we’re likely to at least see or use each day. In turn, these converters and packaging firms utilize hundreds of local small businesses in the region along the way to delivering their final product.

“The supply chain of services surrounding converting is so extensive in Wisconsin, and increasingly valuable in competing with the rest of the world,” said Susan Stansbury, executive director of Converting Influence, a 7-year-old industry trade organization representing paper converters primarily in Wisconsin between the Green Bay to Chicago corridor. “From trees to fibers, papers and materials, to automation and equipment suppliers, logistics experts, testing labs, ink suppliers, machine shops – it’s readily available in our region.”

Green Bay, the Fox Cities, Oshkosh all the way south to Chicago represents a converting corridor which is the U.S. hot spot for converting products like tissues, labels, foil laminated pouches, wipes, napkins, gift wrap and wall paper, among so many other products we use every day. Add to the equation allied companies who serve as vendors to the region’s converters and the industry mushrooms to tens of thousands of jobs in the state and hundreds of millions of dollars in annual payroll.

But it’s still difficult to determine a more precise impact converting and packaging have on the state and regional economy, said Stansbury, who founded Converting Influence and built its esteemed reputation before selling the organization and its popular trade exposition to a Chicago-based trade media organization this past June.

First, for government statistical purposes, it’s often grouped together with the paper industry which makes the “parent rolls” which converters then transform through value-added processes into the products with which we’re most often familiar. Second, Stansbury added, converters are frequently contracted by major national brand partners to produce the household and other products consumers see every day, but they often do so with deep discretion.

Widespread growth

Despite hard industry numbers, even the casual observer would note the appearance of converting and packaging industries increasing their strength across the region.

While larger expansion projects at well-known employers like Kimberly-Clark Corp. and Georgia-Pacific have attracted more headlines, the bulk of recent upgrades across the region have been for smaller firms of whom the public is less familiar.

Appleton’s Flair Flexible Packaging, which designs and manufactures flexible packaging solutions primarily for the food industry, completed a 14,000-sq. ft. expansion project last fall. Earlier this year, Little Rapids Corp. wrapped up a 97,000-sq. ft. expansion to a vacant manufacturing facility it acquired in Green Bay’s I-43 Industrial Park and moved its Larsen Converting operations, which manufacture paper sleeves, laminate and coat, and print on flexo film. Futek Forms, Tags and Labels just constructed an 18,000-sq. ft. facility in Neenah.

That’s just a handful of examples from across the region of converters who’ve expanded facilities. Many others have invested capital in upgraded equipment to increase capacity and develop new products.

Hoffmaster Group in Oshkosh acquired a new air-blown, point-to-point converting machine that makes high-end napkins that look and feel like linen, but have the convenience of being disposable. It’s FashnPoint lineup of napkin, placemat and catering products gained substantial recognition in the restaurant industry during the recession as five-star restaurants cut out traditional linen in an effort to become more cost conscious, said Cindy Herbert, vice president of marketing at Hoffmaster. In the same instance, FashnPoint products provide a means for less fancy establishments to enhance their image with little expense.

The brand new machine will complement the production of a second, more veteran machine that’s been running at full capacity, Herbert said.

“It’s a very unique product. We’re the only domestic manufacturer of that (point-to-point) process,” she said, noting such products are more popular with European restauranteurs, and as a result, this converting method is more prominent abroad.

Hoffmaster built its reputation decades ago on tissue-based napkins and was the first to come to the market with decorator colors. Like its CaterWrap product – a single-use, disposable LinenLike napkin wrapped in a tidy package around high-end disposable cutlery – Hoffmaster’s new product innovations reflect growth opportunities for converters in creating one-time-use, disposable or recyclable products that don’t compromise on quality or luxury.

That’s typically been the case with many new and continuing innovations in converting. Consider disposable diapers. Even toilet paper.

Well-known consumer brand Quilted Northern Bath Tissue was developed and first manufactured at Georgia-Pacific’s mill on Day Street in Green Bay in 1901. In the 110-plus years since that time, the leading bath tissue brand has been improved to become more comfortable, more environmentally-friendly, and retail in package quantities to accommodate any households’ needs.

Those kinds of product improvements enduring for more than 11 decades now don’t come without investment in innovation, equipment, personnel and facilities. The employer of 1,800 people at four plants in the Green Bay area is producing more cases of bath tissue than it was just 10 years ago, and doing so with fewer people, according to Mike Kawleski, public affairs manager for the company in Wisconsin.

“We’ve been very fortunate that Georgia-Pacific has continued to invest in our Green Bay operations,” Kawleski said, noting current projects to upgrade its coal boiler, water treatment facility and its electrical infrastructure.

With the size and scope of its operations, Georgia-Pacific also supports an Innovation Institute at its technical center in Neenah where it conducts research and development for all of its North American consumer products.

Support from allied industries

Appleton-based Integrated Paper Services Inc. has a long history in the Fox Valley that’s somewhat known among industry insiders, and often altogether unfamiliar to the general business community.

Now known more simply as IPS Testing Experts, the globally innovative testing lab supports the research needs of clients in the paper and pulp, nonwovens, personal care products and medical supplies industries. In the past six years the company has doubled its sales and doubled its staff, according to President Bruce Shafer, and all indications point to continuing growth this year.

“The growth of nonwovens in (northeast Wisconsin) has been really outstanding, in my mind,” Shafer said. “Nonwovens are growing at a rate of 7 percent a year for the past few years, even through the recession.”

IPS even experienced some physical growth itself, adding on a 4,000-sq. ft. addition to its laboratory facilities late in 2012. Shafer said the growth of IPS has been the result of a few different dynamics – paper converters doing less work with their own in-house laboratories and outsourcing to firms specializing in testing such as IPS; growing sales and product lines among its larger, traditional clients; and new customers stemming from an increasing number of converters spinning off into the marketplace.

Still, Shafer admits IPS still suffers from a bit of an identity crisis among smaller to mid-size converters within the industry. Shafer said he attended a nonwovens industry trade conference in Atlanta this past June – in which he estimated nearly a quarter of the attendees were from Wisconsin – and said he spoke with two perspective clients “from the neighborhood” who weren’t previously familiar with IPS. One was located just across the county line from IPS offices and laboratory, and the other was just two blocks away in the same Appleton industrial park.

“I’m going to a lot of national trade shows just to meet (converting industry professionals) from right here in northeast Wisconsin,” Shafer joked.

Future success

The future looks bright for converters in northeast Wisconsin and the entire Green Bay-to-Chicago corridor. With literally unlimited product possibilities, converters are running more new product trials, exploring product variations, and innovating for next-generation and “green” products, according to Stansbury.

Tissue segment converters remain particularly strong here in northeast Wisconsin, creating products for a variety of end-market uses in medical, industrial, construction and consumer goods fields.

And because of the bulk volume associated with many converted products, it isn’t necessarily cheaper to manufacture such goods in low-labor-cost markets such as Asia and ship them to distributors in the U.S.

“In our recent gathering of Converting Influence companies in May, we heard several stories of business coming back to our area from Asia due to transportation costs, quality, communications and reliability,” Stansbury said. “Like the economy in general, the converting industry is growing at a modest pace.”