Cellynne jumps the fence into papermaking and grows on pace

Florida-based Cellynne has integrated into papermaking and grown according to its well-planned strategy. At the same time, the guys behind it seem to be enjoying themselves.

Hugh O'Brian

You just have to like the story of Cellynne. Two humble and likeable guys, both originally from France, stumble onto tissue rolls as a potential business opportunity in Florida in the early 1990s. Not so many years later they are the biggest independent tissue converter in North America.

But perhaps stumble is the wrong word because, behind their very relaxed manner, you get the impression that there is a lot of hard work and well-thought out planning. In fact, following a strategy which was outlined in an interview in mid-2005 (see Perini Journal n. 25, October 2005), the company has since that time installed two new paper machines and successfully integrated its converting to secure the supply of paper. The mill site has grown dramatically from 110,000 square feet to 650,000 square feet in four years with the addition of the PMs, parent roll storage, finished goods storage and numerous other areas.

Cellynne, which is owned by President Patrice Minguez and Vice President Marc Allegre, today has a converting capacity of about 70,000 tons a year and, following the recent addition of two paper machines, paper capacity is at about the same level.

The company serves both the AFH as well as At-Home or retail market segments, but the lion's share is by far AFH, at about 80%. Allegre says that a key to their growth has been a willingness to go after AFH accounts which are difficult for the big guys to serve, for one reason or another. "Our growth has mainly been centered on finding the people and accounts we want to work with and taking care of them," comments Allegre. They also have been fortunate, they say, that there is not a lot of competition in the Florida area where they have their first and main operation in Haines City, just south of Orlando.

Cellynne now has three production locations in the USA: Haines City, Florida; Green Bay, Wisconsin; and Las Vegas, Nevada. The biggest by far is Haines City and Allegre says that they can see this site being a model for their ‘mini-mill' concept that they hope to replicate at other as yet undecided locations around the USA.


PMs give security of paper supply. As part of the plan to give it full control over its paper supply, Cellynne has installed two paper machines from Metso over a 2 1/2 year period. The strategy all along was to start PM1, get it running smoothly and then move on to PM2. That is exactly what Cellynne did with PM1 starting in mid-2006, and PM2 being ordered in early 2008, with startup just about one year later in January 2009. "Even though PM1 was a big step," explains Allegre, "it still was only covering half of our paper needs. The aim was to cover essentially 100% so we moved right into PM2 once the dust settled."

The new PM2, which is pretty much a sister machine to PM1, is a Metso Advantage DCT 100HS model which can make approximately 125 tons per day, depending on grammage. Minguez says that the new machine has a few more ‘bells and whistles' than PM1, mainly because it will be more focused on lighter bath tissue, while PM1 is concentrated on towel.

"PM2 will be making a lighter sheet with higher dusting potential," explains Minguez, "so we needed a few more things like a sheet carrying system at the dry end and more advanced dust control. But other than a few differences like that, they are the same machine."


Comfort for the price. As far as why they chose Metso for the second machine, Allegre says that "it was easy as we were comfortable with each other since PM1 was working so well. We also felt that, even if it does cost a bit more for Metso quality, it is worth it. I don't want to simplify things too much, but the paper machine was probably one third of our entire investment in the PM2 project.

So if that machine costs say 10% more than another option, it is really not that sizeable compared to the amount of money that can be eaten up if there are delays and problems. So we went with the comfortable choice and it really was a well executed project, with an excellent startup."

Minguez adds that even though the global economic crisis began showing its head in 2007 and erupting in 2008, the timing was not bad at all. "The economy was not the best then of course but we got very good interest rates for the bank loans, so really it was good timing for us." In all, he estimates that Cellynne has invested on the order of USD 65 million in the expansion projects over the past four years. And, most importantly, they are now self-sufficient in paper, which was the point of the integration projects.


