Nimble footwork helps Wausau Paper compete with tissue giants.
Tissue has been a solid growth market for Wausau Paper. In 2005, Wausau Paper's tissue segment profits advanced while the company as a whole reported a loss. "Wausau Paper achieved record sales and shipments in 2005 despite declining uncoated free-sheet and lackluster specialty paper markets," said Thomas J. Howatt, president and CEO, in a press release. "Importantly, growth was driven by success with our niche market and value-added product strategies, as evidenced by a 10% increase in shipments of premium towel and tissue products." In 2005, Wausau Paper shipped 162,286 tons of towel and tissue compared with 151,903 tons in 2004.
According to the company, the towel and tissue segment's fourth-quarter operating profits increased 20% to US$ 9.4 million compared with the previous year, while net sales and shipments for the segment increased 14% and 8%, respectively.
"Towel and tissue's strong financial performance reflects higher selling prices and mix enhancement that more than offset increases in energy and raw material costs," Howatt said. "Strong growth in our higher-margin, value-added product category continues to be fueled by innovative products, including our EcoSoft[TM] Green Seal[R] product line, whose sales increased 24% for the year. This growth helped towel and tissue achieve record sales, shipments and profitability in 2005, with full-year operating profits of US $38.0 million, up 30% compared with a year earlier." The tissue and towel segment produced net sales to external customers of US$ 260 million in 2005, compared with US$ 226 million in 2004. The segment accounted for about 24% of Wausau Paper's total 2005 revenue of US$ 1.1 billion.
Wausau Paper's towel and tissue products division is headquartered in Harrods-burg, Kentucky, USA. It produces Bay West brand products at its mill in Middletown, Ohio, USA on two paper machines, one a Yankee fourdrinier with a 144-in. trim and one twin wire tissue machine with a 120-in. trim.
VALUE OF CONSISTENCY
Brand marketing is one of the drivers behind Wausau's towel and tissue success. "Brand marketing is extremely important as Wausau Paper/Bay West competes with companies with strong brand recognition in the consumer segment and, in many cases, carry those same or similar brand names in the away-from-home market," says Mark Stanland, director of marketing, Bay West products. "Since the Bay West brand and name has been in the marketplace for over 80 years, we feel that consistency has enabled product recognition with corporate customers as well as end users. Consumers that recognize our Bay West brand name as well as EcoSoft and DublSoft[R] know they are seeing products with longevity as well as quality."
With the introduction of its EcoSoft Green Seal line, Wausau Papers was able to, with permission from Green Seal Inc., brand products that meet their criteria with the Green Seal name. For environmentally conscious corporate customers and end users, the Green Seal name and mark conveys a powerful message and further promotes Bay West's brand marketing, according to Stanland.
Green Seal, an environmental certification organization based in Washington, D.C., USA bases its work on scientific evaluations using internationally accepted methodologies. According to Green Seal, product evaluations are conducted using a life-cycle approach to ensure that all significant environmental impacts of a product are considered, from raw materials extraction through manufacturing to use and disposal. Wherever possible, Green Seal standards cite international test methods for evaluating product performance or environmental attributes such as toxicity. Green Seal says that its procedures conform to international standards for ecolabeling.
One of the reasons Wausau Paper/Bay West's marketing program is essential is that the company competes directly with Georgia-Pacific, Kimberly Clark and SCA, which together produce about 82% of the AFH tissue in North America. "Over the years there has been major consolidation in our industry," Stanland said. "As mergers and acquisitions occurred, Wausau Paper/Bay West was a constant in the marketplace, continuing to offer our customers excellent service and quality products. The way we compete with giants in this industry is to develop a niche market and differentiate ourselves by offering value-added products and services. At Wausau Paper, we pride ourselves on being an industry leader even though we aren't a giant. With our size, we are able to be responsive and flexible to quickly address individual customer as well as market needs."
This flexibility translates into consistently new and innovative products, Stanland says. An example of this product innovation is the company's Wave'n Dry[R] electronic touch-free towel dispensing system, which was the first of its kind on the market. Wausau Paper also introduced the first complete line of Green Seal-certified towel and tissue products with its EcoSoft Green Seal line. Also, Wausau Paper patented the new OptiCore[TM] bath tissue technology for controlling usage and reducing waste. "These types of products help us compete effectively along with our outstanding customer service," Stanland states.
