Can commodity papers be 'specialized?'.

Papermakers (in the broadest sense of the word) have a love/hate relationship with specialty papers. On one hand, specialties tend to be high margin grades; on the other, they tend to be short run with fussy customers. Specialty papermakers, forced to fulfill specialty orders on machines generally designed for some other purpose, tend to earn the high margins they receive.

DEFINITIONS

What are specialty papers? Most of the time we think of them as falling in the broad category of printing and writing grades, but there are certainly specialties outside these categories. These include dielectric and transformer papers, specialty tissues, some bristols, waxing and other impregnated grades, and many more. Specialty papers tend to be more defined by marketing terms (short runs, limited customer base, high margins) than by technical attributes.

The industry would be well served (higher margins) and would better serve its customers (more choices) if we could transform every grade into a specialty. Unfortunately, with the high volume production methods we have employed and perfected, the only specialty aspects to most grades are trim, basis weight, and finish. These leave producers of low margin commodities and their customers settling for compromises instead of what they really want. Bound by traditional thinking and sunk investment costs, we tend to think the future will look much like the past.

This is precisely where the U.S. auto industry was in the 1960s. Variations in autos then included numbers of doors and hardtop, sedan, convertible or station wagon styles. The rest of the "choice" range foisted on the customer largely consisted of color, pounds of chrome plated trim and outside mirror design. Then in the 1970s, the Japanese taught us that it was possible to obtain a plethora of design options at economical prices to the consumer and high margins to the manufacturer. The auto industry has not been the same since, with average prices escalating from about US$ 3000 in the late sixties to US$ 25,000 today. If only the paper industry were so fortunate.

The usual fear of specialty, or niche, papermakers is that they will be too successful. By "too successful" I mean that they succeed in creating a large market for a once-specialty item. When it is no longer a specialty--meaning it has become a widely desired product with high margins--someone will install a high volume, low margin paper machine and thus destroy an otherwise lucrative business.

However, if we could rework our thinking and tweak a couple of capabilities, we just might be able to turn the whole market into specialties, for the good of customer and producer alike. If we think of the principle defining attributes of a paper grade being the following, we may find a pattern by which this could happen. These principle attributes are:

DIMENSIONAL:

* Cross machine--trim

* Machine direction--roll or sheet

* Z direction--caliper, basis weight and surface roughness

OPTICAL:

* Bleached or unbleached

* Opacity 

* Surface brightness and finish

* Color

PHYSICAL:

* CD & MD strength

* Softness or hardness

If we could tear the sheet apart and think of these attributes separately, we just may be able to make the customers what they want and produce a relatively high margin product at the same time.

Imagine a high-speed machine producing a thin base sheet (not to be confused with base stock for coating--in this article "base sheet" must be used in context) with extremely uniform, high value properties of CD and MD strength; tight tolerance Z-direction attributes, totally symmetrical front to back and exacting opacity qualities. Due to back end operations, this sheet will necessarily be bleached or unbleached and this attribute will be unchangeable. Think of this sheet as being akin to the automakers' power, transmission, and structural platform upon which they can append many different body styles. It is uniform, high quality and made exactly the same way to the same exacting standards each day. This is a high quality, low cost and low margin product.

However, it is not really a product, for we never sell it to the customer in this fashion, just like the car manufacturer does not sell the base platform to end use customers either. Think of it more as an in-process base component. Of the principle attributes listed above, it contains four of the nine: Z directions (partially fulfilled), bleached or unbleached, opacity (partially fulfilled), and CD and MD strength. In subsequent systems, we finish building the sheet.

If the base sheet only needs coating, it proceeds in a fashion just like it would in an off line coater today, nothing different here.

However, the sheet may need additional caliper or basis weight, different surface roughness standards, surface brightness and finish standards, color and additional softness or hardness. Now comes the opportunity for researchers. Now, we need a machine that looks something like a combination of an off line coater and a paper machine. Since this is where the margins are to be made, I will call it the "value added machine" or "VAM". The VAM needs to be able to do something that, to my limited knowledge, no one has yet been able to do. The VAM needs to be able to add another layer of fiber to one or both sides of our base sheet. In other words, we must be able to take our base sheet, which is the nominal 5% moisture sheet we are used to producing, and add a fiber layer (which will no doubt have to start through the process in some sort of headbox device) on the top or bottom or both, which completes our specialty sheet. This layer(s) must:

* adhere to our platform sheet seamlessly--no plybond separation--without destroying any of the properties of the platform sheet

* contribute caliper, basis weight and surface roughness or smoothness attributes as specified by each customer

* finish fulfilling the opacity specifications

* provide final brightness, finish and color attributes per specification

* complete the softness or hardness specifications

There is one more attribute we will ask of the VAM--the ability to change any and all of the above attributes in as small as 200 kg lot sizes with no waste between attribute changes and all the while tracking the location of each lot on full reels. Of course, this is all impossible until some entity or someone with the education, resources, and motivation shows us it can be done.

There is a bit of work yet to be done as the completed specialty sheet comes off the VAM. I have not discussed CD or MD dimensions. We are so used to rolling or sheeting in nice linear patterns with mechanical slitters that it seldom occurs to us that other options may be desirable and of great value to the customer. But why does this have to be--why not make sheets or edge conditions exactly to the customer specifications? There has been a great deal of research and some application of high pressure water jets and lasers as cutting devices. But, to my knowledge, when it comes to basic paper manufacturing, this work has been limited to nice, neat, linear cuts (different story in traditional converting operations). Let's imagine a second new device (not a winder or a cutter-layboy) called "VAM II." This unit could provide product (in roll form) with any edge condition or edge shape the customer wants, and (in sheet form) end cuts tailored to customer demands.

This bit of visualization on my part has a great chance of being met with the guffaws of laughter and exclamations of derision that similar comments made to the U.S. auto industry in the 1960s would have received if someone had envisioned the quality and plethora of automotive choices available worldwide today. However, these emotional outbursts are not indicative of whether this really can or really will be done--the completion of this task is up to those resource-laden, risk-taking, insightful individuals among us (who will no doubt be heavily rewarded financially for their success).

By the way, besides using superior paints and finishes, automobiles of today do not rust like those of the mid-twentieth century. Why? It is because someone perfected a process considered impossible for more than 75 years--a way to hot dip galvanize steel sheets on one side only. You can thank that determined soul that your 10-year old car does not look like a spaghetti strainer. But for us, the germane question is, "Who will perfect the processes and machinery to make all grades and all orders of paper into specialty papers?" It will be a new day in the paper industry when (not if) this happens.

RELATED ARTICLE: WHAT YOU WILL LEARN:

* Why papermakers have a "love/hate" relationship with specialty papers.

* Prospects for making "commodity" paper grades into value added "specialty" papers.

* What a "value added machine" is.

ADDITIONAL RESOURCES:

* "Large office stores demand it, paper suppliers provide it (specialty paper)," by Jerome Koncel and Ted McDermott, Solutions!, July 2003. Product Code: 03JULS030. To access this article, type the Product Code into the search engine on www.tappi.org.

JIM THOMPSON, SOLUTIONS! EDITORIAL BOARD

ABOUT THE AUTHOR

Jim Thompson is chairman and CEO of Talo Analytic International Inc., Atlanta, Georgia, USA. He is also a member of the Solutions! Editorial Board and writes the weekly column "Nip Impressions" in TAPPI's weekly electronic newsletter, Over-the-Wire. Please contact him at [e-mail].

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