This is part 2 of my interview with Gmund's Worldwide Sales Director, Herbert Eibach. If you haven't yet heard part 1 of the interview, you might want to listen to it before you listen to part 2. Then you'll be up to speed on the history of Gmund, which is a fine paper mill located in Germany, near Austria and the Bavarian Alps. And now, here is the final segment of my interview with Herbert Eibach.
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Here is a transcript of the interview:
Gmund is well-known for consistent colors. And is there anything you’d like to talk about there for your consistent colors?
Yes, we can. So that’s true. Indeed, most companies would pick us due to our consistency. This would be true in the US for companies like Godiva or also Adobe which we recently had a project. So they pick us for the consistency. The reason is the smaller machine has less speed and therefore we can easier and faster get to the optimized color of 100% match. Then you have a slight variation, but we can adjust faster and we have half the tolerance of any other mill in our projects. So, and most of the time we achieve our targets. This is the reality that our consistency and color is better than other ones.
Another important part is that all our suppliers for the raw materials, we pick carefully that we don’t look just for the cheapest raw material on the market, whether it’s ink or the fibers. So we are very keen on consistency also with our raw materials and also with our suppliers. So our suppliers are partners because we know they are important piece of our success story that ensures us to keep consistency.
And then the third bullet would be, we have of course optical measurements and videotaping in line, in the machine, even in the old equipment we have online cameras in the cutting machine, we have online cameras. But, in addition, we have a team of 8 people. They do manually inspect every single sheet before we manually ring wrap it and then put it on pallets. So this is the third quality control and check what we do. It will be pre-counted by the machine. Let’s say it’s pre-counted for 100 sheets. Then they would do the manual sheet inspection. Maybe they would discover 1 sheet that is not 100% correct. Then the person would remove this 1 single sheet and would add on another perfect sheet so that we have 100 at the end. So this is then, of course, manually counted and then manually ring wrapped. This has a little bit a higher cost than not doing it, but we know that we have certain amount of customers, they appreciate this and they choose Gmund because of its quality and consistency.
The quality is for us the most important. It’s not volume. Like for most companies, volume is the most important or a certain percentage of increasing the business year over year. This is, for us, not a target at all. For us, the target is showing innovative new products to designers and to the industry, plus keep on consistency and high quality. If you maintain this clear strategy, then you have also a certain authentic approach that everything would be put on Powerpoint presentations and tell to our customers is then also true at the end of a day. Because this is in line, what we tell is in line with what we are doing with our targets and our behavior. So it’s crystal clear. This is possible because we are an independent, small company financed and run by the same person and we have no external capital involved. So everything what we have in earnings we will partially invest for next year. So we have a closed loop cycle in terms of financial operations.
And Gmund has a strong reputation for shipping overseas with your product arriving in perfect condition. You must be especially proud of your packing.
Indeed. The person that is in charge of doing the pallets and the shrinking and the protection, he is really proud. And that makes also part of it. He’s not just a number, a employee number 2100, so he has a clear mission. He wants to be the best packaging person in the paper industry. That’s why he gets up every day in the morning, and this is his target. And he’s doing absolutely good, because we know that we have customers in 80 countries. So we ship to 80 countries and we do stock-keeping in 70 countries, so they need to arrive in proper condition. It needs to be at the customer point, a high, premium quality product, not only at the time when we produce it at the mill. So the logistic and the transportation is for us, as important as we do our proper manufacturing on the paper machine.
And we should mention this man’s name, since we spoke about him.
It’s Manfred.
Ok. How do creative types and do it yourself types use Gmund’s paper? Do you often have a chance to see how the end user is using your paper? Do you know what I mean by end user?
Yeah yeah yeah, we certainly do. This is of key importance, to know and understand what is the market and the people doing out of your paper. By seeing this and understanding this, then you know also what they understand and which messages from our side will arrive to the customer and will be understood. Because one thing is to have a message and to announce your message, but if the customer is getting it in a wrong way or in a different way, you might lose your track. So this is key important. And there’s also a difference to other companies. When we go to international exhibitions... We go to the US stationery show. We go to the Luxe Pack exhibition. We go to Drupal or Paperworld. Then, even Mr. Kohler as the owner, or myself as Worldwide Sales Director, we do booth duty and the front desk. So we talk to every person that is stepping by to visit our booth. We do not hide ourselves in a VIP corner having coffee with the VIP customers. We attend and serve every individual, whether it’s a end user, designer, or printer, to talk to these people, to understand what they have...what their needs are, and to ask them how often do they use it—our paper—and for what application.
So in general, our papers are being used about 20% into high end consumer packaging. One example would be Godiva chocolate for instance, or lots of perfumes or hang tags as well, and boxes in the fabric industry. And about 80% would be high profile marketing communication. So this is starting from letterhead and business cards as well as brochures, annual reports, and all publications that have a certain target. And the target would be increasing for another company some revenues, increasing for another company maybe profitability or image or response rates. So those are the tough targets our paper needs to achieve in the market and then it will be chosen again and again because then we are part of the company’s success and not just a nice looking, beautiful paper.
Let’s talk about Paperworld in Frankfurt coming up.
It’s always end of January, looking into the first 1 or 2 days of February. So it’s always in between. Next year in 2009 it will be for 4 days, first time it will be over the weekend plus Monday, Tuesday. So that also some owners of stationery shops or smaller shops, they don’t want to spend the time during the week, they have the opportunity to visit Paperworld over the weekend.
And how important has that convention been to your business?
This is a very important convention. We still get there all the major paper decision-makers, especially from Asia. They’re all coming to Paperworld, also the European ones. The US is a little bit less compared to the past. This is due to the fact that Paperworld, the exhibition, they made a diversification. So they initiated Paperworld also in the US. So a lot of US customers will not go to all the way to Frankfurt, Germany. So they would potentially go to Paperworld in the US.
