Mohawk Unveils Reinvention Plans, New Strategic Focus

"Everywhere you read that print is declining, but the opportunities with the new digital technologies, or with what I would call 'the new generation of print,' are great," O'Connor said. "Technology disrupts, recessions clarify, and successful companies reinvent. That's what we're doing right now."

Outlining the company's vision for the future, O'Connor noted that Mohawk will: 

• Focus its manufacturing exclusively on high-margin papers and products that will bring distinct value to the new generation of print customers, a unique positioning in an industry historically driven by volume and capacity 
• Develop strategic acquisitions and partnerships that successfully leverage the company's expertise and operational excellence 
• Continue to move closer to the end-customer across all business segments.

O'Connor (see photo) summarized Mohawk's progress during the past 24 months as follows:

• The acquisition of digital specialty substrates business Bravo in 2011, which offers significant worldwide potential.
• Last year, Mohawk created and launched a B2B and B2C envelope business. In the past, O'Connor said, Mohawk relied exclusively on converters to produce envelopes made with its papers. "Now, we're making envelopes at the rate of 30 million per month," he said. O'Connor explained that Mohawk is now better able to service its customers, fill an unmet need in the marketplace, and achieve substantially higher operating margins. "We're taking the future into our own hands," he said.
• In the consumer marketplace, O'Connor pointed to Pinhole Press, Mohawk's site for "simple, beautiful" photo products. Launched in 2010, Pinhole Products has been featured in consumer outlets like Real Simple and Martha Stewart Living. This business, he noted, took 7,000 orders during the past six weeks. Pinhole Pro, a related offering to the professional photography community, was launched last month.
• O'Connor said Mohawk will continue to seek strategic partnerships with companies such as business card company Moo.com, that differentiate their products with unique substrates such as proprietary Moo Luxe. He shared the example of Blurb.com, which now offers a high-end product line requested by its customers and advertises the use of Mohawk's Superfine and ProPhoto papers to help sell its products.
• Mohawk fully expects to leverage its industry expertise and operational excellence as an incremental revenue stream. "Last year, we earned more than $1 million consulting with other paper companies," he said. O'Connor predicted MakeReady, the service platform for digital printers launched by Mohawk last year, will become a consulting business.

"At our core, we are a paper company," said O'Connor. "But we are rapidly becoming much, much more." He indicated that customers would soon see substantive changes in the marketplace.

On April 16, O'Connor said that Mohawk will radically transform its face to the world, with the following actions:

• The company will launch Project Streamline, a strategic consolidation of Mohawk's core paper lines, taking 22 paper grades (brands) down to six. For customers, Streamline is a simpler, clearer presentation of Mohawk brands and products, resulting in the elimination of more than 50% of its SKUs.
• A new technology/operations initiative, the Unified Service Delivery Platform will create a seamless purchasing experience for all customers from merchants to printers or small businesses. Customers will be able to choose how and when they want to do business with Mohawk.
• A new website will integrate e-commerce into all dimensions of Mohawk's online activities. The site provides a frictionless path for purchasing paper in small orders or large quantities.
• The new name of the company will simply be Mohawk. The company will also unveil a new brand identity. O'Connor noted that the "energetic" new logo suggests paper rolls, circuit boards, and connectivity. He described the color palette with words such as "fresh," "optimistic," and "youthful." He remarked that the new brand speaks directly to Mohawk's transformation—"an expression of who we are and what we are becoming."
• A new campaign—"What will you make today?—will also launch April 16. "This simple question goes to the passions of customers who use our papers to make things, or to make a difference in their business," O'Connor said.

"You know ...," he said, "this is also a question I ask myself every day: 'How can I make a more sustainable business'?'" O'Connor said he wanted to build a business "that can sustain any changes in technology or in the business environment out there.

"The last five or six years have been nothing like I've ever seen ... and we are transforming our organization so it can sustain itself -- and thrive -- in today's new environment."

TAPPI
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