Italian tissue products company Sofidel aims to be important player in US, executive says, as it is in process of integrating recently acquired Florida-based Cellynne Paper into its corporation, will rename to Sofidel America
HAINES CITY, Florida
November 26, 2012
(Ledger (Lakeland, FL) )
– Angelo Della Maggiora played his cards close to the vest about Sofidel's plans for the U.S. market, but he did make it clear the Italian paper company had no intention of sitting on its assets.
"We want to be an important player in the United States," said Della Maggiora, who is leading an 11-person team from Sofidel's European operations to integrate Cellynne Paper Manufacturer into the corporate family. "We don't joke."
Della Maggiora spoke to The Ledger less than three months after Sofidel, Europe's second-largest manufacturer of toilet paper and other tissue products, completed the purchased of the Haines City-based private company, in late August. Terms of the sale were not disclosed.
Cellynne -- which also has plants in Green Bay, Wisc., and Henderson, Nev. -- represents Sofidel's entry into the U.S. market. The Italian company is in the process of renaming Cellynne to Sofidel America, a process that should be completed next month.
The company also is searching for a new chief executive officer, which it hopes to hire by early next year, said Della Maggiora, who is the chief financial officer of the parent company, Sofidel Group. Once a new CEO is on board and the transition complete, Della Maggiora will return to the corporate headquarters in Porcari, Italy, this spring.
Cellynne's former owners, Marc Allegre and Patrice Minguez, will remain with Sofidel for two years.
The Cellynne purchase represented a modest addition of 70,000 metric tons of tissue manufacturing capacity to Sofidel's annual capacity of 1 million tons, according to Sofidel's website. Cellynne's location, not its size, made the deal significant.
"For sure Cellynne will be a foothold for us on the American market, and to be a true multinational company, you have to be in the U.S.," Luigi Lazzareschi told Tissue World Magazine in its October-November issue.
The U.S. is the world's largest market for tissue paper products, which also includes facial tissue and paper towels and napkins, with annual per capita consumption of more than 48 pounds per person, the magazine reported.
Three U.S. companies -- Atlanta-based Georgia Pacific, Kimberly-Clark of Dallas and Procter & Gamble in Cincinnati -- dominate the domestic market with more than 5 million metric tons of annual production capacity representing 61 percent of total U.S. capacity, according to the magazine's website.
If the past is prologue, the big three can't afford to take the new competitor lightly.
Giuseppe Lazzareschi, the current CEO's father, and Emi Stefani started the company in 1966. For the first two decades, Sofidel operated plants only in Italy and sold in that market, with some exports in Europe. Della Maggiora joined the company in 1983.
Sofidel began expanding rapidly in 1994, when its annual production capacity was just 140 metric tons, with the construction of a plant in France as part of a new subsidiary there.
Today, Sofidel has 28 plants among 28 subsidiaries in 13 countries from the United Kingdom to Poland, Greece, Turkey and the U.S. It employs more than 4,800 people, including 300 former ?Cellynne employees, and has annual revenue of about $2 billion.
Sofidel's growth stems from the company's philosophy of locating production close to its customers because of the high cost of transportation in Europe, Della Maggiora said. That's one factor that made the Cellynne purchase attractive.
"Florida is an important state with 19 million people," he said.
Another factor was the quality of Cellynne's machinery, the oldest of which was installed in 2006, Della Maggiora said. It's manufacturing technology is close to that of Sofidel's European plants.
Luigi Lazzareschi agreed in the Tissue World article.
"We believe that, in general, the quality of tissue making assets in the U.S. is very poor compared to Europe and Asia," he told the magazine. "Cellynne is one of the few small to medium-sized companies in the U.S. that has assets that are up to Sofidel standards."
One key difference is that Cellynne sells in the private-label and away-from-home markets, which includes commercial cleaning companies and institutional buyers, such as schools, hospitals and government agencies. Brands, such as Kimberly-Clark's Kleenex and Georgia-Pacifics Quilted Northern toilet paper, comprise 80 percent of U.S. sales.
Sofidel's flagship brand is called "Regina," available in many European countries, and it has other regional brands.
Della Maggiora and Lazzareschi agreed Sofidel officials must first become familiar with the U.S. market and consumers before attempting the very expensive task of launching a new brand.
"We are going to push an expansion plan to take market share with (a) private label. We think it is easier for a newcomer to start with (a) private label in the U.S. now," Lazzareschi told Tissue World.
"This will be our first step, and what our future steps are is very difficult to say. First we have to get integrated into the market and get acquainted. For the future, I imagine Sofidel's growth will be much more in the U.S. than in Europe."
[ Kevin Bouffard can be reached at email@example.com or at 863-422-6800. Read more on Florida citrus on his Facebook page, Florida Citrus Witness, http://bit.ly/baxWuU. ]
(c)2012 The Ledger (Lakeland, Fla.)
Visit The Ledger (Lakeland, Fla.) at www.theledger.com
Distributed by MCT Information Services