With continuing decline of printing and writing papers, the company has dramatically broadened its service structure
and expanded its product line for the tissue sector
Headquartered in Memphis, Tenn, USA, since its inception, Buckman in 2016 entered its 71st year as a key specialty chemicals supplier to the global pulp and paper industry. The company, today with more than 1,500 employees and five operating regions – in North America, Latin America, Europe, Africa and Asia-Pacific – began operations in 1945 as a self-described “50-gallon process vessel company.”
In addition to pulp and paper, the 2016 Buckman currently serves 13 other major industries around the world – leather, power and utilities, sugar and ethanol, oil and gas, food and beverage, mining, metalworking, coatings and plastics, recreational water, steel, biofuels, fiberglass and agriculture. In North America, Buckman’s headquarters operation in Memphis includes a manufacturing plant, as do its locations in Cadet, Mo., and Vaudeuil-Dorion, Que., Canada. It also has manufacturing plants in Mexico, the Southern Cone region (Brazil/Chile/Argentina), Europe, South Africa, Singapore and Shanghai.
One of the company’s key business areas within today’s paper industry is the global tissue sector. Tissue has become an increasingly important segment for Buckman in recent years, and the company has responded with a dramatically broadened service structure and an extensive, expanding line of products and technologies for the tissue sector. Currently, the company provides advanced dryer adhesives, unique film modifiers, and coating extenders that increase the quality and speed of manufacture for TAD, conventional and hybrid structured tissue machines. It also offers on-site collaboration and customer-specific support that mills need to not only address emerging challenges, but also to capitalize on new opportunities.
To take a closer look at Buckman and its tissue operations in particular, TAPPI President and CEO Larry Montague and Tissue360o Editor Ken Patrick recently visited Buckman in Memphis, meeting with seven of its key experts in the tissue arena, including Steve Buckman, chairman of the board, and Kathy Buckman Gibson, president and COO. Discussions examined company structure and organization and also explored the current state of the tissue industry, including technology trends and emerging developments.
Also participating in the discussions were: John Stitt, Global Specialist Tissue Systems and Creping; Davor Mehes, VP, Global Paper Market Development; Mark Christopher, Global Market Development Manager Tissue; Lela Gerald, VP of Global Marketing; and Daniel Glover, Technology Director- Pulp & Paper. Their input to
the discussions is included in the
STRUCTURED FOR TISSUE
As Mehes explains, Buckman’s support of the tissue business is carried out via a three-pronged matrix approach – globally, regionally and by customer.
The company’s Global Tissue Workgroup is led by Christopher, who is a member of the Global Paper Market Development Department. The Global Tissue Workgroup is comprised of local operating company tissue specialists and coordinators, and it is responsible for supporting implementation
of the global tissue strategy and driving market development.
Each of the operating companies has a local tissue marketing plan that is implemented by the local tissue coordinator, usually via a local “tissue team.”
The customer prong of the matrix involves the support of Global Key Corporate Accounts (GKCAs) through customer specific teams. They focus on accelerating the spread of innovative Buckman product and application technologies to those customers.
According to Christopher, “a big part of global tissue growth is related to demographics. As the middle class continues to grow and the economy continues to improve in areas like South America and Asia, there is a related, built-in demand growth for tissue. Eucalyptus based production has dramatically shaped the industry in South America and is continuing to change just about everything related to pulp and paper in much of the world.”
Most of the tissue mills in South America didn’t go through the same raw material or production technology evolutions as did their counterparts in North America and Europe, Christopher points out. Many of today’s mills in South America, for example, started with a high eucalyptus content product from day one. Because of that, the industry there began at a very high quality level, which only grew with the installation of new crescent former technologies from the onset. With this combination of quality assets and raw material, the average quality level of South American tissue products is very high.
