BoardConverting Serving the North American Corrugated and Folding Carton Industries for 37 years June 7, 2021 VOL. 37, NO. 23
Using Buy-Sell Agreements For Family Business Survival BY PHILLIP M. PERRY A California-based family business was facing the worst crisis in its his- tory. Not only was its founding patriarch and CEO starting to exhibit signs of mental deterioration, but his erratic behavior was threatening the bottom line. Business decisions were being neglected. Customers were being mistreated. Top employees were headed out the door.
Kruger To Open Its First U.S. Corrugated Plant In Kentucky Montreal, Canada based Kruger Packaging has announced it will open a 400,000-square- foot box manufacturing facility in Elizabeth- town, Kentucky. The project will be Kruger’s first corrugated box plant in the U.S. and is expected to create at least 147 jobs in coming years, according to a media report. “Kruger Packaging will be a strong em- ployer in central Kentucky for years to come and I look forward to watching the company grow and help build a better future for Ken- tuckians,” said Kentucky Gov. Andy Beshear. Founded in 1904, Kruger Packaging’s par- ent company, Kruger Inc., produces every- thing from premium papers, publication and specialty papers, to 100 percent recycled con- tainerboard products, cellulosic biomaterials and even a line of wines and spirits. The com- pany is also a major North American recycler of paper and paperboard. Kruger operates 19 facilities across 10 sectors in Canada and the U.S., including locations in Maine, New York, North Carolina, Rhode Island, Tennessee and Virginia. “Kentucky’s pro-business climate was in- strumental in our decision to invest in Hardin
With the future of their company at stake, the other family members at the third-generation enterprise realized they needed to find answers to three questions: How could they convince the CEO to relinquish control before he damaged the organization irretrievably? Who would shoulder his responsibilities? And where would they find the money to purchase his corporate shares? Buy-Sell Agreements Our opening story is not unusual. Family businesses everywhere can find their future imperiled when a critical shareholder can no lon- ger exercise managerial duties. Sometimes the cause is physical or mental disability. Other times it is an unexpected death, resignation, termination, retirement, or divorce. Luckily, the California business was able to resolve its crisis by re- sorting to a tool available to family businesses everywhere. A docu- ment called a “buy-sell agreement,” drawn up years earlier, mandated the terms by which the family business stock was bought and sold and the procedures for responding to unexpected events threatening the CONTINUED ON PAGE 24
CONTINUED ON PAGE 4
WHAT’S INSIDE
6 x x 8 x x 12 x x 26 x x 10 Registration Open For ICPF Holiday Weekend In New York 12 Articles On Corrugated Demand Disregard Sustainability 6 ISM: Manufacturing, Economy Grow Again In May 3 Deadline Extended To Enter Box Manufacturing Olympics
Machinery and Handling for the Corrugated Board Industry
Machinery and Handling for the Corrugated Board Industry
AVERAGE CONTAINERBOARD PRICES The average prices reported are tabulated from prices PAID by various sources throughout the United States the week previous to issue. Prices in some areas of the country may be higher or lower than the tabulated average. The prices tabulated here are intended only for purposes of reference. They do not connote any commitment to sell any material at the indicated average. Transactions may be completed at any time at a price agreed upon by seller and purchaser.
REGION E. Coast Midwest Southeast Southwest
42# Kraft liner
26# Semi-Chem. Medium
$1005.00-1010.00 $1020.00-1030.00 $1020.00-1030.00 $1020.00-1030.00 $1050.00-1060.00 $1023.00-1032.00
Short Ton Del. Short Ton Del. Short Ton Del. Short Ton Del. Short Ton Del. Short Ton Del.
$940.00-990.00 $955.00-975.00 $955.00-975.00 $955.00-975.00 $975.00-995.00 $958.00-978.00
West Coast U.S. Average
SHEET PRICES BY REGION (AVERAGE) Per 1MSF, local delivery included, 50MSF single item order, truckload delivery. Sheets
E. Coast Midwest South-SW S. CA N.CA/WA-OR US Aver.
200# 275#
$62.26
$72.05
$62.69 $82.80
$85.35 119.54
$73.13 101.29
97.32
99.89
90.86
113.65
OYSTER UP-CHARGE 8.34
8.34
8.34
8.34
8.34
8.34
275# DBL-WALL 350# DBL-WALL
107.46 118.45
114.69 129.32
116.54 137.25 117.82 145.56
141.08 148.46
122.76 131.80
P E R F O R M A N C E D E L I V E R E D • HEAVY, DENSE BALES • RELIABLE AUTOMATIC TIER • LOW OPERATING COST PER TON AMERICAN BALER TAKES PERFORMANCE TO NEW HEIGHTS! 800.843.7512 AmericanBaler.com I N T E G R I T Y I Q U A L I T Y I R E L I A B I L I T Y I VA L U E
CANADIAN SHEET PRICES (AVERAGE) In Canadian Dollars, per 1MSF, local delivery included, under 50MSF single item order, truckload delivery. 200# 275# Oyster UC 275#DW 350#DW $78.56 $99.18 $9.00 $96.32 $105.83 CANADIAN LINERBOARD & MEDIUM The average prices reported are tabulated from prices PAID by various sources throughout Canada. Prices may be higher or lower in various areas of the country. The prices tabulated here are intended only for purposes of reference. They do not connote any commitment to sell any material at the indicated average. Transactions may be completed at any time at a price agreed upon by seller and purchaser. Prices are Canadian $ and per metric ton.
