A reporter from Glens Falls-based newspaper, The Post-Star, sat down with Morcon Tissue President and CEO Joe Raccuia to talk process improvements, job creation and the future of Morcon.
WHITE CREEK When Joe Raccuia bought Morcon Tissue in 2013, he knew he’d need to be flexible in guiding the firm forward.
The business, founded by Wayne Morris in 1987, consisted of two main buildings: a production facility just off Route 22 and a building set farther from the road that included raw-material inventory, offices and some processing operations.
Part of the latter building was built as a chicken coop. Both had seen better days.
Before buying Morcon, Raccuia stepped down as president of Finch Paper LLC in Glens Falls in early 2013. Before that, he was president and CEO of SCA Tissue North America, and he worked for Encore Paper Co. before that.
His experience allowed him to see opportunities and challenges at Morcon, which makes a range of tissue-based products for away-from-home businesses, like hotels, restaurants and the like.
“A considerable amount of maintenance was required,” he said during an interview at the facility last week. “Walking around the business, and really understanding the industry, I also recognized that the business needed an injection of capital.”
One year after buying the business, Raccuia sought and received $1 million in funding from the state’s Regional Economic Development Council to facilitate a $6 million expansion.
At the time, he was envisioning a brand new production building on 11 acres he’d purchased about 350 yards north of the current facility, which lies on a 3-acre parcel about a mile and a half south of Cambridge Central School.
The expansion plan changed, however, as Raccuia began to address some of the things that were holding the company back.
Step one: Reconnaissance
By late 2014, Raccuia had spent a lot of time talking to customers and learning whatever he could about Morcon’s capabilities. The business has two facilities, with the other in South Carolina, so he spent a lot of time on the road that first year.
“The view of Morcon from the customers’ perspective was one where they liked Morcon; they liked the people at Morcon. But we had some deficiencies, and the deficiencies were in the presentation of our cartons and also in our ability to service customers,” Raccuia said. “We were delivering – sometimes in the summertime – four-week lead times, five-week lead times, for what folks might call a commodity product, and that’s not acceptable.”
Among his first capital investments were new taping machines, wrapping machines and improved boxes, all aimed at upgrading the packaging of the napkins, paper towels and tissue products that come out of the plant.
Raccuia also improved the quality of the “parent rolls” of bulk tissue, purchased from paper mills, that Morcon processes into useable form for customers.
The upgrade effort included hiring Trampoline Design, in Glens Falls, late last year to create a new logo, new packaging options and marketing efforts befitting the improved products coming out of the facility, Raccuia said.
But the upgrades required to enable those improvements, including everything from new loading docks to upgraded electrical infrastructure, resulted in a reality check.
Change of plans
“I thought that (the main production building), frankly, was just going to be a throwaway, or it would just be a warehouse,” Raccuia said. “Now that I’ve invested a lot of money into the electrical infrastructure and moving new (machines and production lines) in there, it no longer can be a throwaway.”
Raccuia is working with Empire State Development to revamp the funding application that resulted in the $1 million Regional Economic Development Council award. Going forward, he envisions an expansion of the production facility – by 15,000 to 30,000 square feet — and upgrades to the office/inventory building, rather than building a new facility on the available nearby land, he said.
Morcon isn’t waiting for the state, however. Raccuia estimates he’s already spent upwards of $2 million — $300,000 just in the first quarter of this year – to improve the facility and machines inside.
Since taking over the company, he’s improved employee benefits, including a “very robust” 401(k) plan, medical benefits and, coming soon, life insurance.
The company is also hiring and was in the process of interviewing for up to eight production positions last week, Raccuia said.
“We’ve got some room on second shift and some room on third shift, which is just additional opportunity for us to meet our sales demand,” he said.
On the day of The Post-Star‘s interview, Raccuia was conducting all-employee meetings – there are about 90 on payroll in New York, and he communicated via conference call with the approximately 100 staffers in the South Carolina facility.
The meetings, which happen monthly, offer a chance for company executives to detail Morcon’s recent investments and performance.
“We’ll have record shipments, record production and we’re investing heavily into the business,” Raccuia said. “They were very positive messages, and at the same time, we’re not even hitting the tip of the iceberg of things we’d like to do.”
Raccuia believes Morcon’s location – more than 25 miles from the Northway near the border of two towns with a combined population of around 7,000 – has its benefits and shortfalls.
Chief among the challenges is the availability of qualified workers, he said.
Morcon has reached out to the local high school and is planning further outreach in hopes of spreading word about opportunities close to home. But a wider net will likely need to be cast in the future, if growth continues on its current trajectory, Raccuia said.
“We do have some employees from Vermont; we do have some employees from Schuylerville, but just the sheer population – or lack thereof – I would say is a concern,” he said.
It’s not just a concern for Morcon, according to Laura Oswald, director of the Washington County Economic Development Corp.
“I think that is a larger problem than most people realize,” she said. “On the one hand, within the county, what I hear is, ‘We need to create more jobs, we need to create more jobs.’ The truth is we have a number of companies out there who are having significant difficulties recruiting: Adirondack Studios, Morcon, SCA Tissue, Cambridge Valley Machining.”
The issue they face, Oswald said, isn’t finding people; it’s finding people with the right skills.
“So, one of the things we’re going to try to step up on is working with the (state) Workforce Investment Board, with BOCES, with SUNY Adirondack to start delving further into specific training needs that companies have so we can try to bridge that gap a bit between the missing skill sets and the bodies we have available in the county who want to work,” Oswald said.
Over the course of 2016, Raccuia expects Morcon’s payroll to break the 100-employee threshold, he said. But the community will also see a new look for the company, with new signs and exterior building work in the pipeline, he said.
Beyond that, Morcon is focused on establishing its place in the away-from-home tissue products industry.
“We’re not going to be able to compete with the top three (away-from-home tissue firms), but at least (the recent investment) separates us from the bottom, and it allows us to be an alternative to the major players,” Raccuia said. “That’s what our position is: we’re an alternative to the major suppliers.”
Read Scott Donnelly’s blog, Business Connection, at Poststar.com