Posted December 13, 2017

 

By Devin Steele (DSteele@eTextileCommunications.com)

 

GASTONIA, N.C. – From humble beginnings here in 1982, Conitex Sonoco slowly but surely became synonymous with the textile industry.

 

And look at it now.

 

The company transformed itself from a fledgling yarn cone manufacturer for the then-booming textile industry of the Carolinas and other parts of the U.S. to a global packaging solutions group with more than $250 million in sales and a physical presence in 11 countries across four continents.

 

Impressive.

 

But it didn’t reach this milestone or magnitude by happenstance. The company, according to company officials, has grown through the leadership and vision of CEO José Luis Artiga and the executive team he put in place in those early years – and remains with the company to this day – and the principles he instilled from the start. (And, yes, which also remain to this day.)

 

Principles such as: Customer focus. Continuous improvement. Trust and respect. And high ethical standards.

 

The stuff of which success stories are made.

 

At least from a foundational standpoint.

 

Those underlying fundamentals played a critical role in Conitex Sonoco’s finding the keys to survival and success, insiders said. Diversification, of course, has figured prominently into the company’s ability to flourish. And company leaders count expansion as an ingredient. Not to mention a strong desire and accompanying playbook to be a leader in its field.

 

A longtime leader in paper cones and tubes to the textile industry, the company over the years has broadened its production repertoire to include corrugated pallets, sliver cans and labels for the textile industry and flexible bulk bags for several other sectors. As such, it is now considered a true packaging solutions provider.

 

For its global market leadership in its areas of expertise and the high standards and expectations, quality and service it has established, Conitex Sonoco, celebrating its 35th anniversary this year, has been named eTC’s 2017 Supplier of the Year.

 

Let’s take a peek at how it got here.

 

Building a solid foundation

 

After about a year in business, Spain-based partners José Ma Artiga Sr. and Pere Valls of TexPack appointed Artiga Sr.’s son, José Luis, to lead their upstart cone manufacturing plant in Gastonia. Artiga, whose father and grandfather were pioneers in the manufacture of paper cones for spun yarn, worked hard to prove his ability to lead and operate this new venture when he began the reformation and growth of Conitex, formerly an importer-wholesaler to the U.S. textile industry, according to the company. In doing so, he surrounded himself with a strong leadership team, which has guided the growth and diversification of Conitex for more than three decades.

 

Among them is Michel Schmidlin, now chief operating officer, who joined the company in 1985. With paper cones as its first product, “we brought a superior product and a customer service philosophy that allowed us to deliver within two weeks, and that was a new standard in the industry at that time,” he said.

 

With the U.S. industry beginning to see hairline cracks in its massive infrastructure in the mid-1980s, Conitex began to look to the rising East. So in 1987, it opened its first plant outside of the U.S., in Taiwan, and Schmidlin was charged with starting up the operation.

 

In 1994, the company expanded into open-end tube manufacturing and brown-and-round industrial cores. These forays into the tube and core market prompted keen attention from industry giant Sonoco and, in 1998, Conitex executive members accepted a 30 percent equity partnership with Sonoco to form the joint venture, Conitex Sonoco. As part of this deal, Conitex Sonoco acquired cone manufacturing facilities in South Carolina, Greece and Mexico.

 

In the 2000s, the company extended its product line and capabilities by adding sliver cans, corrugated pallets and labels. Then in 2012, the company became one of only a handful of bulk bag suppliers with U.S.-based manufacturing and warehouse locations when it acquired BulkSak, Inc. of Malvern, Ark., where it produces flexible intermediate bulk container (FIBC) bags.

 

During the U.S. textile industry’s downturn, the company realized it needed to diversify its product offering, Schmidlin said.

 

“That's when we did some soul searching and, really, discovered that what we really do is packaging, which led us into these other areas, including the innovative pallet business and the FIBC business,” he said.

 

Today, the company operates with four divisions: Converting; Paper, Flexible Products; and Adhesives.

 

In 2012, José Artiga’s son, Alex, joined the company after working for several years in investment banking in London. Other senior leaders in their U.S. headquarters include CFO Joaquin Viñas; David Monteith, vice president of Flexible Products; Agustin Marin, vice president of Converting; Igor Lisitsyn, director of Continuous Improvement.

 

“There was a period when the textile business suffered a great deal in the U.S., but as we've expanded globally, we're proud to have maintained the original base of where we started – here,” said Alex Artiga, who serves as product management director in Gastonia. “This was achieved through diversifying our product offering and through cost reduction and improvements in our processes and our machinery. We've been able to keep our costs down in order to be able to service here. We remain optimistic even today.”

 

With about 100 employees at its 103,000-square-foot facility here, Conitex Sonoco manufactures its textile cones and tubes and corrugated pallets. All of its cone-making machinery is proprietary, and that requires engineering staff in Gastonia and at all of its locations, to maintain and to enhance the equipment.

 

“The design is done in Barcelona, but we have two people here who work on continuous improvement of the equipment,” Schmidlin said. “And there's a strong interaction between the R&D group in Spain and the folks here in production. That is one of our strengths.”

