Driving the turnaround Katz Group

World-leading producer of beer mats and coasters,The Katz Group has long been able to deliver above and beyond its most famous product. Dedicated to sustainability and delivering added value, the newly optimised global company is converting its wood-chip board into a range of design-led products. Emma-Jane Batey spoke to managing director Daniel Bitton to find out more.

DRIVING THE TURNAROUND

The Katz Group’s managing director since the start of 2010, Daniel Bitton, has proven the perfect man to turn around this historically successful but recently floundering board converter. With the deep pockets and long-term commitment of new owners the Koehler Paper Group firmly in place, Mr Bitton has been able to utilise his experience of turning around failing companies in the paper and packaging industry. Mr Bitton told Industry Europe, “When I was headhunted for the role the first thing I wanted to do was make sure Koehler, the new owners of The Katz Group, were looking to stick around. I didn’t want to put my energy into turning a known name like Katz around only for

it to be sold off as soon as it became profitable again. Thankfully, Koehler value the heritage and expertise contained within the company and were just as keen as me to build the company back up and keep it in their portfolio.”

Total turnaround

The key aspects of Daniel Bitton’s plan to ‘build the company back up’ involved investing over €3 million in optimising all the processes and streamlining the production as a whole. The Koehler Paper Group of Oberkirch, Germany, acquired full ownership of the Katz Group in October 2009, out of an insolvency situation. Prior to this, the Katz Group was in private equity ownership for nearly ten years, but at the end of 2009 the company had generated a loss of more than €6 million. Mr Bitton continued, “I was recruited along with the acquisition to orchestrate a full turnaround of the group. I am proud to say that a profitable outcome has been achieved within just three years; in 2012 we generated a group-wide turnover of €39.5 million and had a positive return before taxes of 11 per cent.”

A well-known player in the paper board industry, the Katz Group has long been the worldwide market leader in the beer mat/ coaster segment. The company has a 95 per cent share of this market in the USA, where it has no competitor, and a more than 60 per cent share in Europe and the rest of the world.

While it is the beer mat/coaster sector where the Katz Group is perhaps best known, under Mr Bitton’s entrepreneurial leadership the company is both boosting its presence in this sector and promoting its capabilities beyond beer mats. Mr Bitton explained, “We have a highly creative graphics expert, a forward-thinking marketing team and a larger sales team than ever. Part of our optimisation programme is to offer design-led products across our active areas, including beer mats and coasters, so that our customers are able to get the best out of us and our products.”

As a producer of wood-chip board the Katz Group has a maximum capacity of 25,000 tonnes each year. The company can produce its board in various thicknesses ranging from 1mm to 3mm in sheets and reels. With three print facilities – one at its German HQ and two in the USA – it mainly converts its board into beer mats and coasters, making around 2.8 billion pieces a year, a figure which represents 17,000 tonnes of wood-chip board production. The remainder is used in applications for the dry-food sector (commonly base lining for boxes of cheese), display board for indoor POS hanging signage and industrial applications such as sound reduction for laminate and wood flooring. Furthermore, the Katz Group is increasingly active in the ‘give away’ sector for small cardboard games and also for door and coat hangers for the hotel sector, an area which is particularly benefiting from the company’s increasingly creative offer.

Investment used to good advantage

With the major investment of the Koehler Paper Group an important requirement – Katz’s pre-press work flow had last been updated in 1980 – the company now enjoys state-of-the-art machinery and equipment to

support its workforce. The company’s commitment to sustainability has also received a considerable boost, with the Katz Group now able to use wood solely from the Black Forest near which it is based. It also runs a closed loop water system which actually puts the water back cleaner that it was taken. All the print inks used are based on plant oils, all cutting waste is reused and, depending on quality/grade, up to 60 per cent of recycled board scraps are used.

In addition to the production facilities in Germany and the USA, the Katz Group has a sales office in the UK and supplies to breweries worldwide, thanks to a distribution network and direct sales. Key markets are Australia, Singapore and Japan, with plans to expand into the Middle East, Africa and South Africa. Mr Bitton added, “We do not plan to sell our beer mats into China or India because we don’t only compete on price. With our second-to-none design and printing capabilities we prefer to work with customers who value the quality and creativity we offer, rather than just being the cheapest. That’s not us and it’s not how we will continue our upward trajectory.”

Mr Bitton’s view of how to optimise the experience and processes of the company and its skilled workforce (mass redundancies were not part of his turnaround programme) are already showing how the Katz Group is moving beyond beer mats. He concluded, “We have begun to grow by providing not only very good products but also a creative service that is second to none. We really add value to our products, which is key in a competitive market. Having come from a severe loss situation, our next two years will see us continue to be focused on sustaining our turnaround effort and we intend to grow steadily and solidly as we continue to be a niche player.” n