It befits a tissue business which sits within sight of Mount Olympus, mythical home of the gods of classical antiquity, that its origins should make a good story on their own. Meimari Kountouraki Tissue
Converting, trading under the brand Softcare in Lakkoma - around half
an hour's drive from Thessaloniki - began life through an act of friendship
- not so surprising in this country. Since then, the company has identified
that most precious of business jewels: a niche. It has exploited this through
investment in a high capacity converting line, which has now been running
for just over a year.
Brothers Evripidis and Christos Kountourakis, respectively general
manager and president/CEO of Meimari Kountouraki, started out on the
tissue road when they helped out a friend with a small converting company
who had gone bankrupt. He persuaded them to build a converting business
themselves, which they ran from their friend's former city premises from
2001 for nearly three years. The brothers built up a private label business,
invested in two Omet napkin machines with Multipack wrapping machines,
and handled all their own distribution. From the start, however, they always
had in mind the need for more space for a complete plant.
The niche which Evripidis and Christos identified was for jumbo kitchen
rolls. This format was traditionally seen as for away-from-home markets,
but the brothers Kountourakis saw its potential as a private label product
for supermarkets.
SUPER MARKETS LIKED IT
It was not long before six supermarkets had taken to the idea. Of
course each customer wanted its own identity for the product and this,
combined with significant volumes, started to put this fledgling business
under strain. To begin with Meimari Kountouraki was importing finished
product from Italy to satisfy demand, but this was never a long-term
solution.
From a crowded inner city works, Meimari Kountouraki made a bid
for freedom, helped by some fiscal incentives to set up enterprises out of
town. In 2005, the brand new plant began to take shape. Thus, at the end
of a bumpy, dusty track, visitors arrive at an impeccable 8000 m2 plant,
glinting in the sunshine. A beacon of modern enterprise surrounded by
fields, with the sea and Zeus's mountainous home in the background, the
factory provides employment for 33 local people.
SOMETHING DIFFERENT
When it came to choosing a converting line, Evripidis and Christos
knew they had to follow a different path from their competitors in Greece.
There were too many similar lines and Meimari Kountouraki sought
differentiation. "White tissue sold very well, but we thought we could do
something better through innovation," says Christos. "We were aware that
the Futura line and its embossing system would allow us to have different
patterns from the competition. The possibility to use coloured embossing
to create a more eye-catching product was also very appealing. The market
is very competitive in Greece and product is at a high level. We had to do
something different and raise quality standards even higher."
Greece is a challenging market in which to operate. While there is
clearly an opportunity to increase per capita tissue use, the population is
a mere 12 million, and it is not surrounded by wealthy neighbours to which
it can export. There are opportunities in the Balkans, but hardly a gold
mine. So Meimari Kountouraki took the approach of building market share
by doing things differently.
Meimari Kountouraki's success in following its chosen path meant a
new line was badly needed. All the kitchen towel product the company
sold had to be imported, and this represented 40% of the business.
Shortly before the Kountourakis brothers were due to specify a converting
line, Spiros Panagiotidis, a well-known and respected doyen of the tissue
industry, based in Athens, started to represent Futura in Greece. Futura
was a relative newcomer at the time and was associated with bigger
machines. The Kountourakis brothers' instinct was also that they would
be too expensive.
Spiros believed otherwise, and he sat down with the brothers and
Futura's Carlo Berti to see what could be done. "We gave them a shopping
list of what we needed," says Evripidis. "We were specific about the
number of channels of course and, with slightly different needs for each
customer, we could only afford a short time between changes. So we
needed a high-level machine but not at very high-level cost. I think we
helped Futura to develop their philosophy of building more flexible
machines."
THE LINE THEY WANTED
Proof that Meimari Kountouraki got what it wanted is in the form of
a Futura converting line which started up in January 2008. It features
complete unwind section, flexible embossing/laminating with nested
technology, the innovative Futura log making system , accumulator, and
cutting system including trim cutter, log loader and log saw. "Going with
Futura seemed like a risk at the time," says Christos, "but we trusted the
people and believed in the name of Fabio Perini who we knew was behind
Futura. They promised their support and they were true to that promise."
The Futura line now produces 75% kitchen towel and 25% toilet tissue.
For toilet tissue, Meimari Kountouraki has started to introduce three and
four ply products using nested technology. Meimari Kountouraki uses
patterns on kitchen towel normally associated in Greece with toilet paper,
which has earned them new customers and strong sales growth. It can also
produce rolls in diameters from 100 mm to 260 mm diameter (ie from
toilet rolls up to jumbo kitchen rolls) all on the same machine. The line
runs at speeds between 450 and 550 m/min and pattern changeovers - very
fast and simple - are made by the operators themselves. Meimari Kountouraki
also runs a Microline towel packaging unit, toilet tissue is packaged on a
TMC line; and there is also an Omet napkin folder. "I believe we have the
best plant in Greece at the moment," says Evripidis.
Meimari Kountouraki is quietly building market share in Greece and
started to export to Romania and Bulgaria last year, direct to supermarkets.
As mentioned, this is not a major market, but average tissue use per capita
is increasing in the Balkans, so this is the right time for the company to
be making a name for itself.
A major opportunity is Aldi in Greece. Meimari Kountouraki sells its
2 x 400 g and 1 x 800 g kitchen roll units to Aldi's handful of stores in
Greece, but Aldi's target is 400 stores. "The potential is interesting," says
Christos, trying not to get too carried away. The fact that Aldi sells four
kitchen roll products in its Greek stores, and the two of these which come
from Meimari Kountouraki account between them for 70% of Aldi's kitchen
roll sales, suggests this is a rather successful partnership in the making.
The big achievement has been to raise the standard of private label in
Greece, and find a willing market for this new level of product.
TIME TO BUILD MARKET SHARE
As for the tough market
conditions which prevail to a greater
or lesser extent across the world,
Evripidis and Christos are
philosophical. Clearly not afraid of
commitment, both in terms of hours
worked, and their own finances, they
believe they have an opportunity.
Christos: "During the crisis, people
are buying less for sure, but there are
some small converters in Greece
which cannot compete, so while the
market contracts we can grow market
share. The crisis is not a matter of
prices. We need to offer good service
and the right product. When Italians>
speak about speed and volume we
now know what they mean. We are now convinced that a converting
company in Greece cannot compete
without the level of converting line
which we have. For our customers
it is a crucial fact that we have this
high level of technology."
The brothers plan to buy more room to house a second converting line, which is being considered for
2010. This would be dedicated to toilet paper, thus allowing the existing
line to be even more efficient, as it would be switched to 100% kitchen
towel. Evripidis also points out that they will
be able to run the machine themselves
practically from day one, implying that Futura
is likely to be the supplier again. "With the
first Futura, it was our first experience with
a complete automated line, so we needed
Futura's help for a while," he says. "We faced
challenges but Futura supported us. Since the
start-up, however, nobody has needed to attend
to the machine from outside. There is remote
diagnostics if we need it, of course, and any
software issues have always been solved online.
When Futura visits now we just drink
coffee!"
It will come as little surprise that
Christos' wife and brother-in-law are also
involved in the business. "The spirit in the
Mediterranean favours family businesses,"
says Christos, "and this means quick decisions
and flexibility. We are in a strong position to
face the crisis and increase sales. We are here for the long term. All profits
are reinvested in the business as well as the family's money, as finance is not necessarily easy to come by. We just need to keep innovating. We
have made our dream here." TW
