After the festivities, Anthony Pratt discusses company’s role in the U.S

Pratt Celebrates Latest Sheet Feeder Start-up : After the festivities, Anthony Pratt discusses company’s role in the U.S

Mark Arzoumanian

THE BUSINESS leaders of Valparaiso, Ind., have welcomed Pratt Industries’ latest sheet feeder installation, Jet Corr 6, with open arms. But until the evening of July 15th they probably didn’t realize the company isn’t all business; it also knows how to celebrate in style.

Approximately 1,000 corrugated box making executives and their spouses and guests attended Jet Corr 6’s grand opening, which included special guest appearances by Muhammad Ali, Tony Curtis and Dr. Ruth Westheimer.

But that’s just the beginning. A lavish buffet dinner was followed by a 45-minute performance by comic and Tonight Show host Jay Leno. Then singer Paul Anka belted out a medley of his hits for just over an hour. Anthony Pratt, chairman of Pratt Industries-USA, introduced Anka and, as they did last year when Pratt Industries celebrated the opening of its Millugator in Conyers, Ga., the two of them sang a special version of Anka’s classic song, “My Way.” The lyrics were cleverly rewritten to reflect the corrugated box making industry from a distinctly Pratt point of view.

As the evening wound down, I had the opportunity to sit down with Anthony to ask him about this latest commitment to serving U.S. box makers.

PBP: Why did you decide to build this latest sheet feeder in the greater Chicago area?

Anthony Pratt: We feel that Chicago is a large sheet plant market. It’s the largest in the world, about 3.7 million tons in the 75 mile stretch from Chicago to Milwaukee. Whereas Atlanta is about one million tons and Ohio is about 111/42 million tons. So we decided that we would go into the biggest market because we feel that marketing sheets is relatively underrepresented there.

PBP: How do you respond to someone who says that Chicago already has enough sheet producers?

Pratt: We’re very dedicated to staying away from the national account business. We specifically see ourselves as a sheet feeder. If you look at the supply/demand equation in terms of dedicated sheet feeders, we feel that Chicago’s size relative to supply/demand is a good market for us.

We’d like to think of ourselves as being a friend of the sheet plants in Chicago, Indiana and Ohio. Not only are we available to sell them sheets, but if they’d like, we’d be happy to buy their sheet plants from them. That’s something we’ve been very open about. We’re very keen to supply sheets that are of good quality with good service and at a reasonable price. We’re very proud of the product we supply. We stand behind it. We’ve now come out with an additional product called Dynamite Board[R], which is 10 plies of 33# board. We claim that it’s the strongest doublewall in the world.

We see a big future in Chicago, in particular for N-flute; N-flute with a lot of graphics. That’s something that Smurfit-Stone’s Michael Smurfit has alluded to in the past and I agree with him. There’s going to be somewhat of a battle between the corrugated container industry and the folding carton industry. And Chicago, being such a big market, is a good place for this to happen.

I strongly believe that corrugated will come out on top in the sense that I can see a day when Kellogg’s[TM] Corn Flakes boxes will be made out of N-flute. Instead of having to pack 24 Kellogg’s Corn Flakes boxes in a brown shipper, you may be able to do away with it and stretch wrap these small flute cereal boxes. While the box may cost a little more, there won’t be a need for a brown shipper. So, we see a big future for high graphics on white N-flute board.

PBP: Now this sheet feeder in Valparaiso, Ind., is not pure. You have finishing equipment there. Do you plan to keep it there?

Pratt: Sure. We don’t sell against our sheet plant customers out of our sheet feeders. We tend to sell to pizza box customers. We sort of use (boxes made at our sheet feeders) as ballast. Jet Corr 6 is part of the longest millugator in the world, which stretches from the board mill in Staten Island, N.Y., to the ‘gator in Valparaiso, Ind. So even though it’s 1,200 miles away, we see that ‘gator as the other end of the Staten Island mill. We built it to integrate Staten Island. We really have decided to integrate in the Midwest.

PBP: What was the most challenging aspect of your experience in Valparaiso?

Pratt: We’re in Indiana because we found it to be a business-friendly environment for building that particular plant. It’s in close proximity to Chicago, only 45 miles away. This makes it a good location from a labor point of view. It’s sort of close enough to Ohio as well. We’ve closed two factories. We took 160,000 tons and shut it permanently at the Menominee, Mich., medium mill. We shut our full-line box plant in South Holland, Ill., before we built the Valparaiso site. Some people don’t realize that we actually closed a lot of capacity in the Midwest. For us the most challenging part of the Midwest was shutting those two operations, which we felt was good for the industry. But it’s always painful to put people out of work. So far the people in Indiana have been very supportive.

PBP: How is the Jet Corr 6 BHS corrugator running so far? What kind of production numbers are you getting to date?

Pratt: The corrugator is producing about 300 tons a day. We have 12 BHS corrugators around the world now. The one at Conyers, Ga., was the first one in America for us and the one at Valparaiso is the second. We find the quality to be excellent. The flute profiles are very strong. It does a lot of order changes in one shift because of its swing order change technology. So it’s very good for small orders. It is really a paradigm shift in terms of productivity, which can hopefully help our customers.

PBP: You’ve been doing business in the U.S. for over 15 years now. How do you think your competitors regard you?

Pratt: Frankly, I see it the way my father did. We don’t see ourselves as competing with the major integrateds. They’re much more national account oriented. We have no plans to go into the national account business. We prefer to stick to sheet feeding and acquire sheet plants. So in that sense, we don’t compete except where they (the integrateds) do sheet feeding, which is not a very big part of where their heart and soul is. They’re in a much bigger league than we are. We kind of see ourselves as the Horner-Waldorf of the 21st century. The culture at Horner-Waldorf was very much sheet plant-oriented. It was a great company.

PBP: What has given you the most satisfaction and what has been your greatest disappointment?

Pratt: The greatest disappointment is that since living here in 1990 there have been approximately two good years for the industry and eight bad years. The thing that has been most pleasing has been going from losing money to making money.

PBP: In 1990 Visy was doing $40 million worth of business, right?

Pratt: We’ve gone from $50 million in sales then to $500 million and we’ve gone from 500 people to 2,000. Our earnings have increased 10 fold. Where the U.S. is different from Australia is that the margins are much skinnier. But it’s a stable market in that everyone is already here. And therefore you have no limit to the amount of steady growth. We hope to double in size about every five years. We don’t see ourselves as a Microsoft.

PBP: Finally, what’s next for Pratt Industries in the U.S.?

Pratt: To continue to integrate Staten Island in the Midwest. To continue to digest Staten Island, which means integrating in Valparaiso and maybe buy some sheet plants in the Midwest.

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