Jump the fence, with good people. The successful transition to papermaking appears to have been accomplished via a combination of good planning, good people and good technology. While it is rather common in many parts of the world for small tissue converters to become big converters and then add a paper machine or three, there are actually very few examples in North America. While there are some well known cases of converters who have failed to make the jump successfully, Cellynne is the only example that comes to mind of a smooth transition in North America.Minguez, when asked if he is pleased with the tremendous growth that Cellynne has seen, gives a straight-faced look and says "so far, so good", before breaking into a smile. "We have grown nicely and we are pleased with it. But we still have lots of work to do."

Allegre says the development has not come without challenges. "The biggest challenge to growth, we feel, is good people. To take the step from a small entrepreneurial company, to a much bigger organization of 330 people as we are now is not easy. You have to find the right people and make sure that a true spirit of teamwork is retained. It's really a simple concept but difficult to achieve. Thankfully we have made the transition quite smoothly and we certainly appreciate that the key people who have joined us have all been good team players."


Cruise lines: Niche waiting to be served. A nice example of Cellynne's strategy of finding good potential customers and working well with them is the cruise line business. Noting a possible niche in the market, perhaps because Florida is home to so many cruise lines, Cellynne started exploring how it might make a product for that industry.

The cruise ships have pretty special requirements for all the goods that are brought on-board, not just tissue products. There is very limited storage space, so compactness and space efficiency is important. The operators also require very fast loading of the ship when it is in port. For toilet paper, dispersibility is a key issue so the sewage systems do not get plugged.

"After contacting some of the cruise lines," recalls Minguez, "we just started talking to them and learned about their special requirements. We decided that it made sense for us to develop a special toilet tissue product which had high sheet count, which could be efficiently boxed for faster loading and also, by working on the paper chemistry on our machine, we could address the dispersibility."

Within a very short time Cellynne had a new 850-sheet count BRT which disperses easily in water. Now the company is serving not only cruise lines coming to Florida ports but ships in ports all over North America. "It has grown rapidly so that it is maybe 10% of our business now and has been a big success for us and for the cruise lines," says Minguez.

"They like the fact that there is less volume, less packaging and good dispersibility. The PMs gave us that possibility, which we never had when we were buying paper."


Retail still in the plan. As far as future growth, Cellynne has been thinking for quite some time about getting better balance between the AFH business and retail business. Minguez says that "we have focused over the past couple years on getting the paper machines running. At the same time the AFH business has been good so we haven't had the converting capacity or need to push our retail business. But we can see that private label retail could offer an opportunity for growth."

Cellynne last year added a new converting line that it expects will give it the added capacity it needs to enter the PL retail market in a larger way. It already does sell some PL products and also has a brand called Heavenly Soft that has distribution on secondary markets such as small retail outlets like gas stations and corner stores. But clearly more consumer tissue is part of the longer term plan.


Mini-mill concept very appealing. Allegre says that Cellynne has been inspired by the mini-mill concept that has been used so successfully in Europe, mainly by Italian tissue makers who were originally producing only in the area of Lucca but have now spread across Europe. "We have been inspired by the tissue makers from Lucca who have grown big by taking a small, workable mill layout and repeating it throughout Europe. We can see the potential to do something similar in the US." The Haines City site, they say, is now the right size, so there won't be any major further growth there. But deinking is an option that Cellynne is considering for the mill. The company sees that there is what it calls ‘mild' pressure in the marketplace to have recycled fiber in some of its products, such as those purchased by government agencies. A further driver is simply the lower cost of secondary fiber compared with primary fiber. So it may add an RCF line at some point at Haines City, although there is no firm timeline right now.


Small, fast, smart. In conclusion, Allegre says that Cellynne is really a pretty small player on the North American market. "We are only accounting for about 70,000 tons a year, so that's just one-third of the annual growth of the total market. We really are a small fish in a big pond." Small but fast, it seems. "And, hopefully," Minguez adds, "choosing our battles with the big fish wisely." So far, so good.

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