Left to right: Michael Nowak, president, CEI; Andrew Austreng, manager of bag operations; and (seated) Louann Mueller, VP of manufacturing.

In the hit television show “The Office,” the fictional paper company Dunder Mifflin struggles to stay afloat in an increasingly digital world, where the need for actual paper is declining. At first glance, Dunder Mifflin doesn’t have much in common with the real-life specialized flexible packaging manufacturer, Wisconsin-based Coating Excellence International (CEI).

Aside from the obvious difference—that one company is real while the other is made up—Dunder Mifflin is floundering while CEI is thriving. In one episode of “The Office,” Dunder Mifflin creates its own local TV advertisement. Ironically, the sales pitch in the ad is the promise: “Limitless paper in a paperless world.” While this is tongue-in-cheek for Dunder Mifflin, it rings through sincerely with CEI. One look at the company’s warehouse reveals, indeed, limitless rolls of its printed paper products. And that’s just the beginning.

Founded in 1997 by the company’s current president, Michael Nowak, and now retired William Arndt, CEI has grown from its initial staff of 15 employees to more than 400 today. The entire CEI facility, including business offices, warehouses and manufacturing sites, stretches for 600,000 square feet, near the small rural community of Wrightstown, Wis. The company owns 30 acres of land, so if business keeps expanding as rapidly as it has been, there is plenty of room to grow—and grow it has. Sales in 2007 were $156 million, a healthy increase from 2006 (CEI usually sees about 20% growth per year).

Rapid growth is certainly a good thing, so long as the proper measures are in place to ensure that growth doesn’t spiral out of control.

“The biggest challenge has been building the infrastructure that supports the people on the production floor,” says Nowak. “When we started the company with 15 people, we all knew each other, we knew who the operators were, we knew who had what type of experience and we knew we had a good product going out the door. The bigger you get, you can’t know everyone personally any more and you have to rely on training and consistent procedures.”

All that's fit to print

As part of its flexible packaging for food operations, Coating Excellence manufactures bags for store-brand cookies. Here, Eric Witt uses a rewinder to prepare the cookie bags for shipment.

When CEI started up in 1997, it operated primarily as an extrusion company that concentrated on polycoating and poly-laminating paper substrates. After good growth in that arena, CEI started looking into package printing to support its ream wrap business. In January 2000, CEI installed an eight-color flexographic press. After many expansions, CEI now has eight high-quality flexo presses and can offer services such as adhesive lamination, extrusion lamination, woven bag making and up to 10-color printing (including the ability to backside register print).

As the company has expanded its printing business, Louann Mueller, vice president of manufacturing, says the company has prided itself on being a world-class printer, with the most modern presses, automatic video detection, excellent color consistency, and in-house graphics and plate making. CEI’s printed products include the paper used to make artificial sweetener pouches, ream wrap, food pouches, movie theater popcorn bags and many others. Printing customers include Boise (Office Max Designs and others), Domtar (Office Depot and others) and Georgia Pacific.

One of CEI’s most impressive operations is the printing job it does for Sweet ’N Low artificial sweetener. The company prints a whopping 1.5 billion Sweet ’N Low pouches in one month, for a total of 18 billion per year. The paper for the Sweet ’N Low pouches comes from Boise Paper. From there, CEI prints the pouches and applies protective coatings. Cumberland Packing Corp. takes care of the rest.

CEI is able to print on a variety of different substrates including film, coated film, film-to-film laminations, coated foil, foil-to-film laminations, foil-to-paper laminations and coated non-wovens. The company boasts 8-or 10-color process printing capability, using only water-based inks. CEI prefers to use water-based inks for environmental reasons and employee safety. Nowak says water-based inks eliminate emissions from volatile organic compounds (VOCs), and are safer compared to the danger of explosions on the press with solvents.

According to Mueller, the printing business is successful because CEI exercises a high degree of control over the process. They do this by “investing in state of the art technology, utilizing the newest technologies available,” says Mueller. “We hire highly skilled people. We do all of our prepress graphics including plate making in house. We can take any design and customize it for our presses and get exactly the look the customer wants,” explains Mueller.