 

Globally, the company operates 13 plants and employs about 1,200 people.

 

Asked for their perspectives on the company’s keys to success, Schmidlin and Alex Artiga offered similar responses.

 

“I would say being the best at what we do,” Schmidlin said. “We tend to be the leader in the market. We have the best paper cone and tube quality for spinning. We are a leader in the paperboard industry in terms of making high-quality grades for the tube and core industry. Also, our philosophy of customer service – getting the right product to customers at the right time without fail. And finally, I would say we have a very lean and flat organization. And that has helped carry us through the recessions and the turmoil that we've seen, particularly in the U.S. industry.”

 

Added Alex Artiga: “That we've maintained our original values of offering quality products and of delivering the best customer service that we can deliver has been a very important part of our success. It's been a struggle over the years sometimes to incorporate these values as we opened up new plants in countries that may not always have the focus on those two things. But it's always been a key for us to make sure we implement those values at every location we operate in.”

 

Strive for excellence

 

Another strength, as noted, is the leadership of José Luis Artiga, they added.

 

“He is very driven and very strategic,” Schmidlin said. “And he runs a decentralized organization. He trusts people to get the job done. He assembled a team of managers who are part of what we call the ExCom, or the Executive Committee. And this team of people has been together for 25-plus years, which is rare.”

 

Alex Artiga sees his dad personally and professionally from a closer angle.

 

“What I find unique about my dad is his intensity in striving for excellence in everything and how much he admires and values excellence,” he said. “And it doesn't matter whether it's producing an excellent cone or with his cooking, a hobby of his. He's very passionate. If he sees something he likes, he'll talk about it for hours. So he’s definitely very driven, very quality oriented and very customer oriented. That's where we got our culture.”

 

The strive for excellence by José Luis Artiga – and, by extension, the company – translates into top-quality products, Schmidlin said. Take its charter product, the paper cone, for instance, when asked to compare it to plastic, he explained.

 

“The plush surface is a much better surface for the yarn than plastic,” he said. “It winds very smoothly. And the surface can be varied, so it can be either coarse or very fine, depending on the yarn our customers spin. The paper cone also doesn't crack in the winter, like plastic does. There are a lot of features that we put on the cone, including printing. You can print endlessly as far as the colors you want or the design. We also have tail-setting features. For example, we can take off the sharp edge of the cone of the base and that allows the yarn tail to stay intact so that you can tie one package to the next one and not have a break in the fabric that you missed. The bullnose is a much better bullnose, allowing a much more perfect wind.”

 

“And the thing you may not realize is these are made to specs of quarters of millimeters,” added Alex Artiga. “So very small changes can affect the runnability on the machine. That drives our need to provide consistently good quality because a quarter of a millimeter difference can be noticed. And we guarantee the specs. If we weren't able to do that, our customers would notice it in their machine efficiencies. And that's important to us.”

 

Most of the company’s products, including cones and tubes, are custom-made to meet customer requirements, Alex Artiga added.

 

“Typically, we have to tell our customers what they need,” he said. “We go to their machinery and test different cones and we're able to tell them what will work best on their machinery.”

 

Speaking of its core product, the company manufactures approximately 1.5 billion cones and tubes annually, worldwide.

 

Additionally, Conitex Sonoco touts itself as being very much socially responsible. Globally, all of its paper goods are made from 100 percent recycled paper, Schmidlin said. And, of course, those products can be recycled over and over again, he added.

 

Oh, and 1 percent of the company's operating income is dedicated to investment in socially responsible activities and donations for surrounding communities in the countries in which it operates. The company does this as part of a worldwide effort to help feed individuals and families in need by supporting local food banks such as Bread Inc., Second Harvest Food Bank and Arkansas Food Bank. In places such as Indonesia, it distributes food items and holds free medicine clinics for the villages surrounding its facility. And in China, it sponsors scholarships for local school children as well as college scholarships for the children of employees, performs blood drives in cooperation with the Red Cross and sponsors care for senior citizens in extreme living situations.

 

Made-in-America movement supported

 

Today, textiles still constitute about 40 percent of Conitex Sonoco’s business, so it remains a large and important part of its business. With the made-in-America movement beginning to hit its stride, the company prides itself on its local-for-local model, especially in the U.S., Schmidlin said.

 

“We are proud that the cones, tubes and pallets that we sell in the U.S. are made in the U.S.,” he said. “In our business, it would be very difficult to service the industry with a one-week turnaround time if we didn't make it in the U.S. Our product is so customized and we deliver in sometimes two days or the same day, as needed. The runs by our customers have become much shorter, so you have to be much more flexible and emphasize quick delivery and quick service.”

 

Since the re-shoring migration began, the company has seen an uptick in investment by players new and established in the U.S. yarn-spinning sector, which “is a good sign,” he added.

 

“I would like to thank the industry for their support over the years,” Schmidlin said. “We owe a debt of gratitude to all the major customers here. We've partnered with them for many years. We have an extremely good relationship, giving them the right product at the right time, every time. And I think it's been good for both sides.”

 

“And we'll continue to serve the industry as best we can for many years to come,” Alex Artiga added.