42# Kraft Liner 26#
Semi-Chem Medium
East West
$970.00
$960.00 $995.00
$1,015.00
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June 7, 2021
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Kruger To Open (CONT’D FROM PAGE 1 )
Core Competency
County, and we are grateful for the support we received fromGov. Beshear, Team Kentucky and Elizabethtown-Har- din County to make the announcement a reality,” said Mi- chael Lafave, Senior Vice President and Chief Operating Officer of Kruger Packaging. To encourage investment and job growth, the Kentucky Economic Development Finance Authority preliminarily approved a 10-year incentive agreement Thursday with the company under the Kentucky Business Investment program. The performance-based deal can provide up to $3.45 million in tax incentives based on the company’s in- vestment of $114.2 million and annual targets of 147 Ken- tucky-resident, full-time jobs across 10 years with an aver- age hourly wage of $32.50, which reflects both benefits and pay. Additionally, the finance authority approved Kruger Packaging for up to $1.58 million in tax incentives through the Kentucky Enterprise Initiative Act, which allows ap- proved companies to recoup Kentucky sales and use tax on construction costs, building fixtures, equipment used in research and development and electronic processing. In addition, the state said the company can tap resourc- es of the Kentucky Skills Network which provides no-cost recruitment and job placement services, reduced-cost customized training and job training incentives. Visit www.kruger.com for more information.
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UK Box Maker Invests In Baysek C-170 Die Cutter
The new C-170 was installed and commissioned in May 2021. Robert Jess, Sales Manager, UK & Europe, Baysek Machines, adds, “It was a pleasure to work with Mark and the team at CCC and further cement our relationship. Re- peat business with customers is testament to the manu- facturing excellence of Baysek. We are happy to contin- ue working with such a great company. The servo-driven C-170 represents a big investment and will give CCC the ability to handle higher volume runs and increase capacity even further to produce more complex jobs.” IP Launches Signature Pro Bono Initiative Memphis, Tennessee based International Paper (IP) re- cently announced the kick-off of the Signature Pro Bono Initiative, marking a significant milestone for the legal com-
UK-based The Corrugated Case Co (CCC) has recently taken delivery of a new Baysek C-170 die cutter, replacing an existing Baysek machine. “We have invested heavily in our team and process- es, combining the latest technology with extensive indus- try knowledge and expertise, designing, developing and manufacturing packaging that fulfills the needs of our customers, which is why we chose to replace our existing Baysek die cutter with the latest model C-170,” said Mark Wilcockson, Managing Director, CCC. “Baysek has been an integral part of our business for many years and the machine is one of the busiest in our factory, having served us well for almost 15 years. The new C-170 will improve both quality and productivity across our entire operation.”
munity in Tennessee and for individuals liv- ing in the state’s underserved communities. As part of the Tennessee Pro Bono Services Alliance, this initiative will help deliver equal justice to Tennessee residents by focusing specifically on expungement, voter rights restoration and driver’s license reinstate- ment. International Paper is honored to part- ner with the following organizations for this initiative: Butler Snow LLP; Bass, Berry & Sims PLC; Memphis Area Legal Services; and Just City. More than 130 attorneys and paraprofessionals attended the initiative’s virtual kick-off event held in mid-May. Now, IP and its initiative allies are asking lawyers around the state to volunteer their time and knowledge to help bring awareness to these issues, to be an advocate on behalf of indi- viduals in the criminal justice system, and to address the root causes that prevent equal justice for all residents in Tennessee. “This initiative will help confront the is- sues within our criminal justice system that prevent our fellow citizens from moving forward and becoming responsible and productive citizens,” said Sharon R. Ryan, Senior Vice President, General Counsel, In- ternational Paper. “We are excited to partner with these amazing organizations and chal- lenge others throughout the state to join our efforts. Through our work we can advocate for change that will improve the lives of ev- eryone in our communities and throughout our great state.” If you’re a member of the legal commu- nity and would like to help, contact Susan Mills at Susan.Mills@ipaper.com or call (901) 419-7160.
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40 ft of paper travel from preheater to hot plates 3 seconds of heat, glue and bonding 1 chance to get it right! the ZONE
Design & Production
Chicago Electric offers 10 technology solutions to control ‘the Zone’ CORRUGATOR Sectoral preheating plate
Our sectoral preheating plates provide direct heat by means of a double steam circuit, allowing for efficient heating in hard-to-access locations, as well as to act as a steam shower to open the paper’s fibre, making it receptive to absorbing the heat and the glue.
This translates into increased speed and improved quality of the cardboard sheet finish.