CEI’s printing business has grown in large part because the company has managed to improve efficiencies to compete with rival printers in Korea and other parts of Asia. Part of CEI’s efficiency is a result of having some of the newest equipment for a given application on the premises.

“A lot of people start a plant like this, and they buy used equipment. We were fortunate in that we were able to buy all new equipment,” says Nowak.

Investing in new technologies pays off in quality and efficiencies. Luckily, CEI has been successful at convincing investors of the importance of new machinery and equipment. Another financial factor in CEI’s favor is that sourcing from local suppliers helps keep transportation and service costs lower.

It's in the bag

CEI’s newest business is its bag-making operations, which it started in 2006. Bag making now encompasses 20% of the company’s business. For CEI, the decision to enter the bag-making market was a logical one.

“The U.S. woven bag market was growing very fast and customers were indicating they wanted a domestic supply,” says Nowak. “There are three basic steps to produce a bag—print film, poly laminate and make bags. CEI is expert at film printing and poly laminating. CEI needed to learn bag making. However, the current U.S. bag makers who had not made woven bags knew bag making but not film printing or poly laminating.

“Therefore, we felt we were in a good position to be competitive in the market.” The company’s bags are used in a number of different markets, including bird seed, agricultural products (that is, horse/goat/pig/poultry feed), pet food, lawn care products, food products and more. Some of the most visible products that use bags made by CEI include Kaytee’s bird seed, Malta horse and pet foods, and TizWiz horse feed.

The bags business has also earned CEI top awards. Accolades include the 2007 Benny Premier Print Award for Kaytee Bird seed; the 2008 Flexible Packaging Association award for Super Tube (used for such products as Tiz Wiz Horse Feed); and the 2008 Flexographic Technical Association’s “Best of Show” for a Malta horse feed bag.

Location, location, people

CEI employee Reed VanderBloemen supervises the lamination of woven horse feed bags on one of the company's new extruders.

Coating Excellence owes much of its success to its location in rural Wisconsin. Wrightstown has a population of approximately 2,600 and sits on the bank of the Fox River. While Wrightstown itself is tiny, its proximity to bigger hubs such as Green Bay, Appleton and Oshkosh keep it far from isolated. Though rural Wisconsin is synonymous with the dairy industry it supports, it’s also a hotbed of manufacturing. Wisconsin ranks as the United States’ second largest manufacturing state, second only to Indiana.

Nowak says his part of Wisconsin is ideal for a flexible packaging manufacturer because of the wealth of resources already in place. CEI benefits directly from the concentration of paper mills and flexible packaging plants in the area, such as International Paper, Kimberly Clark, Bemis and Georgia Pacific. The benefit is twofold: CEI can reduce its own costs by purchasing paper and other supplies close to home, supporting the local economy. And when the other plants inevitably restructure, CEI can take advantage of local workers who have experience in the paper and packaging industries.

“This is a prime area for people who work with rolled products—rolled paper, rolled film,” says Nowak. “It’s probably the highest concentration of printing in the country. Because of the paper and flexible packaging industry here, we have a lot of the support industries. People who make rolls, rebuild motors, and machine maintenance organizations. When we have an issue, we’re not down very long because we have all those support services.”

Nowak says his company doesn’t turn away inexperienced people because much of CEI’s equipment is so new that it would be difficult to hire anyone trained on it. CEI recruits employees from community colleges, as well as from local tech schools with good flexo printing programs.

“For well-trained people, this is a very good area to be in; it’s helped us a great deal,” says Nowak. “There are a lot of people who have worked with paper and film. As other plants shut down, that’s a source of people. A lot of kids worked in the plants, over summers, while they were in school. They can get some of the training. People coming in from farms are very mechanically oriented. Somebody who understands equipment and isn’t afraid of it.”