Tissue market growth here and in Europe is more measured and balanced. In North America and Europe, the purchasing demographic is split between quality and value, Christopher continues. The tissue making capacity in North America is geared more toward high quality and structured types of assets, while in Europe, they are mainly light dry crepe driven. The new Hybrid structured machines like ATMOS and NTT are starting to gain acceptance in Europe. If the initial investments are successful, we can expect that trend to continue.
Also, there is a very small paper towel market in Asia, where the primary markets are currently for bath and facial tissues. But the industry there, Mehes and Christopher note, is still somewhat in its infancy and is expected to rapidly escalate and broaden into other grades, including towel, in coming years.
There likely will be no short-term change in India for several reasons, Christopher says. “First, culturally there’s not much demand at this time (no market) for more tissue products. Second, Asian companies are exporting into India aggressively. “Although the market is small, we have good customers in the region of India, Pakistan and Bangladesh.
NORTH AMERICA vs ASIA
Mehes and Christopher see Buckman’s focus in Asia intensifying and increasing over the coming years, compared with, say, North America. They point out, however, that Buckman is still expanding its market share in North America and will continue to do so going forward.
“What we’re seeing is a race to have softer, more flexible, more absorbent products in North America. We’re focused on supplying products that help domestic producers compete regardless of their manufacturing technology – be it TAD, hybrid structured or conventional. If you’re a light, dry-creped type of organization and you want to compete with the hybrid structured tissue products, you’re going to have to do some things that deal with that, and that requires pushing those processes to their limits. We help them do that,” Christopher points out.
“Asia is very price focused,” he continues. “There has been a tremendous amount of capacity brought online, but now there are reports of utilization rates dropping below 85 percent in some cases, and some of our major customers are indicating they will curtail production this year. We see that market staying in an over-capacity situation for quite a while, and this is going to continue to put pressure on prices.
“The market dynamics for our customers are different in China. In North America, the retail supply chain is highly consolidated with a significant private label volume. In China, the retail supply chain is completely fragmented, and no significant private label market exists. Manufacturers must be prepared and capable of reaching into all corners of the market directly. They employ huge direct sales forces to accomplish this,” Christopher explains.
Like India to some degree, North Africa is also “a long way out,” Mehes and Christopher emphasize. There are few projected investments there, and what they currently have are very old and limited assets, they explain. But the Middle East is expanding and investing heavily. Investments there have really taken off in the past 15 years. The big seller in the Middle East right now is facial tissue, but bath is catching on also. Turkey has become sort of a gateway. It is culturally diverse, with a significant Middle East background, and they can do business in all of the countries around them.
Glover adds that in developing counties like India and China and even in the Middle East, the last market segment to get onboard is paper towels. “They generally start with bath tissue or facial, and then eventually go into the towel market. So hybrid machines that are primarily used to make paper towels are not going to find a big market in China or India right now. That higher technology is more of a first or second world market at this time. There will be a few hybrid structured machines sold in these areas, but it likely will be five to 10 years before these technologies start to dominate there,” he says.
Changing with the Times
Steve Buckman, CEO, explains that when his uncle started the company, he was very focused on serving the paper industry. He developed one of the industry’s first microbicides, and for years afterward, “that’s very much what we were focused on, selling microbicides, and then deposit control. We were very successful, but then the paper industry started to change.”
The industry wanted to start a new quality movement that included single source suppliers, “and that put us in a hard position because we hadn’t really worked to be a sole supplier to the paper industry,” Buckman says. “We had to make the decision whether we were going to compete, and my position was that, yes, we are going to compete, and we can be a sole supplier and have a full product line for the paper industry. Making that decision, however, meant that we had to broaden our product line substantially – and our applications expertise, as well.
“We kept pushing ourselves forward. We made a lot of alliances with other suppliers that were in a similar position, i.e., they didn’t have a whole line of products. We always took the position that it has to be Buckman selling to the paper industry, and over time we built the applications expertise and R&D so that we could actually make the products we sell. Like in tissue, 20 years ago we had nothing for yankee coating, but through our R&D efforts, we were able to develop our own product line. That was the foundation that we laid, that over time the company had to adapt and modify itself. If we hadn’t taken that attitude, we wouldn’t be Buckman today,” he notes.
