Southern Carton Co.: Integrity, Quality, and Service

BY STEVE YOUNG

COMPANY: Southern Carton Co.

ESTABLISHED: 1977

JOINED AICC: 1985

PHONE: 931-359-6285

WEBSITE: www.southerncarton.com

HEADQUARTERS : Lewisburg, Tennessee

CEO: David Kennedy

Jim Kennedy knew nothing about the corrugated box business when, in 1977, he and his wife, Kate, founded Southern Carton Co. in Lewisburg, Tennessee. At the time, he was general manager of the Heil-Quaker plant there, overseeing 1,300 people manufacturing commercial and residential heating and air conditioning systems. Yet, as successful as he was at Heil-Quaker, Kennedy’s entrepreneurial instinct told him an opportunity to sell small quantities of corrugated boxes to customers had been long overlooked by the bigger integrateds.

“He always wanted to start his own business, and wherever he worked, he excelled,” explains his son David Kennedy, now CEO of the company. “He’s getting to the end of his career; he’s

56, 57 years old, and he saw a niche here where if you wanted 500 or 1,000 boxes, you couldn’t get them from the big guys, let alone 250 or 300.” This, as David tells it, was the genesis of Southern Carton, a story that reads like that of many independent sheet plants in AICC’s membership today.

“He started with a Rite-Size boxmaker,” David continues. “He, my mother, and brother Rick started cranking out orders for 100, 200 boxes at a time. They rolled the cert stamp by hand with a little stamp pad and then glued or taped them shut.”

David explains that the little company’s immediate success soon forced the acquisition of faster equipment. “Like everybody in this business, one thing leads to another, and pretty soon he says,

‘I need to find a taper or a gluer or a slitter.’ That leads to printer slotters, which leads to flexos, which leads to rotary die cutters—all of which we now have.”

Expansion, Extension, Equipment

Today, Southern Carton is a $20 million company producing 200 million square feet annually. Its 55 employees work a single shift in an 85,000-square-foot manufacturing facility with an additional 53,000 square feet of off-site finished-goods warehousing.

A family enterprise from the start, Southern Carton is now in its third generation of ownership. Barbara Kennedy, David’s wife of 35 years, has been an integral part of the company’s growth and history as confidante, sounding board,

O u r j o b i s u l l s t y o r f c i l i t i e s ' e n e r g y n e e d s , b u i l d a c u s t o m , c l i e n t - s p e c i f i c e l e c t r i c i t y o r n a t u r a l g a s p r o c u r e m e n t s t r a t e g y , and cheerleader. “Barbara and I discussed Southern Carton business almost nightly at the dinner table,” says David, adding that because of those discussions, two of the Kennedy sons—Connor and Sean—said, “I want to do that,” and they now work in the business, with Connor serving as president and Sean in production. (The Kennedys’ daughter, Meredith, is a nurse practitioner, and their other son, Patrick, is an engineer.)

The company’s values, as described by all the Kennedys, are “best in integrity, quality, and service.”

“Everybody here is so focused on the customer, whatever the customer needs,” David says. “Our unwritten motto is underpromise and overdeliver. Once a customer comes on board with us, they seldom leave.”

Connor adds that Southern Carton’s service ethos is grounded in what he calls a “servant” mentality. “We have a great sales team, and they’re all servants at heart,” he says. “They have a job to do, it’s true, but at the same time, they really just enjoy helping people. And I would say that about all our employees.”

The geographic reach of Southern Carton’s servant philosophy extends in a 130-mile arc from southern Kentucky in the north to northern Alabama in the south. Located about 45 miles south of Nashville off Interstate 65, Southern Carton’s central Tennessee location makes all these market areas an easy reach. Historically, David says, the pencil business dominated the local economies in the 1970s. “There were, like, nine pencil companies because cedar is so plentiful here and that’s what they were made of; there were pencil factories everywhere. Now, there are two,” he says.

The biggest economic shift to occur in the mid-South states since that time is the arrival of the auto industry. Beginning in the early 2000s, the region saw more than $10 billion in direct investment not only from legacy carmakers such as Ford and

GM but also newcomers such as Toyota, Hyundai, Volkswagen, and BMW. More recently, the region has seen a renewed investment wave to support production of electric vehicles—upward of $33 billion across the Southeast, according to online publication Electrek.

Southern Carton has been a beneficiary of this shift because with automotive manufacturing come the parts and systems suppliers that support it. “The economy here has changed so much that it’s probably one-third automotive,” says Connor, “and of our top 10 customers, four are automotive.”

The balance of Southern Carton’s business mix is made up of smaller yet thriving industry segments such as retail packaging firms, consumer and commercial cookware manufacturers, and food and beverage companies.

Serving this demanding market mix has required constant reinvestment in the production capability of the plant. Southern Carton’s equipment roster upgrades in 2022 alone totaled more than $8 million, and in 2023 and 2024, the Kennedy family is expected to invest an additional $4 million to $5 million. Before the 2022–2023 upgrades, Southern Carton’s equipment list was that of a typical service-oriented sheet plant: a Ward 66" x 125" two-color flexo-folder gluer, a Ward 66" x 115" rotary die cutter, a Lian Tee 26" x 78" two-color mini flexo, and a Marumatsu 86" x 205" jumbo printer slotter. In addition, the company has an Automatan labeler, a Fuji X3 digital printer, and a Zünd sample table.

The 2022 retooling of the company’s converting and finishing capability saw the addition of an Apstar 66" x 110" two-color rotary die cutter with an Alliance pre-feeder and A.G. Stacker, a J&L specialty gluer, a Baysek 170 die cutter with load turner, two Mosca unitizers, and three Mosca strappers. The upgrades went beyond converting and finishing operations to include such plant infrastructure as 400 feet of new conveyer from Bay Machinery, two Bay Machinery load formers, a new Balemaster baler, and new cyclone. This March, Southern will take delivery of a new Apstar 66" x 126" two-color flexo folder gluer with an Alliance pre-feeder.

“We have basically retooled the plant with new or updated equipment in the past year so we are poised for growth,” David says. “Our region is growing; industry is moving to business-friendly Tennessee, and we now have a lot of fi repower to meet new customers’ needs.”

Scott Fray, general manager, agrees. “We now have a broader capability to supply many types of business segments—digital wide-format labels, flexo print—and we can run small boxes up to jumbo in-house.” Fray came to Southern Carton seven years ago after spending 24 years in the industry, predominantly at WestRock and Menasha.

‘Servants at Heart’

The box industry being a service business, all of the mechanical capability in the world will not sell a single item. Southern Carton’s market approach recognizes this; thus, exemplary customer service is enshrined as a principal company value. “The whole organization works with a sense of urgency whose only focus is on the customer,” says Fray, echoing Connor’s earlier description of Southern Carton’s employees as “servants at heart.”

“Our strengths have always been in our loyal customers and our loyal employees,” David says. “Many of our customers have been with us for over 20 years, and many of our employees have been with us more than 20. I believe the secret is to never take either for granted. [The adage,] ‘treat people like you would like to be treated,’ still holds true today.”

The roster of Southern Carton’s longtime loyal employees begins with Diane Sharp, who at 43 years of service holds a one-year seniority edge even over David, who just passed the 42-year mark. Sharp speaks