Converter Can't Seem to Stay Out of Business
- Published: May 01, 2000, By Edward Boyle, Contributing Editor
When Robert Curran sold his three label companies in 1987, he figured he was out of the converting business for good. Today, he not only owns a folding carton business and a prepress operation but another label company as well.
So, just where did his best-laid plans go "wrong?"
Curran explains that he had been retired from the label business for about five years when his youngest son, who had worked for a major corporation, approached him about the possibility of starting another company.
They chose the carton area, says Curran, because of his printing background and the growth potential of the market. The company they founded was Carton Master, located in Hamilton, OH.
"We didn't expect to do anything but cartons when we got into it," Curran reports, "but our background really was in labels. And, the type of technology that we were using for cartons also fit well with labels. So that led to the birth of Spectra Label."
He adds, "These carton companies were already buying labels, so we thought they could buy them from us using the same technology and have the same look on their label and carton. We felt that this was a good fit."
Like many printers, Curran initially opted to have his prepress done by an outside contractor, but by 1997 concern about turnaround times led him to establish yet another company, Vista Graphics. This subsidiary met the prepress needs of Carton Master and Spectra Label. Together, the three companies are officially known today as The Stratus Group.
Tough But Worth It
Success was hard-earned. The first company, Carton Master, was launched in mid-1992, but the startup wasn't as smooth as he would have liked, notes Curran, because of a steep learning curve, particularly in the area of folding and gluing, something he obviously hadn't been concerned about when producing labels.
Quips Curran, "Ignorance was bliss, because we didn't know what we didn't know!"
As a result, he cautions the growing number of label converters that are venturing into the carton business to do their homework. "It's a bigger challenge than some people would have you believe, and we're still learning," says Curran. "The technology is great, but it's not like falling off a log."
Curran says that dealing with a "single" converter with such diverse capabilities is appealing to a growing number of end-users as they themselves try to reduce the number of vendors they utilize.
"Another benefit we offer our clients," he notes, "is the ability to produce multiple items and proliferate their brand. For example, many food product companies used to have just one flavor. But the company wanted to appeal to people with other tastes or needs. Today, you may see as many as eight different flavors of a company's brand.
"Companies like this have a new challenge," notes Curran. "Since they now have eight products, not just one, they have less volume for each product. This means a client might want 20,000 of one type of label, 40,000 of another, 30,000 of a third, and so on. Our company can do that for them."
Employee Philosophy Pays Off
Curran says that while he did attract some customers for whom he had worked with his original label company, most of his clients today are new. The same goes for his 50 employees, who are largely cross-trained to work at each of the three companies, which are actually housed under the same roof of the 25,000-sq-ft facility.
"They move through the chairs," Curran says of his versatile employees. "They are cross-trained so they know not only one job, they also know another, and maybe another. That in turn enables us to pay top wages, hopefully more than they can make anywhere else, so we have low turnover. That helps us be more profitable, and consequently allows us to pay those higher wages. It's a win-win situation for everyone."
The Stratus Group as a whole expected annual sales in 1999 of nearly $10 million, a far cry from first-year sales of $80,000 just seven years ago. All three businesses are focused on four target markets: personal care, food, pharmaceuticals, and industrial. The company's sales have come largely through a nationwide string of brokers. But with what has been a company trait, sales, too, are expected to gradually come in-house.
Equipped for Quality and Stability
The Stratus Group operates three Arpeco presses, one of which is dedicated to labels, one to folding cartons, and one that can deliver both. Curran says he chose Arpeco as his sole press source for its quality and durability. (Press details are proprietary.)
The carton press operates 24 hours a day, approximately 300 days a year. "It takes a beating," says Curran, "particularly in the flatbed die-cutting area. We appreciate those Arpeco presses, because of the quality and stability of the equipment and the quality of the product we can produce on them."
Curran also stresses quality in the materials, inks, and auxiliary equipment that go on those presses. The company runs an Arpeco slitter/rewinder in its label business and an International folder/gluer in folding carton production.
The Stratus Group purchases cutting dies from RotoMetrics and Atlas; anilox rolls from Arc Intl. and Harper Corp. of America; inks from Environmental Inks & Coatings; coatings from Flint Ink; label stock from Fasson; and board from Westvaco.
Growing Comfortably
The company has grown a robust 30%-40% in each of the past three years. "As a small entrepreneur and not having the money that a lot of companies have to invest in people and equipment, we have measured our growth and tried not to bite off more than we could chew in any one area," stresses Curran.
"For example, when we started the prepress department, we did plates first, then added the Macs and got into design. It's been a gradual evolution in all areas, and we are quite comfortable with it."
Curran expects that future growth will come from expanding target markets, adding increased digital technology, and perhaps getting into wider web widths. The company has even produced some flexible packaging, "but that's not something that we go out and market everyday."
But, says Curran, if his customers demand it, "we'll deliver it." After all, that's the attitude that has brought the business this far.
Supplier Information
Arpeco Engineering Ltd., Mississauga, ON, Canada; 905/564-5150; arpeco.com
International Machinery, Alpharetta, GA; 770/442-9264; intermach.com
RotoMetrics, Eureka, MO; 800/325-3851; rotometrics.com
Atlas Die Inc., Elkhart, IN; 574/295-0050; atlasdie.com
Arc Intl., Charlotte, NC; 800/526-4569; arcinternational.to
Harper Corp. of America, Charlotte, NC; 704/588-3371; harperimage.com
Environmental Inks & Coatings Corp, Morganton, NC; 828/433-1922; envinks.com
Flint Ink Corp., Detroit, MI; 313/538-6800; flintink.com
Fasson Films/Avery Dennison, Painesville, OH; 800/828-0122; fasson.com
Westvaco, New York, NY; 212/688-5000; meadwestvaco.com