Around 85% of new hires have some level of press experience. But, because the company has grown so aggressively, says Mueller, CEI has had to make sure it has right training procedures in place. She says it can take 18 months to two years to properly train a press operator.

CEI has been successful in retaining its skilled workers. Mueller says the plant’s low turnover rate is key in running an efficient and productive facility. Crews work 12-hour shifts, and everyone works evening- and day-shifts on a rotating basis. Employees work a total of 42 hours a week and get every other weekend off.

Customization is key

One of CEI's first products was printing and coating ream wrap. CEI's warehouse houses rolls of Boise ream wrap awaiting rewinding for final shipment.

The rapid growth that Coating Excellence has achieved is also due to its ability to customize new solutions for its customers. Much of its new business and new customers come to CEI through old-fashioned word of mouth.

“We’ve had a lot of referrals. I believe that we’ve built a very good reputation, a good quality and service reputation. We’re known for being innovative. A lot of our customers come to us because our customers talk to other customers and recommend us. In addition, paper suppliers and film suppliers bring us business and we then use their product,” says Nowak.

When possible, CEI will purchase new equipment to suit the needs of a customer. But it assesses the capabilities of its existing equipment first.

“A lot of our growth has come from customers who have asked us to do more. Because we do a great job on one product they ask us to make different products,” says Nowak. “We’ll buy the right equipment once we figure out the best way to make it. Our machines are flexible. They can do a lot of different things. If a customer asks us to do something else, we frequently can make our current machines do it. But, if not, we look for the right equipment.”

Mueller agrees. “Our main goal is to help our customers by giving them quality products on time. We try to utilize our strengths, our world-class printing using water-based inks, extrusion coating. We look at our customer base. Customers say ‘Ever thought of doing this?’ Does [a given project] require printing, extrusion coating? They have asked us to convert things that we can do here. If we need equipment to do it, we add the new equipment.”

Green strategy

Coating Excelling International uses state-of-the-art printing presses to manufacture a whopping 1.5 million pouches of Sweet 'N Low artificial sweetener. Here, Dean VanDeHey checks the print quality of Sweet 'N Low packets.

Companies like Coating Excellence can’t be successful these days if their overall business strategy doesn’t have a clause for sustainability. Nowak says his plant does have a sustainability policy and employs a manager of sustainability who is working on implementing a more comprehensive policy. CEI is a member of the Sustainable Packaging Coalition and the Green Printing Partnership and has won awards from the state for its efforts. The company has also made a concerted effort to reduce the weight of many of its products.

Like other companies in the flexible packaging industry, Nowak says CEI is struggling with the definition of what it means to run a sustainable plant.

“The big unknown is: what’s the right thing for the environment? We’re grappling with what our policy should be in the long-term, what’s right for us and right for our customers.”

Mixed messages from others in the industry and from the media make it hard for companies such as CEI to focus sustainability efforts. Should a company accomplish this by working to reduce its carbon footprint? By using renewable materials? By using and producing biodegradable products and supplies? Companies have to decide which changes are trendy and superficial and which are meaningful.

“It is hard to have a coherent policy because we don’t have a clear goal of what helps the environment. We want to do something real. Do we build a green plant? Do we incorporate products that have been recycled? It’s just not clear,” says Nowak.

CEI also has the challenge of producing packaging that must be durable. Wasting the contents of a package is bad from a sustainability standpoint because spoiled product goes to landfill. Nowak says this is an issue with pet food bags. The high strength of the woven bag CEI makes prevents damage and reduces waste of the product inside.

At the beginning of its second decade in business, CEI is positioned to grow in all of its markets. Fortunately, CEI hasn’t been hit too badly by the economic recession affecting other manufacturers and industries. In addition to having a low turnover rate, the company has never had to lay off any employees. And with 250 to 300 active customers, there’s no reason for concern either. CEI’s commitment to customer service and its dedication to maintaining a safe workplace for its employees bodes well for continued success.

Visit CEI's website at www.coating-excellence.com