Color Resolutions International's Risk is Paying Off

By David Savastano, Ink World Editor | 10.25.05

The decision by executives to acquire the division from Borden in 2001 was a daring one. Now, with three years of success and their new plant in place, CRI's leaders continue to move forward.

In late 1999, George Sickinger, who was then vice president and general manager of Borden Chemical’s Ink Division, took the dramatic step of beginning the process to secure funding and acquiring the division himself, and set out to form an independent ink company.

The new company was named Color Resolutions International (CRI), a nod to the importance of providing resolutions to the application of color. The company would focus on its core market of corrugated, where it was the second-largest North American ink supplier.

Looking back on the past four years, it has been a challenging time for the ink industry, and probably as difficult a time as any for a new company to begin. Still, CRI has moved forward, maintaining its strength in corrugated and using its expertise to expand into other packaging segments.

In a further sign that the company is on the right path, CRI recently opened a brand-new $5.5 million, 70,000 square foot facility in Fairfield, OH, on a street appropriately named Quality Products Boulevard, which is allowing the company to better compete in the industry. All signs point to CRI continuing its success well into the future.

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Color Resolutions International’s new headquarters in Fairfield, OH.

The Formation of CRI
The beginnings of Color Resolutions International came when Mr. Sickinger was asked by Borden Chemical to find a company to purchase the printing ink division. Although the division had gone through some rough years, it had returned to profitability, but it did not fit within Borden’s core business.

After a while, someone suggested Mr. Sickinger take over the company himself. After talking the matter over with employees, who were worried about their jobs in the event of a takeover, and customers, who were concerned about the impact of consolidation in the ink industry, Mr. Sickinger secured the needed capital.

“Because of the set of circumstances, it kind of landed in my lap,” Mr. Sickinger said. “I shudder to think where we would be if somebody had bought us; however, it should be noted that the negotiations with Borden and the various capital sources took 14 months and put most of my own resources at risk. I didn’t sleep very well during the process.”

It was a risk, but the company has thrived. Mr. Sickinger brought along most of the people from Borden Chemical, allowing the new company to hit the ground running.

“Success doesn’t happen without the right people, and I wanted these people with me,” Mr. Sickinger said. “Everyone believed in what we accomplished and with our vision for the company. Just about everybody is from Borden, maybe 80 to 90 percent.”

After the new company was formed and the acquisition was complete, Mr. Sickinger invited his six key managers to purchase shares in the company. The ownership of CRI today is divided among seven executives: Mr. Sickinger, CRI’s chairman, president and CEO; John Edelbrock, vice president of manufacturing; Joseph Schlinkert, technical director; Paul Fulton, vice president of technical services; Hixon Boyd, senior vice president, business development; Dave Barker, vice president, business development; and Jim Distler, vice president, specialty products.

CRI now has a world-class facility to go with its service and new products. Still, in any business, people are critical to a company’s long-term success, and CRI is no exception. Having watched how Borden operated, Mr. Sickinger has strong ideas for providing opportunities for employees.

“Promotions should be based on your knowledge and the results it brings,” Mr. Sickinger said. “Being part of Borden, typical of a company their size, incentive plans were not inclusive enough. I wanted to build incentive plans into the company.”

“We have so many talented people, and it’s our people who make our company what it is today,” said Wanda Wallace, human resources manager. “We have programs that reward knowledge and skills, and we offer opportunity for success. George has been focused on these values.”

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George Sickinger, Color Resolutions’ chairman, president and CEO.

Corrugated and Beyond
When Mr. Sickinger formed Color Resolutions, its focus was on packaging ink, and its primary niche was the corrugated market.

“I think we’re in the right place,” Mr. Sickinger said. “Corrugated is the most important market for us. We’re starting to see growth in corrugated. It’s starting to turn around and do much better.”

Right from the beginning, the company decided that packaging would remain its focus, and divested segments that didn’t fit the core business.

“We looked at every aspect of our business when we acquired the company,” Mr. Sickinger said. “We sold two product lines, our carbon black dispersions and a small UV niche.”

Today, CRI continues to be an industry leader in corrugated, and has leveraged its expertise into other packaging segments.

“We’re noted mostly for corrugated, but we’re making inroads into flexible packaging, flexo folding carton, envelopes and other markets,” Mr. Sickinger said. “Our manufacturing/product platform is quite unique and allows us to sell and service many market niches outside of corrugated. The hard part is breaking down new doors and finding people who are really good at it.”

In order to meet their customers’ needs, the R&D department headed by Mr. Schlinkert coordinates the lab work with production.

“Product development is the strength of Joe’s group,” Mr. Sickinger said.

“Working closely with manufacturing allows production to be very responsive to customers,” Mr. Schlinkert said. “This is supporting our core business, corrugated, such as high-end process work and very fine line aniloxes. As a result, our inks are more user-friendly.”

New products such as Newtrol inks are helping drive CRI’s successes.

“We have made real inroads,” Mr. Schlinkert said. “Our Newtrol line is very successful. It’s a total pH stable line, and doesn’t require pH adjustment. Press operators are very busy, and Newtrol is more user friendly. It also offers really good resolubility and is more efficient, which is essential because press time is so costly.”

“Newtrol was first introduced in 2001 to our key customers who had a preponderance of long run work,” said Mr. Sickinger.

Marketing is also playing a key role in the company’s move into new segments.