The system’s main advantages are as follows:
• The plate may only be used to heat, only to humidify, or both options at the same time. • The plate is sectored, which allows for applying humidity to the sections. • It provides temperature in previously inaccessible locations and near the location needed. • It compensates the loss of temperature dissipated due to distance, speed or limitations of the exiting preheaters. • Quick transferring of heat to the paper. • The combination of the hot plate and steam shower allows for providing heat even to the hardest papers to heat. • Does not dry out the paper. • Possibility of operating as a humidifier and pre-conditioner. • Maintains and improves the fibre’s elasticity. • Acts according to the operator’s needs. • Facilitates the paper’s hygroscopy to absorb the glue and improve rubberising.
CONTROLLABILITY
1. Wrap Arm - Position & Temperature 2. Preheater Direct Drive
DOUBLEBACKER IMPROVEMENT
3. Steam Plate 4. Contact Roll 5. Glue Machine Direct Drive Touch Productivity Issue—Glue Unit Many glue units run with a rider roll or a guiding bar system. The rider roll with paper gap allows a precise glue application, but requires frequent Contact Roll
PRODUCTIVITY
C/ Orfeó Català 13-15 · 08440 Cardedeu (Barcelona) telf: +34 93 846 01 06 · comercial@al-gar.com WWW.AL-GAR.COM
DOUBLEBACKER IMPROVEMENT
calibrations and settings. Bar systems avoid this, but compensate this with the risk of exces- sive glue application. The system contains many wearing parts. Solution The contact roll combines the ad antage of both systems and ensures minimum contact between board and applicator roll. The system uses small pneumatic cylinders in order to achieve a “soft touch.”
6. Gap Control 7. Curved Plate 8. Roller Shoe Press When it comes to a short-term increas of web tension, spring loaded systems with shoes or airpressure activated system have problems in compensating these. The system is lifted for a short time. This may result in de-lamination and in the ‘double kiss’ effect. Solution For a defined and exact bonding point of the web fiv weight rollers will be installed usually over the first flat hotplate of the heating section. The rolls are mounted into a frame, which is actuated by means of two pneumatic cylinders. P oductivity Issu —Double Kiss Bonding
PRODUCTIVITY
PRODUCTIVITY
DOUBLEBACKER IMPROVEMENT
Roller Shoe
DOUBLEBACKER IMPROVEMENT
9. Thin Wall Hot Plates 10. Pressure System Benefits —Exact glue application due to defined contact of applicator roll to web. Web is in contact to less flute tips compared to bar systems. • High precision glue application • Less moisture applied to web —No wear of shoes and springs —No adjustment of shoes or paper gap —Uniform glue application over entire w orking width for all flutes by use of pneumatic cylinders instead of springs — Less contamination by paper dust and glue remains —No jam of board because of web breaks caused by splice joints going through 630-784-0800 Benefits —Rollers secure exact defined first point of contact of liner and single-faced board - No double kiss —Frame design avoids unintended lifting of roller shoe (compared to spring or air loaded systems) - No double kiss —Pressure can be increased or released for special grades or products 490 Tower Blvd., Carol Stream, IL Contact Chicago Electric to GET IT RIGHT 630-784-0800 info@chicagoelectric.com chicagoelectric.com Solution The ProPress system ensures an optimum heat transfer to the board. It offers a wide range of set- tings. The loadi g pressure can be varied, the number of shoes can be lifted in accordance t the line speed. The outer shoes can be lifted in accordance to the paper width. The shoe bars will be delivered pre-assembled for a short installation time. —Liftable for easy paper infeed and for cleaning of the machine —Position adjustable in paper direction to avoid grooves in hotplate Press Productivity Issue—Poor Heat Transfer Rollers are usually limiting the heat transfer, since they often have contact mainly on the edges of the plates due to wear or bent plates. They also cause often loss of caliper and bearing need to be replaced frequently. Airpressure actuated systems can only supply a limited pressure and have com- pared to shoe systems a closed surface. Pressure Shoe
Plate vity Issue—Poor Heat Control l hotplates are slow to react to pressure due to high steam volume and massive y also have high heat radiation and heat profile. Worn plates can damage crease edge crush.
Thin-Wall Hot Plates
t by peripheral drilled hot plates. anufactured out of special wear and nt steel, through which a continuous is drilled, with one inlet and one outlet. ecured by a massive steel frame.
CORR24usa.com
ance from steam to paper surface results in fast heat flow n higher plate surface temperature
Benefits
New-Indy Issues Statement Concerning Odor Complaints
Box Shipments ( U.S. Corrugated Product Shipments) Industry Shipments In Billions of Square Feet Month December 2020
Ontario, California based New-Indy has issued the follow- ing statement regarding recent complaints: “We at New-In- dy are working diligently to address odor complaints from residents of York and Lancaster counties in South Caroli- na, and Union county in North Carolina and to comply with directives of state and federal agencies. “New-Indy and the U.S. Environmental Protection Agency (EPA) are continuously monitoring levels of hydro- gen sulfide at our Catawba mill and in several surrounding neighborhoods. We launched a dedicated website, new- indycatawba.com , with daily reports explaining the EPA’s independent hydrogen sulfide data collection, as well as information about our mill and public notices about oper- ational changes. “New-Indy continues to work cooperatively with local, state and federal authorities. Our priority remains ensur- ing the health and safety of our employees and the sur- rounding community. New-Indy is also committed to pro- tecting the environment, promoting economic vitality and supporting local charitable endeavors. We strive to be a responsible, contributing member of the region. A joint venture between The Kraft Group and Schwarz Partners LP, New-Indy is one of the newest independent suppliers of recycled containerboard in the box industry.
