Board Converting News, April 26, 2021

Consolidation (CONT’D FROM PAGE 10)

Puhl custom designs systems to meet your needs. • Moving to a new facility? Puhl has experience moving entire plant systems all while minimizing down time in BOTH plants during the transition. • Below roof AND above roof systems custom designed to meet your needs. • New and Remanufactured Equipment (balers, blowers, separators, filters and more). Our Remanufactured equipment includes a warranty and offers significant savings. • NFPA and OSHA compliant systems designed by our NFPA trained engineering team. • Dust Briquetters, Certified Explosion Isolation Valves, Flame Front Diverters and more to control dust and meet NFPA requirements. • PLC Touch Screen Controls with Real Time Pressure Balancing and Real Time Remote Monitoring available on your smart phone or computer. leging major containerboard producers engaging in illegal anti-competitive conduct with respect to the sales of con- tainerboard products. Although the hot breath of competition is not evil, within large consolidated organizations there is a penchant to be destructive, inefficient and wasteful. The time squandered in competing internally is better utilized collaborating to gain profitable sales growth and cash flow by working to- gether against the external competitors. In other words, competition is good, but it is not a helpful dynamic in a seamless collaborative team process such as consolida- tion. In effect, don’t let strengths become weaknesses. A new generation is coming to the workforce with on- line experience from playing quick-thinking video games. These influencers have figured out how to compete through software games that can prepare them to work, even at home with complex programs or organizing data. The future of small business depends on its ability to find a dazzling array of ways to operate. So, have courage and collaborate with suitable peers and competitors. Why? To form key relationships in order to achieve circular man- ufacturing economics (co-creation). A corporate culture where a team does not sustain collaboration and plays it safe will find it easy to lose when consolidating. But when we all work together, we will be competitive and win. John Widera is the Owner and Chairman of Santa Fe Springs, California based CalBox Group.

warm up…the real job is making it work. Synergies from increased scale is often an illusion. • Organic growth remains challenging to achieve for a dozen reasons. Bring on the entrepreneur. • Mill stocks are high so their unissued low-priced stock can be sold for more M&A plants without incurring debt. Its success depends on management effectiveness. • Private equity sharks and investment bankers are al- ways available to fuel deal-making. So, weigh alterna- tives, then put dollar signs on decisions. • High capital intensity and growing markets means cy- clicality is largely supply driven. Now the elasticity of supply (rate of quantity and price) comes into play. Consolidation strategies have changed from cost and product driven motivation to market and customer orien- tation. This rationalizes paper mills to buy independent containerboard converters instead of exporting at lower prices about 15 percent of their mill capacity. Thus, in the last few years in Southern California, no more than seven sizable independents remain. This places a domino effect on the sales of sheet feeders and convert- ers with corrugators Now there are fewer roll stock buy- ers, more integrated networks of traders and fewer AICC members to represent the brick and mortar “little guy.” One major cause and effect of consolidation is re- vealed from antitrust class action lawsuits of the past al-

Balers • Shredders • Trim Collection Systems • Dust Collection Systems • Cyclones Trim Separators • Spiral Duct • Used Equipment • Filters • Briquetters 240 Airport Road | Gallatin, TN 37066 | 615.230.9500 | FAX 615.230.9590 | | Follow us on LinkedIn


April 26, 2021

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