Volume 8 | Issue 1 | Year 2005

Remember fax paper? Not the kind of paper you stick in the fax machine these days to get color print-outs, but the rolls of flimsy thermal paper, so called because the machine literally burned the image onto a frail substance that curled and faded almost as soon as the sheet was cut. (And, back in those Stone Age days of about 20 years ago, an automatic paper cutter was an option, so some had to use a pair of scissors to separate the sheets.) Today, the thermal fax machine is about as high-tech as a rotary phone. But back in 1986, Oji Paper Company, Ltd. established a wholly owned subsidiary in Massachusetts to serve the growing market opportunity for what was then a cutting-edge (even if the faxes couldn’t do the cutting themselves) technology.

Today, that technology is long out-dated. However, Kanzaki Specialty Papers has thrived by addressing new developments in thermal imaging in a wide variety of commercial, industrial, and consumer markets. Said President and CEO Stephen Hefner, “Uses for direct thermal imaging are skyrocketing and you’re likely to encounter a thermal printout several times a day. Speed, reliability, ease of use and maintenance, along with the finest quality output, have made direct thermal imaging one of the most popular means of business communication today.”

Hefner added, “Worldwide, the corporation as a whole is number one in this business. Our company specifically services North America exclusively. We’re number two in this market, but that’s mainly because we’re not interested in being a low-cost, high-volume commodity provider. This is not to say that cost is not a competitive factor, but rather that we’re primarily interested in developing custom applications to satisfy specific needs. The Japanese have always been noted for their strengths in efficient manufacturing to apply low-cost technology to deliver high-tech products. That’s the tradition we’re carrying out here.”

Kanzaki’s imaging, inkjet, label and tag products are used in a variety of retail, financial, medical, specialty graphics, commercial, and industrial markets. These encompass Point-of-Sale (POS) receipts, tickets, calling cards, bar code tags, wristbands and various package designs. Headquartered in Springfield, Mass., Kanzaki employs 250 people and operates a 350,000-square-foot manufacturing facility located at 23 acres in nearby Ware.

Synergies of Expertise
“We’re one of six Oji Paper operations worldwide,” Hefner notes. “There are three plants in Japan, one in Germany, and another in Thailand. A new facility is scheduled to open soon in Shanghai. The advantage for us at Kanzaki is that if we need to develop or use a particular process we can’t do here, we can draw on both the manufacturing resources and the more than 300 graduate chemists on staff at our sister companies.”

Manufacturing is highly capital-intensive, requiring highly skilled labor in the mixing of precise coating formulas. ISO-9001 certified since 1996, the company operates under the mantra of continuous improvement, ultimately driven by the ISO processes.

Hefner points out that just as his company is selling the latest technological applications, technological advances exert constant pressure on how his company operates, requiring constant investment in the latest equipment and procedures. “Printing outputs used to run two inches a second. Now they’re 12 inches a second. If there’s a wayyou can do it faster and better, you have to do it faster and better.”

Up against four major competitors in North America, quality and innovation account for an historical record of 6 to 8 percent compounded growth annually, a target Hefner fully expects to continue to meet for the next 24 months. “We sell a high-end product, and, sure, we have to be cost-competitive. But we’re also on the forefront of new technologies that help our customers work more efficiently, which reduces their costs. Effective bar coding, for example, means better inventory control, less waste, and reduced carrying costs. Our customers look to partner with us to achieve business goals to reduce cost-inefficiencies. They’re not looking to just buy a nice looking label.”

While the company partners with the R&D staffs of OEMs to meet their needs, Kanzaki also employs a pull-market approach. “We talk to retailers, for example, about the potential for effective bar coding or tagging, and they in turn start asking their suppliers for these kinds of capabilities,” Hefner explains.

Greater Thermal Efficiency
Over its history, Kanzaki has grown organically, addressing new market opportunities as they arise. One winning bet is on lottery tickets. “With only a few exceptions, every state has gone to thermal imaging for lottery tickets,” Hefner says. Why? “Because it’s more efficient than traditional printing. There’s less noise, less breakdown of the equipment. It’s a total operating solution to produce a quality product at an overall lower cost.”

Hefner also sees banners and high-resolution signs as another growth market, with thermal imaging enabling higher detail and flexibility. Baggage tags to track luggage is even more of a concern in these security conscious days. But one market Hefner thinks is set to really become a breakout category is digital camera photo printing. “Not just commercial grade, but at the consumer level, as well,” he says.

He adds, “Digital cameras have become more affordable, and now just about everybody has one, but not everyone is sure yet what to do with them. Sure, it’s great to email pictures over the Internet, and you can easily dispose of pictures that didn’t turn out the way you thought. But what about that picture you want to frame, or something you’d like to physically put in someone’s hands? Used to be you had to have that kind of thing professionally produced. Now, anyone with a photo printer and the properly coated paper can produce something of professional quality. And, now you can do more of it, at lower cost, whenever you want to. Our proprietary coating technologies are designed to provide superb imaging quality using current jet-ink printer technology, while maintaining the highest levels of whiteness, brightness, and fade resistance in the industry. I think that once people realize what they can really do with their digital cameras beyond image storage, and do high quality image reproduction without the expense of professional processing, this market is going to be huge.”

Hefner’s long-term outlook on Kanzaki is one of continued success. And it looks as if the company’s just beginning to break the surface of opportunity in serving dynamic markets where “looking right” matters both in appearance and process.

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