Year
Actual
Percent Change Avg Week Percent Change
2020 2019
34.916 31.332
11.4
8.729 7.833
11.4
Industry Total
Year-to Date
December 2020
Year
Actual
Percent Change Avg Week Percent Change
2020 2019
406.776 393.483
3.4
8.071 7.838
3.0
Industry Total
Containerboard Consumption (Thousands of Tons)
Year
Month
Percent Change Year-to-Date Percent Change
2020 2019
2.7727 2.5660
8.1
33.0739 32.3005
2.4
Container Board Inventory - Corrugator Plants (Thousands of Tons)
Corrugator Plants Only
Date
Percent Change Weeks of Supply
Percent Change
Dec. Nov.
1.8921 1.7912
5.6
2.7 2.5
8.0
Shipping Days
Year
Month
Year-to-Date
2020 2019
20 20
252 251
SOURCE: Fibre Box Association
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Registration Open For ICPF 2021 Holiday Weekend In New York Early Bird Registration is now open for the International Corrugated Packaging Foundation’s (ICPF) 2021 Holiday Weekend in New York. Scheduled for Friday, December 10-Sunday, December 12, 2021, this year celebrates the ICPF’s return to New York to enjoy the best Manhattan has to offer during the holiday season. Register by June 31, 2021 to save $200. Bring your spouse or guest for holiday shopping, sight- seeing, dining, a Broadway play, and enjoying New York’s holiday season, all while supporting ICPF’s educational programs and student outreach. This year’s event will begin with a Friday evening re- ception sponsored by Pratt Industries. ICPF guests will attend a Saturday matinee of The Christmas Spectacular at Radio City Music Hall, sponsored by BW Papersystems. On Saturday night, attendees will be treated to a reception and dinner at the renowned Lattanzi restaurant. The re- ception is sponsored by Fosber America, and the dinner is sponsored by the WestRock Corporation. Kiwiplan is also a sponsor of the weekend. In announcing Pratt Industries’ sponsorship for 12 years in a row, Brian McPheely, CEO, said, “As one of the origi- nal sponsors of ICPF’s New York event, Pratt Industries is honored to support this important industry cause in 2021.”
“We look forward to the event being the biggest and best ever,” added Jeff Pallini, President of Fosber America. Neal McConnellogue, President of BW Papersystems said, “Having just recently made a long-term corporate partner pledge to support ICPF, BW Papersystems is pleased to continue its ongoing sponsorship of ICPF’s New York event in 2021.” Rodney McGee, Kiwiplan’s President, said, “I hope you’re off to a good start this year. I don’t want to miss signing up for the ICPF weekend in New York.” Jeff Chalovich, CCO & President of Corrugated Pack- aging at WestRock summarized. “ICPF’s weekend in New York during the holidays is one of the most unique events and opportunities in the Industry. This year’s weekend will sell out even earlier than in past years.” In addition to saving $200 by registering by July 31st, registration is on a “first come, first serve” basis due to limited capacity. To ensure participation, guests are en- couraged to sign up early. Request a registration form by e-mailing registration@icpfbox.org or by visiting at www. careersincorrugated.org to download the form. The International Corrugated Packaging Foundation (ICPF) is a non-profit education foundation that is largely funded by its corporate partners, individual manufacturing and supplier companies in the corrugated packaging in- dustry. ICPF’s mission is to generate a stream of increas- ingly qualified students to enter the corrugated packaging and displays industry.
Our Story is Much Bigger Than The Symbol.
Corrugated Supplies Corp. LLC Rick Van Horne Director of Creative Marketing srvan614@me.com www.corrugatedsuppliescompany.com
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Kolbus Hycorr understands that quality is a reflection of the great care that takes place throughout the entire manufacturing process. From the time we pour the first casting until the equipment is prepared for shipment, our manufacturing team owns every step to maintain strict quality control. Our customers can rest easy knowing that their equipment has been built with great attention to detail. FOCUS ON QUALITY
KOLBUS America Inc. 216-931-5100 sales@kolbus.com
Articles On The Demand For Corrugated Disregard The Importance Of Sustainability BY RACHEL KAGAN Over the last few months, there have been several articles about the in- creased demand for containerboard and corrugated cardboard boxes, due to the surge in online shopping during the pandemic.
