INKJET PAPER MAKER TO THRIVE

[Anonymous]

Paper maker turns page to thrive in 21st century market
Jan 2006
Foreign competition and rapid technological changes in the tradition-bound printing industry have led the 133-year-old Mohawk Fine Papers Inc. to turn to technology for its salvation.
The Cohoes paper manufacturer invested $35 million in research in the past decade, and created a research and development team to create papers for next-generation printers.
“I think that with foreign competition and some of the larger commodity mills making brighter, whiter paper, we constantly have to come up with products that differentiate ourselves from these people,” said Thomas O’Connor Jr., president and CEO of the family-owned Mohawk Fine Papers.
The company is now spending about $2 million a year on research and development. Without it, O’Connor is convinced the company would have suffered.
“It would certainly be a slow demise,” he said. “I don’t think we would have gone bankrupt in the next four or five years. We just would have gotten smaller and smaller.”
Instead, the Cohoes company is getting bigger. This year, Mohawk doubled in size–in head count and revenue–to 800 employees and $300 million in revenue after it acquired the fine papers division of International Paper Co., making it the largest North American supplier of premium uncoated papers.
That acquisition led the company to change its name from Mohawk Paper Mills Inc. to Mohawk Fine Papers.
But it’s the research that will help the company grow.
“That’s what sets us apart. We spend several millions of dollars a year on research and development, and that doesn’t include the time we run trials on our equipment and so forth,” O’Connor said. “If you went back more than 10 or 12 years we didn’t have an R&D department. Everything was the same.”
Big share of shrinking market
O’Connor knows most things at Mohawk can’t stay the same.
“We have to make sure we’re studying these new digital print mediums so we have the best products,” he said.
Mohawk Fine Papers makes paper for the premium text and cover market. It makes the slick annual reports for Adidas and Ocean Spray. It makes book jackets for the Harry Potter books.
Its paper feels good to the touch and brings out rich, bright colors or the darkest black–something Mohawk officials say is tough to do.
Because of these traits, companies are willing to pay a premium.
“The premium text market is a shrinking market,” said Gavin Gaynor, director of Mohawk Fine Papers’ research and development department. “We survived by taking a greater market share in a declining market. That strategy will only work for so long.”
As inkjet printing and laser printing have grown in the past decade, Mohawk Fine Papers has had to respond, working on what types of papers and coatings work best with new printers and ink being developed: what makes the ink adhere better, not smudge; and what brings out the best qualities of the images and text being printed.
“We have relationships with every major distributor–Epson, HP, Kodak, Canon, Xerox, Konicka,” Gaynor said.
Some of those companies contact Mohawk Fine Papers before a new printer hits the market to pretest the equipment.
“If you’re going to participate in the digital print market, you have to understand the equipment that’s out and the direction they’re headed,” Gaynor said, “because you have to design paper for it.”
For the first time, the company created a consumer product that can be bought off the shelf at office supply stores.
“There is no doubt today a majority of our sales and profit is in traditional text and cover grades,” Gaynor said. “But our growth is in digital print grade.”
Master new technology
Mohawk Fine Papers has had to master the changes in digital printing and the move from ink to toner.
“R&D is a company-wide process,” O’Connor said. “I don’t know how much of a greater role it could take. It’s very active right now.”
Mohawk Fine Papers’ research department has anywhere from four to seven employees and the company now has five patents, all less than a decade old, for its Inxwell technology related to making toner adhere to paper.
In the past year, the group was especially active after Hewlett-Packard bought Israel-based Indigo Press two years ago. Indigo Press had developed a new printing device which works like a color copier, except instead of a dry powder toner, a liquid toner is used.
While the printer was revolutionary, special paper with Sapphire coating was needed. The paper had to be used within six months before the coating’s properties wore off and the paper yellowed.
Mohawk dabbled in this industry, shipping its paper to another company to apply the Sapphire coating. But when HP bought Indigo, Gaynor said Mohawk paid attention.
“We said, ‘Wow, this is interesting. Here’s a company [HP] with research dollars and marketing savvy,'” Gaynor said. Mohawk was convinced HP had big plans for the printer.
“They bought this technology for a reason. We are willing to bet now that HP will understand how to market this great technology,” he said. “So we’re going to make an investment in paper for this device now. Rather than do what everyone else is doing, we’re going to deliver a solution that works and overcomes all the shortcomings of the Sapphire treatment.”
Mohawk workers studied the Indigo machine, its inner workings, the inks used. It studied the chemical makeup of the Sapphire coating treatment and conducted numerous lab tests.
The research team was up to the challenge.
The research team
Mohawk’s research team is led by Gaynor, 40, who grew up in a paper mill town in Hawesville, Ky. His grandfather, uncles and cousins worked at the mill now owned by Weyerhauser.
So did he during his summer vacations.
Gaynor earned his doctorate at North Carolina State University in chemistry engineering. But he didn’t like the idea of working on long-term projects. He was studying semiconductors for use in future computer chips.
“I suppose I was not patient enough to wait 20 years to see the fruits of my labor,” Gaynor said. “I was very interested in the intellectual stimulation of research, but I needed to be much closer to the consumer.”
He was doing post doctoral work at Penn State University when he made a cold call to Westvaco, a Mohawk competitor, asking if they had a job in product development. Westvaco did.
“I took the job and haven’t looked back since,” Gaynor said. “Product development really suits me.” He joined Mohawk five years ago.
Most of his team has been at Mohawk longer. Rich Barker has been at Mohawk for 12 years. Barker is a West Point graduate who has a degree in weapons engineering.
Barker used to work for one of Mohawk’s chemical suppliers, Nalco.
“He knows chemicals,” Gaynor said.
When it comes time to get the research out of the lab and into production, Barker is the one who makes it happen.
“He knows these mills probably as well as anyone in the company,” Gaynor said. “That’s a great tool for our group.”
Tuan Nyugen has been with the company for six years. He is a graduate of SUNY Environmental Science and Forestry in Syracuse.
“Tuan is our expert in the lab,” Gaynor said. “Bottom line is he has a good overview of paper-making in general.”
Bill Tierney’s been with the company three years, but has 17 years experience in the paper industry.
The result of the focus on HP’s new product? Mohawk’s Super iTone, a new product specifically for the printer. It’s a chemical applied to the paper that, as Gaynor puts it, “has an affinity for the ink.”
Just the start of research
While Gaynor is proud of his researchers, he said they’re not the only ones at Mohawk Fine Papers.
“Those are the people who report to me, who have offices right down the hall,” he said of his team. “That’s not where product development ends.”
President O’Connor said the sales and marketing people come up with some concepts and the company’s technical group studies the printing technology.
“It’s not just three or four people sitting there. They have come up with some very good ideas, but many of the ideas have come from what our sales and marketing people have seen coming in the future,” O’Connor said.
Gaynor said those running the machines also are part of the process. They don’t get frustrated when his team wants to run tests on the machines.
“It’s a great relationship and single-mindedness of purpose we have from marketing, product development and manufacturing,” he said
Gaynor said other companies come up with great concepts, but they don’t always get implemented.”One of the beautiful things we do here is we do pretty good science,” he said, “but what we’re really good at is translating the science of what we do into products.” 

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January 9, 2006 at 10:19 AM