With Gmund being in such a naturally beautiful part of the country with impressive mountains nearby, do many of the staff enjoy skiing, hiking, biking, or other outdoor sports and activities?
Yes, they do indeed. It’s not a criterion, if we hire new employees. But it’s an important part for us. Because only if a person is well-balanced between work and life, then they are stable and ongoing motivated to do the best for the company and to give the best in their job. They have here around the company all the possibilities during summertime where we have 80, 90 degrees Fahrenheit around the company, they would go for a swim in the lake nearby. The lake is absolutely clean, drinking water quality. So you could swim with an open mouth like a whale and drink while you swim because there are no motorboats allowed and there is only 1 incoming source from a tiny river that is coming from the mountains, so absolutely clean. In winter, we would go skiing or sledging as well. That’s very fun, especially at these days. We do a lot of sledging, hiking, mountain biking, so whatever brings you away from business, so that after this activity, you can be even better in business.
You said “sledging.”
Sledging is... You go up a mountain and then you have a small, I would call it a sledge or vehicle that is a wooden chair with a sort of skis underneath. You sit down there and then you sledge down. You can do it as a single person or you can go together with your partner, so 2 people on 1 sledge. And then you would just drive down within the forest, maybe about 3, 4 miles. And on the top, before you start, you would go into a mountain hut, having maybe 1 or 2 beers and it’s a lot of fun which people do together in groups with friends and family.
Cool. And how great for Gmund to recognize that a well...an employee with a well-balanced lifestyle is really the best employee. I’ve never heard that coming from a corporation before, so, so good to hear that.
Well, this is key. Otherwise people are getting frustrated. If their life is only work, 12 or 14 hours, they have just a quick rest and they would come the next day. And this, if you do 1 year long, you are not motivated anymore. You lose concentration. You lose energy and inspiration. And all these parameters are important for us to serve customers well. Inspire, inform, attract people, new customers, and be creative for new marketing tools, for new initiatives, and for new products.
What is the most important aspect of the company’s operation or the product by which you would like the listeners to remember Gmund today?
Well, the most important is that we truly do our best for the customers and not for any shareholder or any private equity. Not exactly knowing a company that would be behind. So we do everything what we do for our customers. That’s key. And then, secondly, we are so small that everybody knows everyone. So we’re 110 people, so everybody knows that everybody’s at the same importance level, whether it’s Mr. Kohler the owner, or it’s the person that is preparing the pallets, or the person from the sample department that is sending out a sample. If one of those people would fail, we would fail as a company. So everybody has the same importance level. And this is important to know for the people. And then we can share the performance also to our customers.
Is there anything else that you wanted to mention?
Well, one thing is that we would have still capacity for the next coming years. Because ‘til today, we never produce on a Saturday and Sunday. So that is also unique in paper industry. Other paper mills they would produce from January 1st 'til December 31st, while we take always a pause Saturday and Sunday. We switch off the machine and we switch on on Monday again. And also, we never did so far use our machines in parallel. Also, this would be in future, an option to run both machines at the same time. Any paper mill would do by today. We never did. So this puts us in a good, comfortable situation that we have a good business every year. We always are...have been able, since 1980, to increase every year a little bit, in a moderate and healthy way. We still can do the same thing for the next 10, 15 years without coming into a situation that we would need a third paper machine being installed and purchased.
It’s so interesting. From outside, you would think, “Well, paper is boring," and people wouldn’t know paper from copy paper, newspaper, or toilet paper, but it’s so exciting because we are getting access to any industry. So whether it’s jewelry, whether it’s automotive, and that’s so interesting! I mean, that is never-ending basically. Well, we do... I just got, yesterday, an update of what jobs we did for the US market.
Oh
It was, for instance, the Saint John’s University in New York, Donna Karan, New York, Adidas, Bacardi, Adobe Systems.
Is that the software company? Photoshop and...?
Correct.
Ok, ok
And they just launched recently a new Master Collection being launched in September. And so the entire packaging for this Master Collection of Adobe worldwide, being done on Gmund paper. We did the Olympic book Beijing 2008 with all the gold medal winners.
Wow
So it’s such a wide territory where we are in and where we have access to, and that makes it so interesting for us an employee.
Maybe you don’t know, we have a small little stationery shop next to the mill here. And we won, just last week, the Red Dot award for the interior design and product we offer there which we made us very happy to receive a Red Dot award.
Tell me about the location. Can you give the address of that store?
Well, it’s the same address, like the mill. It’s in Gmund at Mangfall Street 5, Gmund, Germany. And then we have another outlet in Munich city center in the Pranner Street. It’s next to the hotel Bayerischer Hof.
Well, thank you for your time and for your interest Josh, and the opportunity!
Recommended Links:
Gmund
Red Dot
Joshua Birch
josh@lcipaper.com
Yeah the old machine actually is being called “Old Lady” within the mill. We got her in 1883 so her birthday is this year, 125 years in 2008. And the plan has been once to make a replacement. It was back in 1979 where we got a newer machine, a more modern machine, faster and wider. And we wanted, as Gmund, to replace the old machine. That has been the plan from management and family Kohler. But it was not possible. We could not reproduce certain papers we did on the old one on the new one. And therefore, we had to change the strategy and keep both machines at the same time. So we have certain grades we produce only on the old one. And as this was such an emotional situation, we gave her the name, at that time, “Lady,” “Old Lady,” as she prevented us from selling her and discontinuing. The machine is still running every 2 weeks. So for 2 weeks, and then we have the 2 weeks break where we do our own maintenance and cleaning.
