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Paper-making machine key to expansion at National Golden Tissue

April 20, 2013|By C.J. LOVELACE | cj.lovelace@herald-mail.com
  • President and Chief Operating Officer of National Golden Tissue, Inc. Randy Suliga stands in the warehouse of the Hagerstown plant Friday. The paper manufacturer is planning an expansion of the plant in Hagerstown.
By Colleen McGrath/Staff Photographer

Many standing more than 25 feet tall, massive rolls of paper by the dozen are stacked neatly toward the rear of National Golden Tissue’s manufacturing plant in Hagerstown.

Those rolls — purchased and shipped in from places such as Maine, Wisconsin and the Carolinas — cost the paper product manufacturer about $10 million each year, according to President and Chief Operating Officer Randy Suliga.

Those upfront costs could be cut by 20 to 30 percent by producing the paper locally, thus eliminating the expensive shipping costs, he said.

“Our money is being spent to keep jobs going in those states,” Suliga said Friday. “So easily, when we start up (our own paper-making) machine, we expect to grow. That $10 million will be spent right here.”

Suliga said National Golden Tissue, which made nearly $20 million in sales in 2012, is currently in talks with a group of investors who represent a foreign company that builds the paper-making machines, costing anywhere between $3 million and $50 million depending on the size and capacity of the unit.

National Golden Tissue can’t afford the new venture on its own, so investor support will be crucial to making it happen, but Suliga said the company is very pleased with meetings this past week and “extreme progress” has been made garnering that support, which could be in the form of a $30 million investment.

“Both sides want to go along with this party,” he said. “Our investors agree. They saw the area. They believe Hagerstown is the place to make it happen.”

To install the needed paper-making machine, National Golden Tissue — producing its own brands of processed products as well as for other companies — needs room to expand. A new $2 million processing machine is being added to the company’s current facility on Willow Circle later this year, which will push the 130,000-square-foot space to capacity, Suliga said.

Suliga said the longterm goal of the private family-owned company, headed by brothers Sam and Gus Shahrooz, is to purchase the former 1st Urban Fiber plant near the intersection of Eastern Boulevard South and East Memorial Boulevard to start its new paper-making venture.

The growing five-year-old business had looked into the 15-acre property about two years ago, but tabled the idea after learning how steep the initial asking price was, Suliga said, although he noted he has a very positive relationship with the current owners, a Canadian company named Cascades Tissue Group.

However, Suliga said the prospect has become very real possibility over the past three months since receiving much support and guidance from local, state and federal officials as well as numerous community and business leaders.

“They’ve been terrific to work with,” he said. “It’s been a fabulous relationship. ... We’re trying to swing this on our own. The state’s been very good. The county’s been very good in helping out with some of the energy. Hagerstown, the city, the community, the developmental committees have put in a lot of effort to grabbing everyone together at one time to make this happen.

“If we all just do something a little, we can be here,” Suliga said. “We can grow.”

Should the purchase of the new facility come to fruition, the first paper-making machine, which is very bulky and takes about a year to build and install, would allow for the company to add 91 new jobs, according to Suliga.

A second machine would then be slated for installation the following year, further increasing employment opportunities and local production of raw materials and processed final product, Suliga said, which would ultimately allow the company to get into selling the large rolls of paper to other processors.

Although that purchase and new venture will depend highly on investor support, the owners of National Golden Tissue finalized their purchase of 775 Frederick St. in Hagerstown on Friday and will begin working toward opening a new wholesale retail outlet there by the end of this year, Suliga said.

The idea with the outlet is to offer a savings to customers and other businesses, but also give some of those local businesses an avenue to sell their products in the store, he said.

Suliga said the store will function like a big-box club store, but without the membership requirements. Its offerings will include the company’s paper products, plus a variety of local consumer goods at bargain prices.

Additionally, the new venture will create dozens of new jobs, he said, including positions for store clerks, managers, truck drivers and other behind-the-scenes staff in areas like sales and accounting.

“The growth of the business, the number of employees, will be determined by how successful the business is,” Suliga said.

National Golden Tissue employs 56 people at its current facility, but could push that overall figure to 341 employees if all goes as company officials anticipate, meaning it could create about 280 new jobs throughout its planned expansion over the next few years.

Numerous new hires are expected to take place later this fall when the company adds its newest processing machine to the 858 Willow Circle facility, Suliga said.

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