“We are increasing our efforts in promoting Color Resolutions in markets we haven’t been in before, through advertising, trade show booths and attending trade conferences,” said Kathe Edwards, marketing services manager.

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Customer Support
An excellent portfolio of products can go a long way toward leading a company to success, but without strong service, a business can only go so far. CRI has put its resources into areas that customers value, such as being where customers are located.

“We believe in putting resources near our customers,” Mr. Sickinger said. “We had a pretty good length of time to develop our approach. We now have 16 blending sites, many more in-plants and have added facilities in Mexico.” Providing expert advice is another area where CRI excels.

“Where you can shine is in bringing expertise that results in improved productivity and print quality for your customers,” Mr. Sickinger said.

“We don’t take anything for granted,” said Mr. Fulton. “We want to see even stronger partnerships with our customers. What we recognize as a company is that customers value expertise, and we saw the opportunity to take our outstanding service to a world-class level, by developing and sharing our knowledge base more effectively with our technical specialists.

“Our value is our understanding of the entire printing process,” Mr. Fulton added. “We find that customers blame ink when they have a problem. We’ve hired graphic specialists to assist printers with their quality, process and substrate needs. We routinely put on hundreds of training classes at customers’ plants, both fundamental and advanced. It’s an important element in providing support and value.”

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CRI’s New Facility
When Color Resolutions was formed in 2001, the company had a three-year lease from Borden Chemical to use its old Cincinnati facility. Right from the start, Mr. Sickinger knew that a new facility was needed to allow the company to compete more effectively, and the new plant provides efficiencies and the ability to expand to do just that.

“We wanted our system to flow smoothly,” said Jerry Ogg, CRI’s plant manager. “Our old facility was actually four buildings, and we had to use a forklift to manually move our products.”

Automation and bulk systems have helped the company achieve its goals.

“We automated systems and put bulk storage inside,” Mr. Ogg said. “We have incorporated our suppliers into our plant design, whether it is adding bulk tanks or eliminating activities. Because we are now computerized, we can charge a tank and push the start button, which has helped to improve consistency. We also have pack-out systems, which read levels in every tank and set cycle times to agitate. It now takes 20 seconds to fill a pail. As a result, we’ve gone from 8,000-pound batches to 24,000-pound batches.”

“The goal is not necessarily to have the biggest plant in town,” Mr. Sickinger added. “We want efficiency. We want to operate at the speed of customer demand, which helps to reduce everybody’s inventory. We needed to free up capacity and eliminate errors, so we designed our new plant so that we could easily expand without adding capital equipment or space; however, the plant was designed and positioned for a 50 percent expansion should it become necessary in the future.”

“We are well positioned for growth,” said Mr. Fulton. “There is no capacity constraint here, and we have extended our two-shift operations.”

The move started in December 2003, and it went smoothly. “We moved here in December without a single hiccup, and we’re very pleased with that,” Mr. Sickinger said.

“Our move was so smooth it was transparent to our customers,” Mr. Fulton added.

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CRI’s new bulk tanks.

Lean Manufacturing
Competition has been fierce in the ink industry, and pricing has become far more competitive. Meanwhile, raw material prices and energy costs continue to escalate, making margins that much tighter. In order to survive, companies have to become much more efficient.

In conjunction with its new facility, CRI has committed itself to implementing Lean Manufacturing, which ultimately looks to develop just-as-needed work flow and efficiency.

“The truth is that nobody willingly or knowingly pays for your waste,” Mr. Sickinger said. “We’re working on Lean, and its principles are based on common sense. Some of our best customers are doing Lean, and Paul Fulton has been exposed to Lean at our customers’ plants and has learned first hand how important it is for CRI to adopt the same principles for our business. Our suppliers have also helped us a lot in setting up our systems.”

While the program has been successful, Mr. Sickinger emphasized that the Lean process is continuous.

“We’re down to the minutes in terms of savings,” Mr. Sickinger said. “By having a visual workplace, you can see where everybody walks, and create less walking for tools, faxes, etc. However, it’s an ongoing process. You’ll lose 30 percent or more of your improvements if you don’t stick with it.”

“For Lean Manufacturing, we have teams addressing bottlenecks,” Mr. Ogg said. “We look at our process from the time raw materials come in until the time the finished ink leaves the dock.”

Lean isn’t only used for production. CRI is utilizing Lean principles in its transactions, including installing its new Enterprise Resource Planning (ERP) system.

“Our ERP system is the next evolutionary system, and it is up and running,” said Richard Gray, vice president, finance and CFO. “We are piggybacking it on Lean to cut out waste and be a lot more efficient.”

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The Future for CRI
The risk has proved to be worth it for CRI’s leadership. Despite the downturn in the economy, CRI has thrived.

“The economy has been a tremendous test of our people, and we feel a lot stronger for it,” Mr. Sickinger said. “In 2001 and 2002, we beat our projections. In 2003, there were increasing pricing pressures and some business was lost, although it was still an okay year, just not as good as 2002. In 2004, we took a lot of cost out and we expanded our sales base. 2004 was a significantly better year than 2003, and more importantly, the company is better positioned for solid and diversified growth.”

While Mr. Sickinger anticipates leading CRI for many more years, he knows that plenty of companies that have lacked succession plans have fallen into decline.

“Even though I hope to do this five or 10 more years, we’re working on our next phase of strategic planning, for succession for each key position,” Mr. Sickinger said.

With its solid foundation in place, Color Resolutions International is perfectly positioned to continue its success in the coming years.

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