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A Strong Family Business Perseveres
BY GRAEME RODDEN
This article is from the most recent issue of Tissue360°, and is offered here for Ahead of the Curve readers who may have missed it. To view the entire issue, visit https://www.tissue360-digital.com.)
Although Guatemala may not be the first country that springs to mind when papermaking is discussed, for the Corzo family, it was their home and where the patriarch, Juan Corzo, established Papelera International (PI) in the 1970s.
Unfortunately, a severe criminal act forced them to move from their native land. But the family has found success in the US with its South Florida Tissue Paper converting business, and there are high hopes for expansion.
Son Juan Corzo, Sr. is now CEO, while the third generation, Juan Corzo, Jr., is vice president. Juan Corzo Sr. explains how the company evolved. "My father was an electrician for Boise Cascade in Guatemala. He started with the company when he was 15 years old." At the time, Boise was converting and brokering P&W as well as packaging grades in Guatemala. During his career with Boise, the elder Corzo was sent to the US to learn English. Even then, he saw the opportunity in tissue, so he established PI as a producer and converter. His son also started his career in the paper industry at age 15, working with his father at PI.
When his father started a new career in banking, Corzo, Sr. (hereafter referred to as Corzo) took over PI. The story takes a terrible turn in 1996. "I was kidnapped along with my youngest son for ransom reasons. I was held almost a month and my son an extra five days. In that time they cut off my ring finger and sent it to my home to prove that they had me."
After the ransom was paid, the two were finally freed, but the story does not end there. "After I was freed," Corzo explains, "the government kept asking my father if I knew more about the kidnappers."
It seems the gang also kidnapped a friend of the president. Corzo had an idea where he had been taken when he was kidnapped, and from this information the government was able to free the victim and arrest 15 of the kidnappers. "I testified against them. After that, it would have been very dangerous for my family in Guatemala, so we moved to Florida."
The Corzo family decided to stay in the tissue business and established South Florida about 20 years ago. Papelera International was sold to Canadian-based Kruger about 10 years ago.
"I started the same way as my father," Corzo adds, "brokering P&W grades from the US and Canada and converting tissue at the same time."
However, with the decline in graphic paper markets, South Florida Tissue decided to concentrate on converting tissue. The company's first site was a 40,000-ft2 facility it purchased in Miami. When Juan Corzo Jr. joined the business "he pushed me to move here (north Miami) and buy a 100,000-ft2building to house the growing business," said Corzo. Because of its continuing growth, the company also rents a building elsewhere in Miami. South Florida Tissue Paper also has a converting facility in the Dominican Republic.
The Corzos also looked at Houston because it was already brokering some paper there, but Miami was a natural choice for the family to establish itself, as it had vacationed there many times and, with the large Latin American community, culturally it was also a good fit. Of course, business considerations were important. It is close to the Caribbean, where South Florida markets a lot of tissue. And, the population growth rate in Florida—from domestic arrivals and immigrants—is one of the country's highest.
"The tissue market is constantly growing," says Corzo.
At its Miami facility, South Florida Tissue Paper converts jumbo rolls it buys from mostly domestic suppliers.
The company converts about 800 metric tons monthly, but growth forecasts for 2018 were 55 percent. South Florida Tissue Paper has been listed in INC. Magazine for three consecutive years as one of the fastest growing private companies in the US.
South Florida Tissue Paper converts jumbo rolls it buys from about six suppliers, mostly domestic. Its main market is away-from home (AfH). It makes two-ply bathroom tissue (96 count, jumbo, and coreless) and towel (folded and rolls). The Dominican Republic facility also makes some napkins.
Corzo notes another important factor that distinguishes South Florida from many of its competitors. "A long time ago, I noticed that most AfH products had simple embossing. We upgraded to decorative embossing. This is unique to AfH and we can provide a superior quality."
The majority of its production is private label, although South Florida Tissue Paper also has its own brands: Excellence (bath, towel); Soft (bath); Elite (bath); and Tornado (bath, towel).
Corzo Jr. says, "Our strength is not retail; it's AfH, but we hope one day to be in retail."
The company's products are sold mostly through distributors and can be found in airports, hotels, restaurants, universities, government buildings, educational institutions, and stadiums. It should be noted that some South Florida Tissue Paper's products, mostly the Soft and Excellence brands, can be found in small supermarkets in the Miami area.
Revenue is about $1.15 million monthly. Florida accounts for 70 percent of the company's business. About 20 percent is distributed elsewhere in the US, mostly the Southeast. The remaining 10 percent comes from Latin America. South Florida Tissue Paper now employs 65 people.
"When we started, we were about 90 percent Latin America," Corzo says. "This was because it was the market I knew. It was also a cultural issue. I was more comfortable there. My son is more comfortable in the US."
Corzo Jr. takes up the story: "The past four years have been when we really took off in the US. After we moved to this building, we experienced 150 percent growth.
"We don't really focus on Latin America now. Our aim is the US. We have gone through a lot of changes in the past four years and we have targeted growth across the US."
The Miami site houses five converting lines: bathroom; bathroom jumbo rolls; center-fold towel; multi-fold; and hard-wound towel. The company makes its own cores. There is a variety of equipment from suppliers such as Italo (now PCMC), Valley Tissue Packaging, and Edson. The building has 16 truck bays: seven for incoming jumbo rolls and nine for outgoing finished goods.
Upgrades are in the works. The hard-wound towel line was to be replaced with a newer, faster machine in January. The company has similar plans for the No. 1 bathroom tissue line this spring.
What does the future hold? Corzo Jr. says the company is continuing to work to expand its business and improve operations, and he believes they are on the right path, citing the INC. Magazine listing as proof.
"In the near future, we still see working with distributors to send our products," he adds. "We have picked up some national accounts through our distributors."
He notes that South Florida Tissue Paper does service some southwestern states directly. "As we grow, we would like to be like other converters and open sites outside the Southeast."
What about the biggest jump—to become a producer?
"Before we entertain any thoughts of being a manufacturer, we'd like to establish another large converting site in the US," said Corzo, Jr. "Ultimately, the objective would be to open a mill, however that's a long-term project. But, the family does have years of experience making paper."
Grame Rodden is editor of Tissue360° and a senior editor with Paper360°.
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