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Mohawk - the evolution of a modern papermaker

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Mohawk - the evolution of a modern papermaker

August 05, 2012 - 16:00

BRUSSELS, Aug. 6, 2012 (RISI) -In June 2011, Mohawk (then Mohawk Fine Papers) announced the acquisition of Bravo Solutions, the latest in a string of purchases that positioned Mohawk for what it believes to be the future.

Bravo produces pre-converted paper-based products, pressure sensitive label stock, synthetic substrates, integrated products and embedded card sheets and magnetic materials. It has a coating and converting plant in Elmira, NY, not far from Mohawk's headquarters in Cohoes, NY.

Prior to the Bravo purchase, in 2010, Mohawk acquired LabPrints and worked with the LabPrints developers to launch Pinhole Press, a consumer-facing e-commerce business that allows users to create personalized photo products. The success of Pinhole Press, led to the development of Pinhole Pro, a robust, photo product service platform aimed at professional photographers, in early 2012.

In 2011, Mohawk also created and started its own B2B and B2C envelope business and now makes 30 million envelopes monthly.

Strategic partnerships were formed with leading on-line, print-on-demand businesses: Moo.com, a business card company that differentiates its products through the use of unique substrates and Blurb.com, which is a print-on-demand self-publishing house.

Jump forward to April 2012 when Mohawk officially changed its name and announced its vision for the future. This included consolidating its product offering, taking 22 paper grades down to six and reducing the number of stock items by 50%.

At the same time, Mohawk unveiled its new company website, MohawkConnects.com, which integrates e-commerce into all aspects of Mohawk's online activities and allows the company to support both B2B and B2C orders through one interface.

This new approach to the web allowed Mohawk to implement its Unified Service Delivery Platform (USDP), which is designed to create a seamless purchasing experience for all customers, whether traditional paper merchants, small quick printers, graphic designers, or large direct buyers. With this model it is the customer who decides how and when they want to do business with Mohawk.

And, more recently, at the Drupa exhibition In Germany, Mohawk shared booth space with European start-up, MetaPaper, a new concept in paper distribution partially owned by Mohawk.

Where is all this headed? In a wide-ranging interview withPPI,Mohawk chairman and CEO Tom O'Connor, Jr., described how he sees this smallish and privately-held fine paper producer evolving.

O'Connor says a "disturbing evolution" really brought about the significant change in Mohawk's business thought processes. "Change in the industry has been happening for a long time but it accelerated tremendously in the last recession.

"We created a culture of not just change and adaptability, but also of innovation. We brought in free thinkers to complement our papermaking background. If you just stay as a one-legged stool, you'll be out of business in five years. You need to create value and services, and hopefully provide a lot of your products in those services."

Tom O’Connor, Jr.: Bringing in the “free thinkers”

Back to bravo

The acquisition of Bravo can be looked at in two ways: it is part of Mohawk's evolving strategy but it also set the stage for the April 2012 announcements. "It's a little of both," agrees O'Connor. "If we look at our prior acquisitions, they were all in premium uncoated markets. We were already strong in digital but to broaden our product line, we wanted to add specialty substrates - polyvinyl, magnet embedded - that can be printed digitally. This sets the stage for further expansion into digital markets."

It is what O'Connor calls the "new generation of print". This is where the growth is, "not so much in the paper, but in the printing. We have a solid base of loyal digital paper customers," he adds, "but as their businesses evolve, their substrate needs do as well - so we wanted to create a product platform around their changing business needs. And if the enthusiasm at Drupa for digital substrates is any indication, we see global potential as well."

A family surprise
Mohawk Paper is a family-owned company that traces its origins back to the Frank Gilbert Paper Co founded in Cohoes, NY, in 1917. Chairman and CEO Tom O’Connor, Jr.’s great grandfather was an attorney and politician. After he died, the family found out he held the debt of Gilbert’s paper company.
Tom’s grandfather, a lawyer, was hired to handle the estate of Frank Gilbert. He ended up taking control of the mill in 1931 and was able to pay off the last of the debt in the early 1960s. Now, Tom’s son, Tom O’Connor III is a district sales manager and the fourth generation O’Connor to work for Mohawk.
In 2005, Mohawk acquired the Strathmore, Via and Beckett brands from International Paper and in 2009, acquired the SMART uncoated paper brands.
The company produces 110,00 tons/yr of fine (book, brochure) and digital paper (greeting cards, envelopes, photo). Having recently shut the Beckett, Ohio, mill, Mohawk now operates three paper machines in two paper mills in Cohoes and Waterford, NY. It operates two specialty converting centers in Ohio and New York with distribution centers in those two states as well as California and Washington.
Mohawk is very international with fulltime employees in Europe and Asia. Its main Asian office is in Shanghai. As well as a distribution center in Amsterdam, Mohawk has an office in Kings Kettle, Scotland. This came about when Mohawk tried to buy the old Curtis Paper company. However, developers won out for the land so Mohawk hired the mill’s sales force instead, one of whom lives in Kings Kettle.

As examples of substrates, O'Connor points to a casino that buys a lot of paper from Mohawk. Some of Mohawk's senior sales representatives were presenting the new synthetic substrates line to the casino staff. One, called Table Tent, can be used to make menus. During the meeting, the Table Tent example blew into a nearby swimming pool and was left there, ignored. After the meeting, someone picked it up and noticed there was no damage at all to the sample, that the printing on it was still perfect. It has been ordered for all of that chain's casinos.

In another, a pizza chain had a mailing list of students from a nearby university. This customer needed to stand out from other restaurants with a memorable direct mail piece. Using custom die cut and "embedding" capabilities Mohawk created a digitally printable post card with a pizza-slice-shaped magnet for a very successful direct mail campaign to the targeted audience. This die cut card campaign was a great success because every "fridge-magnet-slice" had the restaurant's phone number on it.

Along with the specialty substrates business came a full XMpie license, which the company is using to support its customers. For example, O'Connor cites a well-known US retailer that built a store in Rochester, NY. It had a list of 20,000 potential clients. With the help of Mohawk it was able to send each client a brochure with a map to the store from each individual's home. The software allowed the store to print 20,000 different maps consecutively.

A lot of digital printers call themselves ‘marketers with output,' says O'Connor. "We saw a market opportunity, where we are able to full end-to-end solutions including the supply of specialty substrates, not just paper. And, where possible, our help can go beyond the paper to the software."

Mohawk MakeReady is a service platform designed to help digital printers keep pace in the rapidly changing industry with practical tools and actionable guidance to help them meet their business objectives