By Helen Morris, Senior Editor, Tissue World Magazine
Output is set to rise by 25% with a PM4 upgrade, even before adopting a new sales model could mean overhauling or replacing PM5 as the niche manufacturer targets key new markets. A TWM report.
MPI Paper Mills is based in Quebec, Canada. The company primarily supplies converters that focus on the AfH market, At-Home, consumer and private label markets. It supplies customers with white napkin in 1, 2, and 3-ply; natural napkin 1, 2, & 3-ply; multi ply coloured napkin, MF flat tissue for hygiene applications, MF flat tissue for waxing grade papers used in the food service segment and it has recently started to supply ply bonded napkin. Its paper mill has capacity to produce 24,000tpy and the company is in the midst of planning an upgrade to its PM4 which will increase its output by up to 25%.
In addition to its paper making, it has three other streams of business; a slitting and rewinding division, and it is also a contract manufacture for other converters and manufacturers alike with focus in the AfH market segment, and it has completed the installation of a sheeter and waxer enabling it to focus and sell food service papers to the distribution market focused on the restaurant and hospitality industry.
Here, MPI Paper Mills president Karim Jadavji talks to TWM about the company’s latest developments.
TWM/1: Is Canada seeing growth in its tissue market?
Jadavji: “Canada is a much smaller market than that of the United States or Europe. Here, you have smaller converters and larger fully-integrated manufacturers with not much in between. Canada’s market is largely dominated by three integrated tissue producers headquartered headquartered here and other major integrated manufacturers primarily from the United States focusing on select pieces of business that are aligned with their overall North American strategy. Some of them have manufacturing facilities in Canada while others only sales and distribution.
“Our growth is primarily coming from new markets. We are now servicing are now servicing our customers with coloured napkin paper, coloured napkin paper; with ply bonding application, with contract manufacturing services and with food service papers. We strive to become the Industry’s Premier Choice as their ‘Supply Chain Solution’. We continue to invest in and improve capabilities at our mill, which continues to open doors for us into new markets and we anticipate this will continue to drive our growth into the future.
“We have a firm belief that investing in our customers’ growth, through our service levels and product consistency will ultimately facilitate growth for us. Being a medium sized niche manufacturer which does not compete with our own customers places us in a unique position that allows us to help our customers grow and in turn, makes us poised for growth.”
TWM/2: Are you investing in any machinery/acquiring, do you have plans to grow and increase your capacity?
Jadavji: “We are planning on upgrading the dry-end of our PM4 which we estimate will increase our output up to 25%. We have identified potential suppliers and are moving through the selection process to identify which supplier we will ultimately partner with on this project. We have already identified our niche markets and have now reached the ceiling in terms of how many tonnes we can produce with our existing equipment. Our first phase is to improve the capacity of our PM4 and the second phase will be out a few years, but it will be to install a new paper machine in place of our PM5.
“In addition to investing in our paper making capacity, we are investing in our ability to contract manufacture a variety of products as well as begin our foray into food service papers to include: sheeting, printing, waxing and laminating services.
“We continue to invest in our people. Machinery can only take a company so far, in the end, we need to have people that strive to reach excellence, that are open to feedback and improvement and that aspire to help our customers succeed.”
TWM/3: What are your main opportunities in the next few years?
Jadavji: “The key opportunities lie in the new markets in which we have begun our foray, so for us, there is plenty room to grow. Once we complete the upgrade of our PM4 and integrate the new capacity increase into our sales model, we will be evaluating the possibility of either completely overhauling or completely replacing our PM5.”
TWM/4: And the main challenges?
Jadavji: “The biggest challenge for us will be to differentiate ourselves from the low cost foreign imports as well as the new North American capacity coming on stream. We need to stay true to our competitive advantage: remain focused on our niche markets where we can build solid relationships with our customers and service them at the highest level possible.”
TWM/5: Is export a key potential market for you?
Jadavji: “We export to the United States and a little to overseas markets. While both the Canadian and USA markets are the key focus of our sales model, our overseas sales help diversify our sales portfolio and help us keep a pulse on overseas developments.”
TWM/6: Are environmental tissue products gaining more popularity in Canada, is this a key marketing strategy for you? Jadavji: “Environmental stewardship has become part and parcel of our industry which is why our customers expect us to be environmentally conscious. Whether or not we have any of the numerous environmental certifications, we pride ourselves in being socially responsible and respectful of the environment. We have invested significant financial resources to our environmental programme and are SFI certified. We continue to follow procedures internally at our mill that are common amongst many of the various certification guidelines to ensure we exceed expectations.”
TWM/7: How is Canada’s economy impacting you and the Canadian tissue market generally, is now a good time to invest and for the sector to grow?
Jadavji: “The Canadian economy is showing positive signs for overall growth. However, in comparison to the USA and European markets we still remain a small market and as a result, new investment in plant and equipment (predominantly based in USA Dollars at an FX rate of 1.35) may not yield the returns one would expect or possibly earn from other investments.
“The tissue market in Canada is a fairly mature market, limiting the potential for new investment. However, those already established in the industry will continue to find opportunities for growth providing justification for new investment.”