A Tissue World report
With a strong influence in the development of private label tissue in the western USA, TW visited the company’s north Las Vegas site to find out how its success in the west is influencing its plans in the east.
People ask me how we can make tissue in the desert”, says Clearwater Paper’s Gary Blosl, plant manager of the company’s north Las Vegas site. “Where does the water come from when you are surrounded by desert, and where is the demand for these products coming from? But access to materials and the demand here is really good. So it’s a very flexible environment for us and it provides plenty of opportunities.”
The site manufactures toweling, bath and facial tissue, napkins and – early next year– TAD bath tissue. Clearwater Paper started converting there in 1993, while paper production started on a Toscotec-supplied paper machine in 2004. There is also a fourcolour printing process that enables the company to print on demand and have the majority of its production process under one roof, which Blosl says is “very efficient and flexible”.
The company’s tissue business’ main focus remains in the grocery sector – Blosl says that Clearwater Paper is considered the largest private label supplier to US grocers. Each of its sites primarily service customers within a 500 mile radius of the manufacturing and distribution facility. Las Vegas supports customer needs throughout the south western US. With TAD bathroom tissue production expected to be up and running by the beginning of next year, the company has continued to steadily progress and grow. “There have been opportunities in our marketplace that have required us to invest in order to continue our steady growth, such as TAD bath,” Blosl adds.
Clearwater Paper is at the forefront, expanding on its tradition of developing private label tissue in the west. Spun off from Potlatch Corporation in late 2008, the company’s consumer products segment is a premium supplier of private label tissue to major retail channels in the U.S.
The full breadth of the consumer products operations include production of private label tissue, AfH tissue and specialty and hard roll tissue, and while its main sector is the grocery market, it also has a presence in the mass, drug, dollar and alternative discount channels.
In 2011, including its pulp and paperboard operations, net sales reached $1.9 bn.Its tissue technology includes TAD and conventional paper making.
Clearwater Paper manufactures tissue products using primarily virgin fibre produced from internal pulp as well as from purchased market pulp. The company also has a dedicated recycled fibre facility that produces recycled content paper for value and green product segments.
But while the company is looking to increase its presence in the bath tissue specialty market, its primary focus will remain in the private label market. “We aim to be the leading national private label supplier of quality tissue products,” Bruce Woodlief, director of marketing for Clearwater Paper says. “There is significant opportunity there. Private label growth in the American tissue market has been steady.”
Despite the somewhat saturated marketplace of areas such as the western American market, there doesn’t appear to have been much of a drop in tissue volume during the recession. What has occurred, as both TW’s visits to tissue producers in the area show, is that there has been a further shift in demand.
More and more consumers are now requiring private label brands as an alternative to more expensive branded products. Western USA, of course, remains a leader on the world tissue stage, with a number of tissue mills owned by other major players such as SCA, Georgia-Pacific, Kimberly-Clark and Procter & Gamble. And across North America, while no return to high growth rates is expected in the tissue market, average growth is expected to remain at 1.4% per year over the next decade.
As for Clearwater Paper, the company acquired Cellu Tissue Holdings, an Alpharetta, GA-based integrated manufacturer of tissue products, for $502m in December 2010. The decision allowed an expansion of Clearwater Paper’s tissue manufacturing footprint: whilst it had a national sales footprint, the move meant it then had a national manufacturing presence that boosted its existing private label grocery customers whilst also expanding into other private label channels of trade (Cellu Tissue had 10 sites based in the midwest, eastern USA and Canada, compared with Clearwater’s Paper’s two tissue facilities in the west and one in the midwest). The acquisition also increased Clearwater Paper’s through-air-dried (TAD) capacity.
Woodlief says that Clearwater Paper leads the western US with more than 95% share of private label tissue sold in the grocery food channel. He says: “The west also enjoys a higher tissue category share in private label. It is significantly lower in the midwest and eastern regions of the US. Clearwater Paper sees an opportunity for applying its recipe for success in the west to these eastern US regions.”
Clearwater Paper has a new TAD tissue machine that is now in the process of being constructed at its Shelby, North Carolina, facility, which currently has active converting capacity. The new 5.1m wide TAD machine will mean that, among other things, Clearwater Paper increases its ultra quality offerings to existing and new southern and east coast customers. In the company’s recent 2011 results released in February, chief executive and chairman Gordon Jones said the investment remains “on budget and on schedule for start-up in December 2012.”
The success experienced in the west has provided something of a blueprint for the company’s plans in the east, Blosl says. “Despite the difference in the west to the east, Clearwater Paper will look to take a successful operation from one to the other.” The goal, in both regions, is to produce “the best private label TAD towel and bath tissue product” for the US market. “Our target is to be national brand comparable so our customers have high quality product offerings.”
The company has drastically strengthened its presence across America. “Our strength was in the west, but our capabilities are huge now,” adds Woodlief. “We have modernised and we are sized very well. We are now looking at efficient expansion rather than just expansion. And in the US market, there is certainly room for further growth.”
CLEARWATER PAPER NORTH LAS VEGAS SITE FACTFILE
Staff – 225
Mill manager – Gary Blosl
Products – Bath tissue, facial tissue, towel, napkin
Paper machine – One
Converting – Six lines
Formed – 1993 converting, 2004 paper manufacture
Markets – Southwestern US States
Business operations – Private label tissue
Certifications – FSC for premium and ultra bath and facial tissue,