Following rapid growth across Europe over the past three decades, Sofidel is now making a giant move into the American tissue market. It has bought several existing top-quality operations and is now building a new greenfield state-of-the-art tissue mill in Ohio.
By Hugh O’Brian
Tony Curtis, the British-born CEO of Sofidel America, is currently engaged in what must be the most exciting phase of his already-extensive tissue industry career that has covered several companies, countries and continents. After graduating with a degree in Paper Science and Engineering in 1991, he started his career in the tissue industry in France and quickly followed that with positions of increasing responsibility in the UK, Ireland, Italy and Canada before landing in the US in 2012.
That’s when he joined Sofidel, the world’s sixth largest tissue producer, just as the company was entering the American market. He got the mandate to lead Sofidel America on its ambitious growth path with the clear understanding that the owners, the Stefani and Lazzareschi families, wish to maintain their successful Italian company culture, while applying it to a new setting in the dynamic American market.
The company, which celebrated its 50th anniversary in 2016, has a culture that might best be described as low-key, focused, sustainable and professional. As soon as I walk in the door at the company’s North American headquarters in Philadelphia, Tony makes a point to introduce me to, and give me time to chat with, each of the 20 employees in the HQ. It’s somewhat of the United Nations feeling, with the very broad multinational team coming from the USA, Italy, France, the UK, Ecuador, and Columbia.
In the six other locations that now make up Sofidel America the international flavor is similar, explains Tony. “Sofidel Europe is represented in all of our locations, without exception,” he says, “and their main role is to train our new American employees in the Sofidel way of managing the business processes. Both in the headquarters and in the plants, we need a really strong link to Sofidel Europe. The aim is to leverage the positive experience from Europe and move it quickly into America, while clearly maintaining our successful and historic culture. This is of utmost importance, because we are hiring many new recruits in every location.”
Quick steps to nationwide footprint
They certainly have moved quickly. Sofidel America was created in 2012 when Sofidel, headquartered in Lucca, Italy, purchased Cellynne Tissue, a privately-owned producer that had started in 1988. The acquisition gave Sofidel America three plants, with the main one in Haines City just south of Orlando, Florida, and the others located in Green Bay, Wisconsin, and Henderson, Nevada.
Three more big steps followed. The first was the opening of a new plant in Tulsa, Oklahoma. This was followed by the acquisition of the majority of the operating assets of Green Bay Converting, another privately-held converter with plants in Green Bay and Hattiesburg, Mississippi. The third, and largest, move was the launch of a new greenfield mill project in Circleville, Ohio, about 40 km south of Columbus.
Today Sofidel America comprises seven sites in the USA. These are the American HQ in Philadelphia, and operations in Haines City, Green Bay, Hattiesburg, Tulsa and Henderson. The seventh site, the Circleville mill where construction is proceeding full speed, is planned to startup in the beginning of 2018 and will clearly be a major piece in the puzzle to catalyze further growth in the North American market.
Newcomer in America, with 50 years of private label experience
As it entered the market, Sofidel America got a very positive reception from customers, both existing and potential new ones. Regarding the initial years Tony says that “growing a business always involves some degree of difficulty and I cannot say that we have not had our challenges. With the immediate introduction of SAP into the Sofidel America business and the rapid addition of new sites, we have experienced growth challenges on both the internal and external logistics parts of our business. But we have come through as a more experienced team, which I’m sure will be a huge benefit to our organization and our customers as we continue to grow. We are very loyal to our customers and have received great support since entering North America in both the Away from Home (AFH) and Retail sectors of the business.”
The timing for coming to North America has been good, explains Tony. “Since we arrived in 2012, AFH has been stable with modest but positive growth. Our retail growth has moved much more rapidly, albeit from being a very small part of the business in 2012. At that time private label share of retail tissue was around 20% and today it is higher than 25%. The marketplace is changing as retailers increasingly see the value of having their own name on their tissue products.”
“Our selling point is that this is what we’ve been doing in Europe for a long time, as we are one of the largest private label tissue suppliers in Europe. Previously in North America, 80% of retail was supplied by three manufacturers, and that was all branded products. Now the retailers see the chance to get a qualified supplier which has long experience but is new to the American market. That definitely has got their attention. We don’t know what market share level private label tissue will ultimately reach, but it is certainly growing.”
“We’ve been welcomed by retailers, but of course we must follow that up with great service and innovative products, to differentiate ourselves from the other well qualified and professional suppliers. A lot of those positions are branded positions, and once a retailer decides it wants to have its own private label tissue, it needs to decide which supplier it prefers.”
