In the ever-changing paper industry, innovation is key to success

In the ever-changing paper industry, innovation is key to success

2018-10-24T10:55:36+00:00October 12, 2018|INsource Newsletter|

Midwest Paper Group on Combined Locks has invested $30 million to upgrade its facility to begin producing paper that’s used in packaging, known as called “brown paper.” (Photo courtesy of Midwest Paper Group)

When was the last time you opened a box of fancy writing paper and actually wrote a letter? It’s probably been a while.

When was the last time you received a shipment from Amazon or another online retailer? If you’re like most of us, it was probably no more than a few days ago.

That, in a nutshell, describes the scenario facing one Fox Valley papermaker as it dramatically shifts its business strategy to adjust to the ever-changing market.

For more than a century, Appleton Coated in Combined Locks, Wisconsin, had a reputation for producing high-quality printing and writing grades of paper. In 2017, a decline in that market and other forces resulted in the closure of that plant. It was acquired by Industrial Assets Corp., which initially planned to sell the facility.

Instead, the company decided to reopen the mill under a new name: Midwest Paper Group. However, rather than continuing to only make what is known as “white paper” in the industry, the new company invested $30 million to upgrade its facility to begin producing paper that’s used in packaging—which the industry calls “brown paper.”

“White paper is in a declining market and you’re fighting to sell every ton,” explains Kyle Putzstuck, president of Midwest Paper Group, which will receive up to $1.8 million in state tax credits from WEDC to support the plant upgrades. “When you move to brown paper, we’re making both the inside and the outside of the boxes. It may not be sexy, but that market is growing tremendously, and we’re excited about it. We’re using our ability to make high-quality white paper and it put us in a position to make brown paper very, very well.”

Midwest Paper Group is one example of the how Wisconsin’s paper companies are innovating and reinventing themselves to respond to shifts in the industry.  To ensure that Wisconsin maintains its ranking as the top paper-producing state, industry officials say it’s imperative that companies not only adjust to market changes but also operate more efficiently than ever before.

A similar facility upgrade is taking place in Wood County, where ND Paper announced it was investing $189 million to convert of one of its paper machines to one that produces containerboard products. The company, a U.S.-based subsidiary of Nine Dragons Paper, also is adding a recycled pulp facility and making other improvements at its mill in Biron.

“The state’s paper industry has really found innovative ways to not only reduce costs, but to increase productivity and develop new value-added products—particularly in specialty products and packaging papers,” says Scott Suder, president of the Wisconsin Paper Council. “The industry has evolved, and it’s a result of a number of factors, including an increase in online shopping and online shipping.”

Expera Specialty Solutions in Kaukauna is another example of a company that continues to grow by developing new products.  In 2017, the company developed a product line called Health-Gard medical papers, which provides sterile packaging solutions for a variety of uses, including surgical drapes, hospital gowns and specialty wipes.

The company last year also unveiled its Glass-Gard interleaving paper product, which is used to protect glass plates from the abrasion and breakage that sometimes occur during handling and transport. The product offers the highest level of glass protection and is also resistant to fogging, staining and tarnishing.

In addition to developing new products, the state’s papermakers also are upgrading their facilities to become more efficient, Suder says.

“We’re seeing paper industry innovation that increases sustainability, and significant advancements in environmental stewardship across the industry,” he says. “Through innovation, older and less efficient facilities have really been transformed into world-class operations. Papermakers are reducing energy consumption, carbon emissions, and water intake. As a result, our industry is better positioned to compete in emerging markets.“That’s good for the environment, important for job preservation and a key contributor to Wisconsin’s economic comeback,” he adds.

That’s exactly what’s happening at Green Bay Packaging, which broke ground August on a new $475 million paper mill. The mill will replace the company’s existing recycled paper mill, which was built in 1947 and has been rebuilt three times. The new mill, one of the first to be built in the state in decades, will allow the company to increase its capacity by 50 percent, cut greenhouse gas emissions and eliminate wastewater discharges into the Fox River.  WEDC has awarded the company with up to $60 million in tax credits to support the project, which will create 200 jobs.

“This is one of the largest business developments in the state’s history and it will preserve 1,100 jobs,” Suder says. “Beyond that, it is truly innovative. They’re creating a state-of-the-art facility that is making them more competitive, but also helping the environment and preserving jobs as a result.”

With 35 mills in the state, Wisconsin’s paper industry employs more than 30,000 people and produces $14.3 billion in products per year. In 2017, the state exported about $882 million in paper goods, a 3 percent increase over the previous year, and exports are up thus far in 2018 as well.

“We’re a major contributor to the economic vitality of the state,” Suder says. “Every 100 jobs in the papermaking industry support about 325 additional jobs. It’s not just the industry, it’s all the ancillary jobs and employers, suppliers and much more.”

Because of the importance of the industry, Suder says it’s imperative that companies stay on top of the latest developments and continue to innovate. If that happens, he says, the industry should be able to meet the changes that lie ahead.

“The major investment by Green Bay Packaging and other companies is a signal that papermaking is here to stay in Wisconsin,” he says. “Yes, it’s evolving and yes, there are challenges, but the papermakers are making the investments right here in Wisconsin and they see a bright future.”

INsource newsletter
October 2018


ECONOMIC IMPACT OF WISCONSIN’S PAPER INDUSTRY

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EMPLOYEES
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BILLION IN ANNUAL PAYROLL
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NUMBER OF MILLS
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BILLION IN ANNUAL PRODUCTION
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MILLION IN ESTIMATED TAX PAYMENTS


Source: American Forest & Paper Association, 2017