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Mohawk - the evolution of a modern papermaker - Part II

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Mohawk - the evolution of a modern papermaker - Part II

August 12, 2012 - 23:49

BRUSSELS, Aug. 13, 2012 (RISI) -A new approach for Mohawk (previously known as Mohawk Fine Papers), that includes a string of acquisitions and strategic partnerships, and an updated approach to the web, is positioning the company for what it believes to be the future of papermaking.Read Part I here.

Selling a solution

If one looks at the digital printing industry, it is easy to see how it has evolved beyond simply putting marks on paper. Print service providers who are poised to survive require a broad service portfolio including such offerings as diverse as personal websites, data base management, personalized direct mail alongside short run, full color printing. O'Connor gives the example of a consumer designing the car he or she wants through the use of a web page. The customer-specific information is submitted to a digital printer who then "builds" the car in the specified color and customer-specified features, includes it in a printed brochure with the price. "Now, we're all selling a solution, not just a product."

Does all this mean the demise of traditional paper? No, says O'Connor, "but we don't see a lot of growth in traditional papers we've been in. I see a day in the near future when 40% will be papers with specialty substrates."

One key aspect of the developing market is that everything is on demand. "One market we know is growing is photography. With advances in print-on-demand technologies there is a lot of growth in the high-end premium photo market because consumers can now control the process. As a result, they find more and more ways they can use their images."

Selling expertise
Mohawk Paper makes more than $1 million annually selling its expertise to other papermakers. O’Connor explains it is just another form of diversification, totally separates from its digital developments.
Mohawk has a strong presence in the envelope sector and also has a strong engineering group and it is cashing in on this knowledge. It recently started working with a mill in China. And, obviously, it will not work with competitors.

Another important aspect of Mohawk's growth will be the partnerships it has formed. O'Connor says relationships developed with paper customers, Moo.com and Blurb.com, have deepened as they started to look for more interesting substrate solutions.

Moo.com is based in London and is a business card producer, catering to a high-end clientele by differentiating its products with substrates and smart design templates. "Prompted by Moo, we figured out how to put a colored layer in the middle of the cards and create luxurious, 4-ply cards that would run through an Indigo press."

When Blurb.com wanted a product that would appeal to the professional graphic design market, they turned to Mohawk papers. "They see the value in using the names of our brands in attracting customers," O'Connor says. Blurb.com attracts "visually sophisticated" customers and advertises Mohawk's Superfine and ProPhoto papers to help sell its products.

Almost 100 years old, the Cohoes mill is producing the paper for tomorrow’s markets

Finding opportunities everywhere

The Pinhole Press business came about via a chance meeting in a local restaurant. O'Connor was introduced by the mayor of Cohoes to the founder of a new startup that was developed at nearby Rensselaer Polytechnic Institute (RPI). He was interested to learn that LabPrints had developed software for traditional photographers. Coincidentally, O'Connor was looking carefully at the photo business and eventually bought the company. "Our marketing people were given the task of coming up with a strategy," O'Connor explains.

Mohawk developed a new B2C business on the LabPrints platform called Pinhole Press. As O'Connor notes, it is the first time Mohawk has gone directly to the consumer. The company invested heavily in design and branding and created a growing portfolio of cards, gift products, wedding albums, personalized wine labels. Consumers upload images into pre-designed templates and can order one photo album or 10 wine labels. "It's a big shift from our wholesale paper business!" remarked O'Connor.

As part of the business oriented to the consumer, how is Pinhole marketed? Even here, Mohawk has embraced new technology. "One of the best ways we found was through social media and blogs," O'Connor says. The company advertises heavily in lifestyle blogs and has been featured on Martha Stewart, Cup o' Jo, and Real Simple.

MetaPaper is a European-based merchant with a digital front end. The company markets directly to printers and end users, with a new approach based on simplicity and price transparency. MetaPaper offers premium coated and uncoated white papers. It has the ability to deliver 50 sheets or a truckload overnight. Another innovative service, according to O'Connor is that a client can upload digital files for a potential job to Meta and receive digitally printed proofs overnight of the project on coated or uncoated paper, matt or gloss. Then, the paper is ordered online, 50 sheets or a truckload. Again, this is geared to the digital market.

O'Connor adds that Meta has a partner that does the printing. About 50% of the paper sold is Mohawk's; the rest comes from Meta's partners among the European papermakers.

Though European, O'Connor sees parallels between MetaPaper and the US paper business. He explains that digital printers buy differently than conventional offset printers. The amount of paper consumed may be the same in some cases, but the means to the end are different.

Most traditional mills and merchants have difficulty supplying small orders. "We feel a certain size order will be driven to the Internet," O'Connor adds. "For example, a digital printer will want 67 sheets of dark blue cover paper. With our new platform, our merchants can take this order and blind ship to the customer or the customer can order directly from Mohawk. In either case, we take this order online, pull the 67 sheets from our distribution center, and then charge for it. We never have to say ‘no' and we're still making money!"

The new sales initiative that accompanies Mohawk's move into the future does not mean the traditional merchant or on-the-ground sales representative will disappear. But, Mohawk believes there must be a second, complementary supply chain for the growing number of smaller orders that big distributors can't handle.

Mohawk has warehouses across the US that can reach 90% of the country overnight. "We built the e-service platform so that our merchants can use it, and our end users and printers can use it.

"Customers want choices so we'll provide a number of ways for customers to buy our products," O'Connor says. And, he adds, people are willing to pay the price.

Pinhole Press is an online boutique for personalized, inspirational photo gifts
From photo books and holiday cards to calendars and day planners, Pinhole Press makes simple, high quality, functional photo products. For more information about Pinhole Press, visit www.PinholePress.com

Helping clients grow

The title of this article is Mohawk's new business campaign. O'Connor sees it as a promotion of Mohawk's abilities to show customers what they can do and help them grow. "We are building the capability to help you make whatever you want.

"For years, like other mills, we just supplied a product. Now, we are trying to be much more, whether providing substrates, software or traditional paper, or just getting 11 sheets to Dubuque, Iowa, for a school project."

The relatively small size of Mohawk can be an advantage when making business changes of this magnitude. "Absolutely," O'Connor agrees. "Our size is clearly an advantage when trying to morph into other businesses. There is no bureaucracy here; there is tremendous involvement from all. We have regular full company meetings when we tell employees where we're aiming, the financials and the challenges."

One of the things that O'Connor has tried to foster is cross-pollination. For example, company president Jack Haren not only buys pulp but is also in charge of international sales. He was a former CFO of Union Camp. Senior vice president of manufacturing, Kevin Richard, also oversees customer service.

Where does O'Connor see Mohawk in five years? "Thriving and growing the business as now. The keys to growth will be the development of technology."

O'Connor sees at least 60% of what Mohawk sells will be what it manufactures. Another 20% will come from the e-service side. Continued international growth is also in the cards.

"We try to adapt to our customers," O'Connor adds. "We'll always have our traditional customers but there will not be enough growth there to sustain us going forward. We always ask our customers what they want to do and say: ‘Let's partner on that.' We have a staff of 15 developers working on these things. But, they have also helped with our traditional offerings and services.

"My late father wouldn't know what to think."

In concluding, O'Connor says he wants to encourage others in the industry to contemplate change in a more rapid way. "Success breeds success and there are still too many with a bunker mentality wondering if the old days will come back. The old days are gone forever."