Sofidel is certainly hoping it will be that preferred supplier and has been working hard to build up its manufacturing, sales and service organizations to make that happen. Total employees are now around 700, up from 350 when the Cellynne acquisition was made. That number will very likely rise sharply as Circleville gets going and as the organization is built further. “We’ve got a great future ahead of us, and in 2017 we will be recruiting hundreds of bright energetic people to be a part of our team for the long term future of the company,” continues Tony. “Enthusiasm and passion are a big part of what we’re trying to create, and we are very proud of being part of the Sofidel family. It’s a pillar of our growth.”
New mill in Ohio: Best technology for both quality and environment
The Circleville mill will be a big step forward in many ways. Not only for supporting the company’s growth, but also because of the very advanced technology that is included in the greenfield mill.
“Circleville will have the world’s best-available-technology regarding both product quality and environmental efficiency,” explains Tony. “That includes the NTT paper machine, the Constellation converting equipment and the highly-automated finished-product warehouse. All three of these are extremely innovative, and it will be the first mill in the world where all three are used together. But the fact is that Sofidel Group is already benefiting from the Constellation technology and the automated warehouse in different European sites, and soon Sofidel Group will be starting an NTT machine in Poland as well.”
NTT is the new technology from Valmet which gives high-bulk, soft tissue without the high energy consumption that TAD demands. Thus, Tony says the environmental footprint is very advantageous. “TAD is a heavy user of energy, even though that’s not a big disadvantage in the USA due to so much gas availability today. Still, we’re not convinced it makes for a great sustainability profile. In the future, the market may demand that we have TAD products in our portfolio for towel products, but before we make any decision, we will be assessing that need very carefully.”
Circleville will include two new NTT machines, which are planned to start about three months apart from each other in 2018. The reasoning for such timing is to give synergies both in the actual construction projects as well as in training people to run the machines. The Columbus site covers 115 ha or 285 acres, meaning even after the addition of the paper machines, the converting equipment, and the giant finished goods warehouse, there’s still plenty of room to add more capacity in the future.
Using Constellation technology for tension and bulk control
On the converting side, Sofidel America has been an early adopter of Perini’s new Constellation technology. It presently has two Constellation lines in Hattiesburg, with another one on the way, and an additional one to be installed in Green Bay this year. Tony says the concept gives them lots of advantages.
“The key thing about Constellation is that the four-roll nest allows us to manage the tension of the sheet as we are making the log. This lets us proactively manage both roll density and sheet tension, from the beginning of the core to the top of the roll, giving very uniform density and tension in the roll. This, in turn, means we can precisely manage bulk, and allows us to tailor our products much more to the market needs, giving us a leverage on innovation that we didn’t have before.”
There are further downstream benefits too, continues Tony, not just for the product quality but also for managing the packaging efficiently. “With roll density and size much more tightly controlled, we can optimize our packaging. The packs look much better and are more consistent. So you minimize the variance, which previously was more difficult to control. And you can make higher diameter rolls without adding extra sheets. I can show you one roll made with 18 gram tissue, 450 sheets and another roll with the same 18 gram tissue and 450 sheets, but one roll has 15% bigger diameter than the other due to the winding technology.”
Three legs to stand on
While consumer tissue and AFH products are a major part of what Sofidel America is doing, the company also has another important business line: Contract converting, which means making products for other manufacturers. Although Sofidel has not previously done contract converting, it was a big part of Green Bay Converting’s activities.
Sofidel America fully intends to continue to operate in this sector, and Tony says that the company has various confidential contracts with other manufacturers, which are of course all covered by nondisclosure agreements. “Although we’ve never been in this segment of the business before, we certainly aim to maintain it as a third leg to stand on, complementing Consumer and AFH tissue. Being able to successfully manage contract converting proves that we are capable of making and supplying the highest quality products in the market.”
Putting it all together
So, the stage is set and the Sofidel America tissue show has begun, based on a major financial investment from the owner families, combined with a commitment to sustainability that includes Sofidel’s membership in the WWF Climate Savers Program. Added to that is a mix of top-quality talent and world-class assets, culminating with Circleville, one of the most technologically advanced tissue mills in the world.
If what we have seen so far is anything to go by, it looks like the Sofidel America story is going to be an exciting performance that we will want to follow very closely for a long time to come. Stay tuned.