Then, in recent years, some rapidly developing trends began impacting the paper industry. As the “digital evolution” progressed over the past decade or so, newspapers and newsprint demand began to decline. Printing and writing papers, although not totally disappearing, were no longer a major growth sector in most of the world. “We had to decide where to focus our efforts,” Buckman says, “…where are the growth sectors now going to be? Of course tissue and packaging were the eventual answers, and the pulp industry also is still very much alive. Because we have been able to shift our focus, we’ve maintained good penetration in all of these areas.”
In the tissue sector, the yankee dryer is today a key process piece for Buckman. “But really, everything on the machine – and making sure the sheet stays clean and in-spec before it gets to the yankee – is still an important part for us. We’re going back and doing a lot of work with pulp mills now – fiber modification with enzymatic technology, for example, to be sure they can substitute different pulp sources and still have a good tissue feed. We don’t make the enzymes, but we work closely with those who do to find unique uses for them in the pulp and paper industry.
“In the paper industry, enzymes were one of the big new things about 20 years ago, but they never really took off. We stepped back and asked why not? We determined it was because they weren’t able to stabilize enzymes so they didn’t lose activity before they got to the pulp mill and paper machine. However, we were able to develop technology to stabilize the enzymes so they didn’t lose their activity before actually being used. Accomplishing that has been a major break-thorough and has benefitted pulp and paper mills significantly,” Buckman points out.
Buckman today is dramatically different from what the company was in the 1980s and 1990s. “Then we were very specialized along new product lines – very deep knowledge of a very specific area. It was a major shift for us when we said we are going to be a sole source supplier, and we are going to figure out how to do it. That changed us significantly. By enlarging our knowledge base, we are now able to look at the whole paper machine.
“Sustainability has always been a major driver for Buckman. Early on, we didn’t call it sustainability because no one had a name for it. In the 1950s and 1960s, for example, we had a very good product. The only thing wrong with it was being mercury-based. As we went forward with the company, we could have just said, well, mercury is mercury, and we will sell it until someone tells us we can’t. But we didn’t do that. We started working on a compound that could replace mercury. We brought that product line in well before regulations forced us to stop using the mercury-based product. Sustainability is also why we got into enzymes. We looked at it as a greener technology.
“Today our market share within the paper industry is still relatively small. But there’s lots of room there – lots of customers, and lots of paper mills that aren’t our customers. We’re very optimistic about just how much we can continue to grow in the global paper industry. We’re constantly developing other industries that we are getting into, but paper will always be one of our mainstays, because we see the growth there – especially in tissue and packaging,” Buckman concludes.
Three Periods Defined by Three Leaders
Buckman’s President and COO Kathy Buckman Gibson says that “The way I look at our history, we have had three distinct periods defined by three leaders – my grandfather, my father, and now Steve Buckman. It was amazing what my grandfather was able to do in terms of growing and building this company over time. From being a Memphis-based organization selling to the U.S. paper industry, we began doing business with Canada almost overnight, and it wasn’t intentionally – it was because our customers liked the product.
They were knocking on our door.
“I give grandfather a lot of credit because he’s the one who took us global and really pushed the envelope in that regard. In the early years of the company, my grandfather and grandmother traveled extensively around the world, in 1948, 1949 and 1950, which means they had to stop in Greenland because they didn’t have a plane that could go from here to Europe at the time (non-stop).
“My grandfather had this spirit about him to go beyond existing borders and redefine the box as far as what we could do as an organization. During his lifetime, we established Europe, Canada, Mexico, Brazil, and South Africa. The key area that he didn’t cover in his lifetime was Asia. But he gave us that important ‘global footprint’ at the time. He liked to have his hands in everything, but could only go so far.