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There was the Wall Street Journal’s “Card- board Boxes Have Never Been in More De- mand—or More Expensive” (March 30), FOX Business’ “Cardboard box prices skyrocket as COVID-19 pandemic causes spike in online or- ders” (April 8), and Business Insider’s “A surge in cardboard demand is causing a supply squeeze for box makers amid the online-shop-
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Rachel Kagan
ping boom” (May 20), to name a few. These articles were primarily about the impacts of the increased de- mand on paperboard manufacturing businesses, including rising prices and shipment delays of raw materials. And yet they barely mentioned the environmental attributes of containerboard and corrugated boxes, or the critical role that recycling plays in the sustainability of the paper packag- ing industry. Or even worse, provided misinformed comments about the industry. It was not until the very end of the Business Insider article that recycling was even mentioned: Terry Webber, Executive Director of packaging at the American For- est & Paper Association (AF&PA), said in a statement that “containerboard production in March increased nine percent compared to March 2020,” when the pandemic hit the U.S. The AF&PA also mentioned that boxes are the most recycled packaging in the U.S., which can help keep the supply chain sustainable for both retailers and customers. And while the Wall Street Journal article was accompanied by a link to a 2019 video, “Where Your Old E-Commerce Boxes End Up” (about card- board recycling), the focus of the article was about how the production of corrugated product increased 3.4 percent to 407 billion square-feet in the U.S. in 2020, with the price of containerboard increasing by $50 to an average $765/ton, with only one mention related to recycling: At a recent investor conference, Waste Management Inc. Chief Execu- tive Jim Fish said more e-commerce could boost the waste hauler’s recy- cling business, which collects cardboard curbside and sells it to be pulped anew for more boxes. Unfortunately, neither of these articles provided any additional context to explain the importance of why recycling helps keep the supply chain – and the industry – environmentally sustainable. The Paper & Paberboard Packaging Environmental Council (PPEC) is proud of our industry’s circular economy approach to managing paper packaging products, which are continually collected and recycled through residential and business recycling programs across Canada, allowing them to be remade into new paper packaging. Some key statistics: • 94 percent of Canadians have access to recycling • Canada recycles almost 70 percent of its paper and cardboard, making it among the top paper recycling countries in the world • The national recycling rate for corrugated boxes is estimated to be at least 85 percent CONTINUED ON PAGE 14
600 + Plants 60,000 Users North America Latin America
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Articles On Demand (CONT’D FROM PAGE 12)
Not only does recycling not get the airtime it rightly de- serves as part of this story, but FOX also makes comments about trees and paper products with no facts. If they had the facts, they would know that the sustainable manage- ment of forests is a key issue for the packaging industry. Even though most paper packaging made in Canada is high in recycled content, the paper fibres it was originally made from came from a tree. But by law, every hectare of commercial forest that is harvested in Canada must be successfully regenerated. On average, over 1,000 new tree seedlings are planted in Canada every minute. And all PPEC-member mills producing corrugated box material have independent, third-party certification that their paper fibre sources (whether wood chips and sawmill residues or recycled fibres) are responsibly sourced. When you add it up, the Canadian industry hardly uses freshly cut trees to make paper packaging, and the little that is harvested (0.2 percent in 2018) is successfully regenerated. While the media articles mentioned told the story about increased demand for corrugated cardboard boxes, they did not provide the full story of what happens to those box- es after they leave the manufacturing facility; they end up going to a customer, then a recycling bin, and eventually those recycled materials are remade into new paper pack- aging. And that continuous and sustainable loop deserves to be part of the story, with the facts to back it up, to help inform and educate the public. Rachel Kagan is the Executive Director of the PPEC.
• Ontario has a 98 percent recovery rate for corrugated cardboard • Most of the paper packaging material made by Canadi- an mills is 100 percent recycled content Not only are these materials recyclable, they are actu- ally being recycled – an important distinction illustrating that Canadians understand their role and do their part by actively recycling. This allows those recycled materials to be remade into new paper packaging, as evidenced by the high amount of recycled content used by mills. And it’s a similar story in the U.S., where 88.8 percent of cardboard and 65.7 percent of paper were recycled in 2020, according to the AF&PA, who reported that those rates remained unchanged during the pandemic, calling that “a testament to the resilience of the paper and wood products industry.” But it was FOX Business’ article that made no mention of the environment, except in a video clip that accompa- nied the story. In the 3-minute clip, FOX reporter Jeff Flock interviewed Andy Reigh of Welch Packaging, a corrugated box manufacturer located in Elkart, Indiana. Two minutes into the video, Flock makes a comment about “trees,” and then when he throws it back to the FOX newsroom, host Stuart Varney said “I thought all this stuff was recycled,” and you can barely hear Flock say that most of it is recy- cled.
