- The Washington Times - Friday, February 9, 2007

A Wisconsin manufacturer has pulled production away from its Asian rivals and now is competing successfully against them.

Coating Excellence International (CEI) was created in 1997 in Wrightstown, Wis., and makes various types of high-technology packaging that involve applying plastic to paper — items such as sugar packets, the wrapping on copy paper reams and bags for pet foods, birdseed and more.

The company has grown from 13 persons and $7 million in sales in 1997 to 350 employees and $140 million in sales last year.

In 2005, it reclaimed the manufacturing of Sweet ‘N Low packets that had been sent to South Korea by adding robotics and lowering costs so that CEI could beat the South Korean manufacturer.

It also is successfully competing against China in producing synthetic woven bags for such items as grass seed and fertilizer.

“We really have to go after right now the higher tier,” company President Michael R. Nowak said.

Many similar bags were and are being produced in China, but CEI has been able to use its technology to cut into China’s share, at least in the high end of the business.

Bill Welch, president and chief executive officer of the Fox Cities Chamber of Commerce and Industry in Appleton, Wis., praised the company’s competitiveness.

U.S. companies need to be able to add value if they are going to compete, and CEIhas “obviously found a way to be very successful at what they do,” he said.

Once Mr. Nowak’s company figured how to apply sophisticated printing to the bags, it was able to produce consistent, high-quality durable bags that would appeal to retail customers, unlike those made in China, he said.

Last year, the company sold about $5 million worth of the woven bags and expects to sell four or five times that amount this year.

The company is able to compete for customers who need fast turn-around times, Mr. Nowak said, noting it can take several weeks to get a shipment from China.

A company needing bags in a few weeks might “be willing to pay a little bit more in order to have that and not get stuck with all kinds of bags they aren’t going to use, because the customer decided to change the design on it, or something,” he said.

For a company like pet food maker Purina, a new client, it is important that all the packages have the same colors, so CEI’s superior printing abilities is a big selling point, Mr. Nowak said.

If packaging has a picture of an ear of corn on it, for example, he said, and the customer doesn’t care much about the shade of yellow, “he’s probably going to buy his bags from China.”

Companies now sending business to China because of low prices will learn over time that buying there is not necessarily that easy, he said.

He said higher-end products could be made in the United States with the lower-tier products coming from China, at least in industries in which the market is big enough for the more expensive products to make a profitable business.

Jason DeHaven, president of animal feed manufacturer TizWhiz in South Charleston, Ohio, said his company has been using CEI’s 50-pound bags for animal feed for about 60 days and prefers them to the overseas competition.

He praised CEI’s shorter lead time and better quality than imported bags.

According to Mr. DeHaven, the U.S.-made bags have a “nicer shelf presence.”

Hank Cox, spokesman for the National Association of Manufacturers, praised the Wisconsin company for exploiting its advantages, such as proximity to U.S. customers and understanding of the domestic market.

“More manufacturers need to look at it that way,” he said.

It is not clear how many companies are reclaiming business from China, but Mr. Cox said CEI’s experience is “not an isolated event.”

Some U.S. companies are being hurt by Chinese competition, he said, but “many others” are taking on the Chinese challenge.

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