Bay West brand products are distributed through selective distribution channels. Wausau Paper currently has distribution throughout the United States, Canada, Mexico, United Kingdom, Australia and New Zealand. "Our focus on selective distribution has allowed us to build a distributor base with access to the various end user segments, and we are able to quickly bring new products and services to these end user customers," Stanland says. "Our market access is of value to both the distributor and end user customers."
As the products mentioned above indicate, Wausau Paper consistently has developed new tissue and towel products, as well as new dispensing systems. As Stanland explains, new products are vital to the longevity and success of Wausau Paper's Bay West brand. "The market is ever-changing and for us to stay competitive we must constantly provide products that meet the needs of the time as well as those that are innovative enough to change the industry," Stanland said. For example, in 1997 Wausau Paper was the first towel and tissue company to offer a totally touch-free electronic dispensing system.
Wausau Paper's most recent Bay West brand new products include the first complete towel and tissue line to be certified as environmentally preferable by Green Seal. "Our EcoSoft Green Seal line is not only 100% recycled and meets EPA guidelines for post-consumer wastepaper, but meets Green Seal standards for papermaking processes and packaging," Stanland says. "The EcoSoft Green Seal line speaks to the entire process of how the paper is manufactured, shipped and used."
Wausau Paper also has introduced its newly patented OptiCore bath tissue technology. OptiCore has a two-part core that ensures the maximum use of each tissue roll in the coordinating Revolution[TM] and DublServ[R] dispensers before advancing to the next roll. According to Wausau Paper, this technology optimizes product usage and saves on maintenance time and costs since it reduces waste. OptiCore tissue is available under the premium DublSoft brand and its 100% recycled EcoSoft Green Seal brand. Coordinating dispensing systems were developed to accommodate this newly patented two-part core and are available in 3-roll (Revolution) and 2-roll (Dubl-Serv) versions.
With its affiliation with Green Seal, Wausau Paper/Bay West has put even more emphasis on its recycled towel and tissue products. Wausau Paper has produced its 100% recycled EcoSoft towel and tissue line for many years, and has been able to add value to these products as the market and demand has changed. "We have seen tremendous success with our EcoSoft and EcoSoft Green Seal towel and tissue lines," says Stanland. "Organizations like Green Seal Inc. are making it easy to identify these types of products. With the federal, state and local governments promoting 'green' initiatives and with the emergence of coalitions such as the U.S. Green Building Council, Green Hotels Association[R], and Green Restaurant Association, recycled products popularity and importance are rising."
MORE TISSUE IN THE FUTURE?
In 2005, towel and tissue was the strongest performing part of Wausau Paper's product portfolio, and the company is exploring the possibility of expanding its franchise. In June 2005, Wausau Paper announced a study to determine the feasibility of increasing tissue production capacity at its mill in Middletown, Ohio. The study included in its scope the potential installation of a new machine and support equipment at the Middletown site.
ALAN ROOKS, EDITORIAL DIRECTOR
WHAT YOU WILL LEARN
* How Wausau Paper/Bay West[R] maintains and expands its market share in the away-from-home tissue market
* The role new product development plays in Wausau Paper's success
* How Green Seal certification has raised Wausau Paper's environmental profile
* "Commercial tissue: Big market kept under wraps," by Alan Rooks, Solutions!, September 2002. To access this article, type the following product code in the search field on www.tappi.org: 02SEPSO54. Or call TAPPI Member Connection at 1 800 332-8686 (US); 1 800 446-9431 (Canada); +1 770 446 1400 (International).
* "Tissue gets a quick picker upper from rising economy," by Alan Rooks, Solutions!, September 2005. Product Code: 05SEPSO36
* "Bay West express on a fast track to excellence," TAPPI JOURNAL, July 1996. Product Code: 96JUL93
* Bay West[R], DublSoft[R], Wave'n Dry[R], and DublServ[R] are registered trademarks of Wausau Papers. EcoSoft[TM], OptiCore[TM], and Revolution[TM] are trademarks of Wausau Paper. Green Seal[R] is a registered trademark of Green Seal Inc. Green Hotels Association[R] is a registered trademark of the Green Hotels Association.
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|Publication:||Solutions - for People, Processes and Paper|
|Date:||Mar 1, 2006|
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