Strategies And Tactics (CONT’D FROM PAGE 28)
Board Converting NEWS INTERNET DIRECTORY
quently omit in their due diligence are the strong relation- ships, adaptabilities, and capabilities of the competitors’ corrugator plants, their value propositions, the goodwill they earned over time, etc. How can new corrugator plants with 80 percent com- modity products with low pricing and reasonable profit margins, justify major capital expenditures in a desert state like Arizona? Our COGS (Cost of Goods Sold) for all five of our box plants is around 80 percent of sales west of the Rocky Mountains, while it averages around 65 percent or less the east of the Rockies. Due to mini mills’ influence, there is almost no standard 42-pound kraft linerboard sold in Ar- izona. In contrast, box makers use lighter recycled 32 or 28 ECT corrugated sheets to reduce material cost. Furthermore, in popular tourist and retirement destina- tion Arizona, how does a state-of- the-art $20 million-dol- lar turnkey corrugator budget plus converting machines, big building, etc., justify a break-even with thirty-five mil- lion square feet of sales and shareholder value? Arizona has a growing six million population, with new semi-conductor high tech industrial volume and little val- ue-added containerboard products. So, the promise of maquiladora sales near the Mexico-U.S. border draws in Arizona box suppliers. Time and again we have seen competitors attempt to beat our laser-focused performance of JIT (Just in Time) services with the same old tactic. How? They acquire a costly, air-conditioned semi-smart warehouse, where they hope to carry bulk inventory of one to three months of the customer’s finished goods and compete with our proven quality, no warp JIT orders, technology, and corporate cul- ture. From the experiences of our 300,000 square-foot two modern manufacturing facilities in Arizona, poor invento- ry control brings on a swan song for dubious long-term profits. Our solution is Just-In-Time, not Just-In-Case de- liveries. Undercutting our exceptional capabilities with ware- housing and trying to beat our ever-improving corporate culture will be worrisome aspects of a new vertical inte- grated competitor. “Corrugated boxes are like ice. The lon- ger you have them, the more likely their value disappears.” Other box making challenges faced in growing Arizona include navigating on-time contract deliveries with more than a dozen brokers/distributors, freight forwarders, in- tense weather changes, lower stacking and box strength, few markets, more obsolescence or unpaid aged inven- tory, scarcity of local supply chains, less skilled labor, and battle-tested competition. Lesson Learned From A Parable As long as cheap capital is available, the sharks will feed. Even a gathering storm won’t necessarily stop deals; rates are just a cost factor. | CONTINUED ON PAGE 32
CORRUGATED REPLACEMENTS, INC. www.corrugatedparts.com
Corrugated Replacements, Inc. is a production powerhouse that manufactures high quality machine parts and replace- ment parts for the corrugated and paperboard converting industries. CRI can redesign, engineer, and manufacture any part while providing a rapid turn-around rate, keeping machines running at their peak performance and limiting down time.
C.U.E., INC. www.AnvilCovers.com
Makers of single and dual-width Timesaver® Anvil Covers, the premier urethane anvil cover for corrugated die cutting. Timesaver® covers feature construction of solid steel back- ing and solid steel locking components to ensure a precise fit every time. C.U.E., Inc. also offers Dura-Latch and Cor- Lock anvil covers, and urethane Lead Edge Feed Wheels.
EMBA www.embausa.com
The EMBA group supports a complete line of corrugated converting machinery for the worldwide market. EMBA’s Quick Set technology enables the highest productivity across a broad range of converting equipment, from mini to super jumbo. EMBA also includes the McKinley jumbo line of flexo folder gluers and rotary die cutters as well as ser- vice, rebuilds and upgrades for both EMBA and McKinley.
EAGLEWOOD TECHNOLOGIES, LLC www.eaglewoodtech.com
Eaglewood Technologies offers trusted cleaning technolo- gies for the world’s best printers and converters. Solutions include the award winning Sitexco+ Anilox Laser System, the Nanovis Parts Washing System, the Sitexco L10 Label System, the innovative Sanilox™ System or Alphasonics solutions. We also offer Xpress™ mobile cleaning service at your facility or ours. ESKO www.esko.com ArtiosCAD and Kongsberg are the most trusted names in CAD/CAM solutions. Esko’s ArtiosCAD is the most widely used CAD software in the world. Esko’s Kongsberg series of tables brings you reliable, outstanding quality for sample- making and short run production.
DOMINO www.dominodigitalprinting.com
Domino is a leading manufacturer and distributor of digital printing and product identification solutions. Celebrating its 44th year, Domino is headquartered in the UK and North America headquarters are Illinois. Domino has 25 subsid- iaries, representation in over 120 countries, and over 2,900 employees worldwide .
www.boardconvertingnews.com
30
October 7, 2024
Made with FlippingBook Annual report maker