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Manufacturing, Economy Grow Again In May: ISM
cent, a decrease of 4 percentage points compared to the April reading of 62.5 percent. The Backlog of Orders In- dex registered 70.6 percent, 2.4 percentage points higher compared to the April reading of 68.2 percent. The Em- ployment Index registered 50.9 percent; 4.2 percentage points lower than the April reading of 55.1 percent. The Supplier Deliveries Index registered 78.8 percent, up 3.8 percentage points from the April figure of 75 percent. “The Inventories Index registered 50.8 percent, 4.3 percentage points higher than the April reading of 46.5 percent. The Prices Index registered 88 percent, down 1.6 percentage points compared to the April reading of 89.6 percent. The New Export Orders Index registered 55.4 percent, an increase of 0.5 percentage point compared to the April reading of 54.9 percent. The Imports Index regis- tered 54 percent, a 1.8-percentage point increase from the April reading of 52.2 percent.” “The manufacturing economy continued expansion in
Economic activity in the manufacturing sector grew in May, with the overall economy notching a 12th consecutive month of growth, say the nation’s supply executives in the latest Manufacturing ISM Report On Business. The report was issued last week by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Manage- ment (ISM) Manufacturing Business Survey Committee: “The May Manufacturing PMI® registered 61.2 percent, an increase of 0.5 percentage point from the April reading of 60.7 percent. This figure indicates expansion in the over- all economy for the 12th month in a row after contraction in April 2020. The New Orders Index registered 67 percent, increasing 2.7 percentage points from the April reading of 64.3 percent. The Production Index registered 58.5 per-
May. Business Survey Committee panelists reported that their companies and suppliers continue to struggle to meet increasing lev- els of demand. Record-long lead times, wide- scale shortages of critical basic materials, rising commodities prices and difficulties in transporting products are continuing to affect all segments of the manufacturing economy. Worker absenteeism, short-term shutdowns due to part shortages, and difficulties in filling open positions continue to be issues that lim- it manufacturing-growth potential. “Optimistic panel sentiment increased, with 36 positive comments for every cautious comment, compared to an 11-to-1 ratio in April. Demand expanded, with the (1) New Orders Index growing at a strong level, supported by the New Export Orders Index continuing to expand, (2) Customers’ Inventories Index hitting another all-time low and (3) Backlog of Orders Index continuing at a record-high level. Consumption (measured by the Pro- duction and Employment indexes) indicated slowing expansion, posting a combined 8.2 percentage point decrease to the Manufac- turing PMI calculation. “The Employment Index expanded for the sixth straight month, but panelists continue to note significant difficulties in attracting and retaining labor at their companies’ and suppliers’ facilities. Consumption was clearly limited due to labor issues and supply con- straints as demand remains very high. Inputs — expressed as supplier deliveries, inven- tories, and imports — continued to support input-driven constraints to production expan- sion, at higher rates compared to April, due to continued trouble in supplier deliveries.
DESIGNS THAT INCREASE PRODUCTION
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Manufacturing, Economy (CONT’D FROM PAGE 16)
tronic Products; Electrical Equipment, Appliances & Com- ponents; Fabricated Metal Products; Food, Beverage & Tobacco Products; Machinery; Chemical Products; Miscel- laneous Manufacturing; Transportation Equipment; Wood Products; Paper Products; and Petroleum & Coal Products. The only industry reporting contraction in May is Printing & Related Support Activities. Registration Open For AICC Midwest Region Golf Tournament Registration is now open for the AICC Midwest Region Golf Tournament, being held on Monday, July 19, 2021, at the St. Charles Country Club in St. Charles, Illinois. A plant tour of Pamarco’s Batavia facility will also take place, from 7:00 a.m. to 11:00 a.m. before the golf tourna- ment. Pamarco has in-depth knowledge of the flexo, off- set, coating and laminating, corrugating, embossing, gra- vure and industrial markets. The Midwest Region Board is also happy to share that it will be resuming the full scholarship program and awarding two $5,000 scholarships. The winners will be announced and presented with the awards at the golf event. For more information on the scholarship and to obtain an application, contact Tim Engle at engle@baysek.com or (715) 496-0253 or Shari Saeger at ssaeger@inspireauto- mation.com or (715) 204-0288.
