Lilke their colleagues in the business, paper manufacturers have had to cope with the volatile economy of the past few years. They have made their adjustments and are now responding to publishers' need for faster speed to market, with innovative programs and B2B portals for customers, improved papers and a wider range of available product.
Glatfelter, founded in 1864, is not only the oldest paper company PW interviewed, but the largest supplier of book paper, manufacturing everything from lightweight to professional paper. The company posted revenues of $636 million last year, with over 50% generated by books. It is also a major supplier of tea bags worldwide. You'll find Glatfelter papers in products ranging from surgical gowns to Victoria's Secret shopping bags to United We Stand postage stamps.
Responding to the need for greater speed and the trend toward smaller print runs, Glatfelter recently introduced several innovations. First, it streamlined its discount schedule two years ago. It used to be that if a company ordered any amount less than a truckload, it had to pay a premium. Now, a purchase of 10,000 pounds or more goes out at the truckload price. Second, Glatfelter rolled out a managed inventory program (GMI) to boost turnaround. It picked some workhorse grades of paper, put the inventory on the warehouse floor and let publishers know the inventory was available for quick turnaround, without any additional investment on the publishers' part. How quick is quick? "If you call us by 10 a.m. with an order for one of these grades, you'll get delivery tomorrow," says Mark Pitts, corporate director, printing and converting papers, for Glatfelter.
Glatfelter also introduced myglatfelter.com in March 2001, which enables customers to check order status, arrival of order and even who signed for the shipment. "This B2B Web site has a lot of functionality, and we've gone into four different versions already," says Pitts. "It's completely back-end integrated, so you're working in real time, not just working with a not a glorified e-mail system."
Also new is a paper Glatfelter recently created for digital delivery—DigiBOOK. This paper looks like a traditional paper, but can withstand the high temperature of POD machines, can accept toner, won't curl and will create a dot that is stable. "The POD market is an emerging niche, but hasn't gotten a lot of traction yet. This is a high-quality paper designed to overcome traditional objections," explains Pitts.
MeadWestvaco, formed by the merger of two midsize paper companies in 2001 in a $3-billion deal, is dominant in the educational market, with more than 50% of the market in elhi textbooks and a little less on the college level. Altogether, it has about 45%—50% of the educational market, the company estimates, and much less on the commercial level.
In recent years, MeadWestvaco has taken the same roller-coaster ride as the rest of the business. Things were pretty good in 1999, recalls Tom Gallagher, v-p, printing sales, for the company, as some publishers pushed business ahead to avoid any potential Y2K problems. And 2000 was a good year, with a fair amount of adoptions, but then 2001, originally expected to be to be a decent adoption year, turned into a weak year, as state budgets were cut back. So far this year, the hoped-for bounceback hasn't happened.
In terms of publishing trends, Gallagher pointed to the conscious effort on the part of book publishers to reduce inventories, with the consequence of shorter runs and faster reprints. Any impact from electronics? "You wonder if there's any impact from electronics and electronic substitutions," admits Gallagher. "If so, it would start on the college level. It's been a watch-out for us, but we haven't been able to tell yet."
On the technical side, MeadWestvaco continues to improve its product with better receptivity to ink. It is also developing its Web site for use as a business portal for customers. Currently there's a pilot program, with one customer using the site for order placement and order tracking. "If printers want to go there, we'll be ready," says Gallagher.
Permalin Products, founded in 1948 by Henry Shapiro and now run by third-generation Alan Shapiro, is one of the largest suppliers to the book business of cover and endleaf products. Though its products are also used for journals, binders, game boards and wallpaper swatch books, most of the products are used in books. Permalin offers a broad range of paper, from whites and colors and latex in every weight and color to imported specialty products like coagulated urethane, which gives the product a "nice rich look," says Shapiro. Two years ago, Permalin expanded its offerings by buying Schwartz Leather, one of the premier leather suppliers in the country; it is also offering more in the way of reinforcing materials.
"Speed to market, ever quicker turnaround time and shorter runs" are the main publishing trends Shapiro has observed. Ten years ago, a standard turnaround for Permalin from order to shipment was seven days; five years ago, it was down to three to four days,; and now, it's one to two days, or same-day shipping. To satisfy the need for speed, Permalin keeps three million pounds of inventory on hand, including sheeting and trimming for almost any size. Generally, explains Shapiro, the order comes to them from the manufacturer, who is told by the publisher what to order. Some publishers call Permalin directly for advice with unfamiliar materials.
Boise Paper Solutions
Despite Boise Cascade's preeminence in the world of paper, this Fortune 500 company is relatively new in publishing, having entered the market in January 1999. Overall, the entry has gone fairly well, says Nancy Artz, Boise Paper Solutions' new marketing manager for book publishing. It, too, experienced the highs of the 2000 market and the lows of 2001; this year continues to be pretty flat.
Asked about future industry developments, Artz drew on her own experience with a small religion publisher in Colorado and her two months with Boise Paper Solutions. "Everyone is waiting to see what happens with print-on-demand," she says. "Publishers keep looking at it to see how it can fit in and how it can help them." For its part, Boise Paper Solutions is actively looking to develop papers that will work well with the new POD technology.