“When my father took over, he knew he needed to let go and let the company operations around the world grow their businesses, and he gave them a lot of license to do that. And they did. Another important thing, he recognized that our ability to grow was dependent on our interface with the customer, and that we needed to have a well-qualified sales force in the field. He grew the company so that we were 50 percent or more field associates. That moved the company from an R&D/manufacturing-focused organization to a customer-focused organization. He was still chairman of the board and CEO when, about the time he was retiring, he helped push us into China. I worked on the China project, setting up a company in China, and then manufacturing.
“I think Steve Buckman’s legacy is going to be that he inherited an organization that was fairly loose in terms of the way it operated. A key question he worked to answer was how do we operate as a global organization consistently across boundaries? That’s no small feat. It’s one thing to say it, and a whole different thing to make it happen. That, I think, is going to be his legacy in that we now operate very consistently around the globe.
“Our people reach out to our global production resources and we share information and knowledge, unlike any of our competitors. Today, I will look any customer in the eye and say that we may be smaller than our competitor, but we bring to the plate our entire global organization, to which you will also have access. I think the knowledge sharing culture that my father helped create and what Steve has done in terms of the Buckman Way, and how we consistently interface with customers across the globe, paints a picture of our organization today,” Gibson explains.
Buckman, she adds, entered the tissue sector in 1990, with little or no expertise in tissue technologies and no tissue related products. In 1994, the company made the strategic decision to focus on three global markets and serve them across the globe as part of the effort to be consistent in interfacing with its customers. Buckman also was going to be a full service chemical supplier, meaning that it was going to supply the product and expertise needed for specialty chemicals across the board. That meant it was going to get very serious about the tissue segment.
“It was somewhat fortuitous, but at that time John Stitt, who had been working at Kimberly-Clark, was in town and was looking for a new job….and we were looking to get into the tissue segment,” Gibson says. “John had roots with us and Memphis, having worked here before. Also, his father, Bill Stitt, was our first sales person. In fact, in the designation for our first product, BSM 11, the B is for Buckman, the S is for Stitt, and the M is for Meals, our first scientist. We had to convince John to come back to Buckman and help us create a tissue segment of our business. Fortunately for us, he agreed to do so, and has been with Buckman since then.”
Today, the three focus areas for Buckman are pulp and paper, water, and leather. “We are the only global competitor that started in paper and continues in paper today. Paper still represents about 50 percent of our business. We’re very committed to paper, and tissue is a significant portion of that segment,” Gibson concludes.
Understanding the Marketplace
Lela Gerald, VP of Global Marketing
Lela Gerald, VP of Global Marketing, explains that her group has a dual role of understanding and communicating with the marketplaces. In addition to marketing communications, it also produces the Buckman sustainability report, which as Gerald explains, grew out of a “natural culture” that has always been a part of Buckman. “We just started reporting on it, and these reports evolved into today’s sustainability report. We set some goals in 2010 to reduce our energy consumption per ton of production, our water usage, and our CO2 emissions by 15 percent by 2015. We actually met or surpassed several of those goals in 2014, and now we’re looking at where we want to go with our next set of goals, beyond 2016.”
Water use, Gerald says, is becoming as important as emissions. “Even in the U.S., water is in the news more and more these days. The farther you go west in this country, the more water becomes an issue, and in other parts of the world it’s an incredibly critical resource. For paper mills around the world, there is no longer an infinite supply of influent water, as there once seemed to be,” she emphasizes.
Green chemistry is hard to define, Gerald continues. We try to follow FDA rules about calling something ‘green’ or ‘sustainable,’ which is essentially that nothing is truly without environmental impact, but it can be greener or more sustainable. Our R&D process requires that each version of a product be more sustainable than the one before it. “This can mean that it delivers more sustainable effects for the customers, or it can mean that we produce it more sustainably – or both,” she explains.
Gerald notes, “One of our biggest challenges is still the lingering misperception by some that we’re just a biocide company. We’ve been a full-service provider for years, and today we are one of the top three suppliers for the tissue industry globally. We are no longer a small biocide company.”