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A one-man gang takes on the paper Goliaths


By Arlene Boardman
Post-Crescents business/labor editor
Post Crescent April 24, 1983

Nichols - Bernard Dahlin is the general manager of the Nichols Paper Products Co. He also is the only outside salesman, the public relations man, the marketing man, purchasing agent. And the closest thing the company has to a vice president. A treasurer. He is also the owner and president of the Nichols Paper Products Co.

A little guy who's taking on the big guys, the Goliaths of the paper converting industry.

While so many companies, paper and otherwise, are merging into the security of a giant corporation, Bernard Dahlin is doing the opposite.

He bought Nichols Paper Products from Straubel Paper Co. in Green Bay and is venturing out in the competitive specialty paper products world on its own. With no consultants, no marketing department, no cadre of salesman covering the United States. Just Bernard Dahlin, 41-year old former building products store owner/operator, and 23 employees. Dedicated, hard-working, rural, full-of-the-work-ethic employees.

There are other small converters- companies that buy paper from mills and alter it in some manner to add value, like creping it, cutting it, gluing it together, printing on it. But none sitting in the middle of a small farming community where the only other comparably sized employer is a co-op.

The Nichols Paper Products Co. has been around since 1951 when Staubel Paper bought the old Jam and Jelly factory building. It operated as an autonomous company owned by Staubel Paper (because of the tax advantages in the early years) and only became a legal operating division in the late 1970's when it also experienced a growth spurt.

Since last December it has been, in a sense, on it's own. That's when Dahlin bought the land, building, equipment, inventory and the customer list for a price in the middle six-figures. The company has always has a singe purpose - to supply industrial companies with a variety of specialty paper packaging products in small quantities.

Dahlin hadn't even heard of the company in the spring of 1981 when he was liquidating his Green Bay business, Bilt-Well Components, a construction business that sold trusses and lumber and which he had owned since 1972. He had spent his working life in construction and he yearned for a business less sensitive to the economy.

"I wanted to get out of the construction industry because I'd seen the economy go up and down, up and down," he said. "I wanted to try something that I thought might be a little more stable."

So in late March he got out his 1978 Classified Directory of Wisconsin Manufacturers and started calling small converters throughout the state. He asked to speak to the owner or president and asked them if they wanted to sell.

He said he must have talked to 40-50 in late March and early April, and they all said no, including Straubel Paper. But two weeks after his call, a Straubel official called back and said they might be interested, and after meetings off and on, Dahlin agreed to take over as plant manager in September of 1981. He agreed with the logic of managing the plant awhile to see if it suited his interest and met his financial expectations.

Fifteen months later, he was convinced, and he and Straubel's owners came to terms. The plant was his.

An old brick and cement block building badly in need of a paint job. Twenty-five thousand square feet of floor space, including 7,000 feet of warehouse and 7,000 of basement for storage of roll cores, wax tanks and storage of parts.

He also got several pieces of small and relatively slow production equipment in the deal.

He got a 60-inch dry creper machine (about half of the big ones in the industry but one of the few dry crepers, which Dahlin said is more efficient than the wet ones).

He also got two sheeters, a trimmer, waxer, printer-rewinder, laminator and a variety of other pieces of equipment. They're not new but they do the job, and Dahlin said he's willing to get up to his elbows in grease to help his maintenance men keep them operating.

The company sells products for 100 or more uses, with about 25%-30% of its business being coil cover for industries shipping steel and aluminum coils. The cover is two circles of chipboard paper laminated together with a crepe skirting and a polyethylene liner. Diameters range from 28-68 inches.

The ultimate users of these? U.S. Steel, Alcan Aluminum, Kaiser Aluminum, to name a few.

Dahlin said his company is perhaps the only one with an inventory of Kraft, chipboard and linerboard.

"We're inventorying and using Kraft, chipboard and linerboard in our converting operation," he said.

Nichols Paper Products sells mainly through distributors, including Universal Paper Co. of Appleton. It sells in the eastern half of the United States, about 20 states, in which he has about 50 distributors.

Dahlin makes periodic sales trips. Last month he traveled to New York, Pennsylvania, Atlanta, Richmond, Va., and the Upper Peninsula, and this month he has been to Terra Haute, Ind.

The company did "quite well" during the recession, keeping up volume by adding product lines and customers. Dahlin said business did slow though for the five-day-a-week plant and is now picking up again.

The company had a surge in the late 1970s, but it has never been a big moneymaker.

"It has (made money) from time to time," he said. "The big secret here is the volume; in the good years when the volume was here, the profits were here."

Dahlin had two advantages that Straubel didn't have. He is a one-man administration, and by virtue of plant administration being under one roof and not incorporated into the parent firm's cost, Nichols Paper Products cut administrative costs to a third of previous costs. Dahlin has no vice presidents in his administrative costs and only two copies of invoices instead of several.

The second advantage was a move initiated by Adrell Zarnoth, one of two working foremen at the plant. She led the move earlier this year to eliminate union representation of the plant's employees.

"We knew he was starting on his own and we wanted to keep the mill here, and we didn't want a union bucking him," she said.

"We feel if we can help him get this mill going, it will be to our benefit. We know him and we feel he can do it."

Eileen Krull, senior employee with more than 20 years at the plant, lost three of her four weeks vacation, but she said she accepted the cutback as necessary to make the plant go. "He's a fair fellow," she said of Dahlin.

Dahlin sees the plant growing, not expanding its physical plant but perhaps increasing production and eventually moving to a third shift in the 1980s.

"I see it growing. I feel that we could double our production without any increased in our facilities," he said. "We could be running three shifts and getting better use out of our equipment, rather than having it run one or two shifts."

The company is running two shifts most of the time, but because it doesn't stockpile, it has weeks of only one shift. The company has felt the recession, having reached 30 employees prior to the downturn.

In the cramped front office where the secretary, reception Girl Friday sits, the mimeographed sheet on the wall showed that Cecil was the lead (foreman) on the day shift for this week. Ron was on the first-shift maintenance; David in the warehouse; Butch and Tim, on the creper machine; Irene and Lynn, print-winder. There were no last names.

Dahlin said shopping for the best combination of price and service in raw materials was one key to success, and the other was the workers.

"Really, the people here are extremely good," he said.

"They're dependable, honest; they all put in a good day's work."

Back in the 1950s most were farm wives or farmers.

Nichols Paper Products has no profit-sharing and no pension plan, but Dahlin said the people feel like they are a part of the business, in part because it is so small. "They know what work is and they aren't afraid to do it," he said, noting he believed people in small firms worked harder than those in big corporations.

Dahlin said he has hopes for the business, but he is making no promises to workers that he can't keep.