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CASE PAPER -- Thriving in Philly

March 2002
BY CAROLINE MILLER


Case Paper believes in commitment—both to its customers, employees and the local community. It's a philosophy that is embodied in the recently completed expansion at Case's Philadelphia operation, which is now said to be the largest non-mill converting facility in North America.

Located in North Philadelphia, this 700,000+-square-foot warehouse, converting and distribution operation houses eight sheeters, five trimmers and five slitters/rewinders. Case Paper acquired the facility in 1988 as part of an acquisition of another paper company.

At the time, the acquisition was an easy way for the 59-year-old, family owned business to expand into the Delaware Valley area, recalls Robin Schaffer, executive vice president of Case Paper. The merchant was already shipping paper to the Philadelphia area from the company's then-headquarters in Long Island City, NY.

Initially, the Philadelphia operation—one of six Case facilities across the nation—was focused on board stocks, while the Long Island City headquarters focused on printing papers.

"Our trucks kept criss-crossing each other on the highway. We were shipping board out of Philadelphia to New York, and paper from New York to Philadelphia and New Jersey. It didn't make sense. We realized that we needed to improve our distribution network to maintain our efficiency commitment to our customers," adds Peter Schaffer, Case president and Robin's brother.

The siblings realized that the two operations had to be combined. They considered closing down both the Long Island City and North Philadelphia sites, in order to open a state-of-the-art facility in suburban Bucks County, PA. But the city of Philadelphia was about to offer another alternative.

Good Deal With the State

The building that the Philadelphia plant was located in was about to be designated as a Keystone Opportunity Zone (KOZ) by the state. KOZ sites are specific areas in Pennsylvania with greatly reduced or no tax burdens for property owners, residents and businesses covering a 12-year period. In most cases, the exemption extends to state and municipal taxes.

Even so, while the offer to stay in Philadelphia was certainly tempting, there were still some potential drawbacks. First, the Philadelphia operation was located in an aging, three-story, inner-city factory that had once served as a Philco radio and television assembly plant. It was not exactly conducive to the needs of a paper converting, warehousing and distribution facility.

"Anyone will tell you that you've got to be crazy to run a paper business on two floors," chuckles Robin Schaffer, with amusement.

The question remained: How would Case employees move heavy skids of paper from floor to floor efficiently. "We have freight elevators, but they are slow and only have a capacity to handle 20 skids at a time," he notes.

The answer to the dilemma came from within Case itself. They had a one-of-a-kind vertical lift designed and built. The lift enables employees to load skids via forklifts onto an in-feed conveyor. The skids are then moved to the second floor by a lift and then onto an out-feed conveyor.

"If we didn't have this lift, we wouldn't be here," admits Peter Schaffer. The lift can handle 240 skids per hour. "We only need to run it about four hours a day; it can do more than we ever need to do," he adds.

With the lift in place, the company was able to effectively take over and utilize the second floor of the building, in addition to the ground floor that they already occupied. Case Paper also took over two-thirds of the adjacent building, as well as the option to lease the remaining third of the building next door.

Today, Case Paper Philadelphia houses 50,000 tons of paper and board, and has a 20-car railroad siding and 21 truck bays to service the Northeast, Mid-Atlantic and Canadian markets. "We have enough space now to take us through the foreseeable future," remarks Robin Schaffer.

The decision to remain in the inner city has benefitted the company in other ways, as well. "We were able to keep our workers at this facility, plus expand and hire an additional 60 workers," says Peter Schaffer.

Sticking by Its Employees

By staying in Philadelphia, the company was able to stay close and convenient to its work force. "We've found that by staying here, we have access to a highly skilled, blue-color labor pool. Part of the problem with moving out into the suburbs is that you don't always have access to your workers. We've found that when companies relocate their factories to the suburbs, it's because it is convenient for executives, not for the employees," he contends. "We have a commitment to stay close to our workers—a commitment that we've made at all of our facilities. That's why we're in the heart of the city."

And the efficiencies that might be found at a single-floor suburban facility are less important than the financial benefits that Case is realizing by staying in Philadelphia. It's a cost-savings that has served the company well in an economic downturn.

"Last year was a really tough year," concludes Peter Schaffer. "Prices are depressed and business is slow. There was also a record number of bankruptcies in 2001. We are hoping that the business climate starts to improve the second half of this year. This expansion has been good for us because it has placed us in a better position to take advantage of business when the economy does turn around."
 

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