Inputs positively contributed to the PMI® calculation, by a combined 8.1 percentage points. Importation of items slightly improved in the period. (The Inventories and Sup- plier Deliveries indexes directly factor into the PMI®; the Imports Index does not.) The Prices Index expanded for the 12th consecutive month, indicating continued supplier pricing power and scarcity of supply chain goods. “All of the six biggest manufacturing industries — Com- puter & Electronic Products; Fabricated Metal Products; Food, Beverage & Tobacco Products; Chemical Products; Transportation Equipment; and Petroleum & Coal Products — registered moderate to strong growth in May. “Manufacturing performed well for the 12th straight month, with demand, consumption and inputs registering strong growth compared to April. Panelists companies and their supply chains continue to struggle to respond to strong demand due to the difficulty in hiring and retain- ing direct labor. Record backlog, customer inventories and raw material lead times are being reported. The manu- facturing recovery has transitioned from first addressing demand headwinds, to now overcoming labor obstacles across the entire value chain,” says Fiore. Sixteen of 18 manufacturing industries reported growth in May, in the following order: Furniture & Related Prod- ucts; Nonmetallic Mineral Products; Plastics & Rubber Products; Textile Mills; Primary Metals; Computer & Elec-
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MHIA Names Phillips Senior VP, Service And Operations For NA The Corrugating Machinery Division of Mitsubishi Heavy Industries America, a leading supplier of corrugating and
In his new role, Phillips will be leading operations in the Service, Spare Parts, Warehouse Operation and Engineer- ing businesses. “I am looking forward to overseeing the next generation of service and technology to build on Mitsubishi Heavy In- dustries America’s role as the number one service provid- er in the corrugated business,” said Phillips. “My plan is to continue to serve the company and help it deliver on its promise to support our customers with the highest quality machinery and service as the corrugating industry emerg- es from the COVID-19 pandemic.” After graduating the Control Data Institute and attend- ing Rochester Institute of Technology (RIT), Phillips started his career with Langston Corrugated as a Field Engineer, installing and servicing corrugated machinery. “We are thrilled with Darrold’s nomination as Senior Vice President, Service and Operations,” said Shoji Isoai, President, MHIA Corrugating Machinery Division. “His
box-making machinery, has an- nounced the assignment of Dar- rold Phillips as its new Senior VP, Service and Operations for North America, effective June 1. Phillips joined Mitsubishi in
2002 as a Field Service Engi- neer. In his nearly two decades with the company, he has served as a Customer Service Engineer, Manager and Director of Customer Service, and, since 2019, the Vice President, Service. Darrold Phillips
knowledge of our business, and the trust he has earned among our customers, make him the perfect match as we continue to support the growth of the corrugated industry.” TAPPI Announces 2021 Scholarship Winners TAPPI recently announced the winners of the 2021 Paper and Board Division scholarships. Each year, TAPPI awards over $50,000 in scholarships to graduate and undergraduate students in the pulp, paper, packaging and re- lated industries. Scholarship winners included: Cheyanne King, winner of the Process and Product Quality Division John Walkinshaw Scholarship; Rachel Johnson, winner of the Process and Product Quality Division John Walkinshaw Scholarship; Lauren Cuddeback, winner of the Coating and Graphic Arts Division Robert W. Hagemeyer Scholarship; Jessica Tocco, winner of the Joe Dieffenbacher Engineering Memorial Schol- arship and Paper and Board Division Scholar- ship; William Cotter, winner of the Corrugated Packaging Division Mitsubishi Heavy Indus- tries Scholarship; Isabelle Ownby, winner of the John O. Telesca Engineering Scholarship; Bailey Feeney, winner of the Process Control Division Scholarship; D’Kayla Thomas, winner of the Environmental Division Douglas Barton Memorial Scholarship; Ronald “Iggy” Senchak, winner of the Paper and Board Division Schol- arship; and Alex Boyd, winner of the Process Control Division Scholarship. Visit www.tappi.org for more information and to download an application for furture scholarship opportunities.
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WestRock Announces Chalovich Retirement, Other Appointments Atlanta, Georgia based WestRock last week announced the future retirement of Jeff Chalovich, President of Corru- gated Packaging and Chief Commercial Officer, after a 23- year career with WestRock. Moving forward, WestRock has also announced an evolution of its commercial and opera- tional leadership structure and team reporting to president and chief executive officer, David B. Sewell. Jeff Chalovich has made substantial contributions to both WestRock and the paper and packaging industry.
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During his career, Jeff has held various management and lead- ership roles in the company’s commercial, containerboard and corrugated packaging busi- nesses. He will retire from West- Rock in August 2021. “Jeff is well respected across the industry as an expert in cor- rugated packaging, and he has
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led the commercial and corrugated team incredibly well during his time with our Company,” said Sewell. “As a member of our leadership team, Jeff has led the develop- ment of our commercial organization and set the strategic and operational foundation for our corrugated packaging business. I and the rest of the WestRock team wish Jeff the very best in retirement.” In addition, the Company announced a new commer- cial and operational leadership structure aligned with We- stRock’s goals of leveraging the power of the enterprise, accelerating innovation and leading in sustainability. This new structure will enhance market alignment, enable greater agility and deliver stronger efficiencies. “This structure aligns with the focus I have highlighted on enhancing our commercial strategy, operational excel- lence and productivity across the enterprise, which are all important levers to meet and exceed the needs of our customers by delivering differentiated solutions that will accelerate profitable growth, “ said Sewell. “I am confident the changes we are making will further strengthen our Company and create value for our shareholders.” Additionally, WestRock announced the following: • Patrick (Pat) Lindner is assuming the role of President, Commercial, Innovation and Sustainability. He will be responsible for leading the company’s strategy, mar- keting, innovation, sustainability, enterprise commer- cial operations and machinery business. Bringing these functions together will accelerate the company’s efforts at bringing solutions to its customers. • Patrick Kivits is assuming the role of President, Con- sumer Packaging. This business includes folding car- tons and specialty packaging in the branded consumer, healthcare and food and beverage businesses.
