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The world of paper has changed dramatically in the eight years since Edgar L. Smith Jr. launched World Pac Paper L.L.C. (No. 71 on the BE Industrial/Service Companies list with $38.8 million in revenues). Print media and catalogs–once two of the company’s largest revenue drivers–have struggled for years as more businesses than ever push employees to reduce paper consumption. This, combined with a brutal business climate, has forced the closure of some of the paper mills with which World Pac conducts business.
But Smith says the national distributor of high-quality printing, packaging paper, and packaging solutions is able to withstand these pressures because when he formed the company in 2004, he had one word in mind: diversification. “When I looked at the world of paper distributors, I oftentimes saw a lot of them were very focused on commercial printing and publishing. Publishing was very, very heavy, whether that’s book and magazine publishing, or catalogs and tabloids,” says the 51-year-old chairman and CEO.
So while World Pac does service commercial printers, catalogers, and book and magazine publishers, the company also has customers that are integrated and independent corrugated converters, folding carton/rigid box manufacturers, tube winders, and laminators. With customers in the food, consumer goods, and retailing sector such as Procter & Gamble and Macy’s, the company generates more than 50% of its sales from supplying packaging grades of paper and packaging solutions. Asserts Smith: “Paper is used in lots of different applications and we sell into a myriad of different applications, so we’re not heavy in the commercial print space.”
Diversification helped the company weather the worst the economy has thrown at it. While sales dropped more than 20% from 2008 to 2009, World Pac management maintains that the damage would have been much more severe without numerous revenue streams. “We could have easily been 30% to 50% down without that diversification, because the other lines of business that we were in continued to either transact at a flat or growth level,” says Richard A. Baptiste, president and COO. The distributor is now seeking to branch out into complementary product lines while expanding its global presence.
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