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WestRock Announces (CONT’D FROM PAGE 22)
Buy-Sell Agreements (CONT’D FROM PAGE 1 )
• Pete Durette is assuming the role of President, Corru- gated Packaging, leading the converting sales and op- erations for the corrugated box business. • John O’Neal is assuming the role of President, Global Paper. This new organization combines the sales and commercial operations of the Consumer and Corrugat- ed paperboard and containerboard businesses. • Tom Stigers is now responsible for the operations of all WestRock mills in the role of President, Mill Operations. By combining the Consumer and Corrugated mill oper- ations in one organization, WestRock will drive greater efficiency and effectiveness across the mill network.
organization’s survival. In this case, the document required performance-based assessments of the CEO’s mental competence. “A good buy-sell agreement can shelter a family busi- ness from costly disruptions caused by material events in- volving its owners,” says Sam Brownell, founder of Stratus Wealth Advisors in Kensington, MD ( stratuswealthadvi- sors.com ). “The right provisions can even keep company shares from falling into third party hands—an event that can damage the organization’s profitability or even threat- en its survival.” Out Of The Blue Family business crises are noted for their unpredictabil- ity. Here are just a few examples of some other “trigger events” that can put the bottom line at risk: Divorce: A family member’s divorce settlement grants the ex-spouse a batch of company shares--and a measure of unwelcome control over business decisions. The busi- ness faces a costly forced valuation and a search for cash to recapture stock. “When a member of a family business sues for divorce, very often the spouse’s attorney will try to attach compa- ny stock,” says John R. McAlister II, Vice President of The Beringer Group, Radnor, Pa., a family business consultancy ( theberingergroup.com ). “It might also come to light that
ARC Int’l Appoints DeGaetano Midwest Technical Sales Rep
Charlotte, North Carolina based ARC International has appointed Mike DeGaetano Midwest Technical Sales Representative. Degaetano comes to ARC with extensive experience in the packaging and printing manufacturing industry, and will be based in Aurora, Illinois. “We are fortunate to have Mike on board with ARC. His experience and understanding of converting operations will certainly benefit our customers in the Midwest region, as well,” said ARC President & CEO, Micheal Foran.
CONTINUED ON PAGE 26
Do you need printed sheets? We have your answer.. Introducing Heartland’s ColorCorr. This is “flexo-printing in the round”. On our corrugator we can print up to 109” wide. The advantage is that we can print the equivalent of ½ roll at a time and not be required to keep several rolls of very expensive preprinted paper on the floor. Much less waste and risk. In continual print mode, we use either laser-engraved rubber rolls or solid rubber rolls to print a “flood coat” or a repeating pattern. If we are printing a repeating pattern, we can run a two-color design on the paper. Customers have found that running sheets we print can allow them to run a lighter-grade due to reduced caliper loss, and in some cases eliminate one or more machine passes.
For more information contact: Charlie Freeman | 816-500-8889 | cfreeman@heartlandsheets.com Tim Kramer | 816-841-8317 | color@heartlandsheets.com
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Buy-Sell Agreements (CONT’D FROM PAGE 24)
BCN
says,
the spouse had been gifted some stock during the mar- riage.” Personal Bankruptcy: A family member with a large por- tion of the company stock runs up excessive credit card debt. When the creditors start to eye his shares as part of a bankruptcy settlement, the business risks losing substan- tial operational control to outside parties. Minority Shareholders: Over the years the business has granted so many corporate shares to children and grand- children that passive shareholders now burden operations. “Problems can arise when people inactive in the business must be consulted to one degree or another about key management decisions,” says Richard R. Spore, an attor- ney with Memphis-based Bass, Berry & Sims ( bassberry. com ). “Passive owners often resist shouldering the risks of change and can have conflicts of interest with those run- ning the enterprise.” Underperforming Personnel: A second-generation fam- ily member who recently joined the company has under- performed to the extent that she must be terminated. The organization risks losing control of her stock. Valuing The Stock Any of the above events, and others like them, can cre- ate hard feelings among family members. They can also disrupt business operations and even result in the loss of managerial control to third parties unless a carefully word- ed buy-sell agreement has set forth appropriate proce- dures. Because most solutions to ownership crises require the recapture or transfer of company stock, any success- ful buy-sell agreement must first specify how corporate shares will be valued. Setting a reasonable price can be difficult, though, when people on either side of the nego- tiating table push for assessment formulas that favor their interests. Those relinquishing stock will naturally seek the highest value possible. The challenge can be especially great when individu- als expect the value of their holdings to be equivalent to publicly traded corporations. “Any business’s selling price will typically be less if the transition is with family members rather than third-party buyers,” says Brownell. “One reason is that external buyers who already have human resourc- es, accounting, legal, and other support departments will not need the redundant ones in a purchased enterprise. That makes the remaining parts of the business more valuable. In contrast, a next generation buyer will need to retain those support departments. The fact that there is more expense involved in keeping them reduces the value of the purchased organization.” The more expansive blend of interests characteristic of a family operation can also create confusion about value, says Brownell. Negotiations will need to aim for a price that represents a win for outgoing and incoming family members, while also leaving sufficient reserves to sustain
to the sponsors of our 2021 calendar!
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Please visit www.nvpublications.com to view the 2021 industry events and links to our sponsors’ websites where you can learn more about their products and services.
CONTINUED ON PAGE 28
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