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ST Tissue looks to grow at revitalized Isle of Wight, Virginia paper mill

ISLE OF WIGHT, Virginia (From the Richmond Times-Dispatch) -- Sahil Tak made a living for six years doing industry research for an investment banking firm on Wall Street.

"It was financially rewarding, and I learned a lot," said Tak, a 40-year-old Goochland County resident. "But I felt like I was not necessarily in a position to create value or make anything tangible."

But for the past five years, Tak has had a very different sort of work commute, and a whole new mission.

He travels weekly from his family's home in Goochland to spend several days in Isle of Wight County, where he and about 100 employees of his company -- ST Tissue LLC -- are working to revitalize a paper mill that had been the local community's business mainstay for generations before its closure in 2010.

In 2012, ST Tissue, which was started by Tak and his father, Sharad Tak, reopened an idled part of the International Paper Co. plant in Isle of Wight near the city of Franklin. Since then, the company has been producing paper for the commercial napkin and paper towel market.

It hasn't been an easy job, but Tak, who serves as the company's vice president, said he finds it rewarding.

"What I love about this is we are able to create jobs and help people improve their lives, especially in a rural area," Tak said during a recent interview at the plant. "Rural areas are suffering right now with job loss and population decline."

Few communities in Virginia know the trauma of losing such a major and deep-rooted local employer as the communities do that surround the towering paper plant on the Blackwater River. When International Paper closed the site in 2010, about 1,100 people lost their jobs.

The factory had employed about 2,600 people when International Paper acquired it in 1999 from longtime operator Union Camp Corp., which had a presence in the community since the late 1800s.

In 2012, Memphis, Tenn.-based International Paper reopened part of the plant and hired 200 people to make fluff pulp, which is used to make disposable diapers and hygiene products.

Not long after, ST Tissue took over another part of the factory, purchasing some equipment from IP and signing a long-term lease for the land. ST Tissue restarted one of the idled paper-making machines, which had to be refurbished to produce tissue.

"When people hear tissue, they think of facial tissue," Tak said. "But we are servicing the away-from-home market."

ST Tissue does not have its own brand, but makes tissue for distributors that serve customers such as janitorial services, schools, fast-food restaurants, retail stores and office buildings -- customers who often buy the typically brown-colored paper goods that ST Tissue makes from recycling waste paper and cardboard.

The commercial market has shifted more toward recycled, brown paper because it is seen as more environmentally friendly, Tak said.

ST Tissue is marking its fifth year of operations at the mill with an expansion.

Last fall, the company announced plans to invest $35 million to refurbish and restart a second paper machine.

The expansion, now under way, will increase capacity by more than 45,000 tons a year and is expected to create 50 new jobs, in addition to the 100 that ST Tissue already employs.

"I think we are going to be higher than that," Tak said. "We have already started hiring some folks."

As part of the expansion, ST Tissue is starting its own converting operation, which will help reduce shipping costs. "There is an efficiency to be gained by not shipping it twice," Tak said.

Since it started operations there, ST Tissue has been making tissue in bulk rolls, which it sends to other businesses that convert it into napkins and towels and ship it to distributors.

ST Tissue does not disclose its revenue, but Tak said it is the 10th largest manufacturer of tissue in the U.S. in a market of $15 billion a year, and it is operating profitably.

When the company first moved into the idled part of the factory, Tak recalls that it was "like a ghost town; no one was on site."

Now, it is humming with activity again, and some former International Paper employees are working there again. Staff members who have returned include longtime plant employees Chris McGrath and Nick Bales, both of whom started working there in the early 1990s when it was run by Union Camp.

McGrath and Bales said employees had long worried the factory might be closed, especially when devastating floods hit the area after Hurricane Floyd in 1999, damaging some factory equipment. When International Paper decided to reinvest in the plant after the flood, their fears were allayed.

"We kind of thought that we were out of the woods," McGrath said. When the decision to close the factory was announced a decade later in late 2009, "it definitely blindsided us," he said.

McGrath said he took a job with what is now Dominion Energy after the closure. "The folks in this plant that I knew did a fairly good job of finding work," he said. "A lot of people went to the shipyard" in Norfolk, he said. Bales went back to school to study respiratory therapy.

They both returned to the plant in 2012 when ST Tissue hired them to restart it, and they are both among the supervisory staff now.

The process starts with anywhere from 15 to 20 tractor-trailers arriving daily at the fiber recycling center that ST Tissue reopened near the paper factory, delivering tons of waste paper and cardboard, which is stored in bales in a 90,000-square-foot warehouse.

The recycling involves removing all the foreign matter from the waste paper, such as plastics and paper clips.

The paper is then chemically treated to further clean it and remove contaminants such as ink, and it is transformed back into pulp -- a substance of mostly water mixed with some fibers -- then sent through a conveyor system to the paper factory where the water is removed and the brown paper emerges in massive rolls.

Tak said the company is competing in an industry dominated by larger firms by focusing on quality and service, and by supplying smaller, independent tissue converters.

"We don't have as many fixed costs as a larger company. We are pretty lean," Tak said.

ST Tissue's investment "has been great for the local economy," said Amanda C. Jarratt, president and CEO of Franklin Southampton Economic Development Inc.

Since the 2010 closure of the paper factory, the local economy has not fully recovered all of the job losses, but it has regained a significant portion of them, said Tom Elder, director of economic development for Isle of Wight County.

Those job gains have come thanks to ST Tissue, along with International Paper's reopening of part of the plant, and other business investments in the area such as Green Mountain Coffee's opening of a coffee roasting, grinding and packaging plant in Isle of Wight that employs more than 500 people.

"We are much more diversified in Isle of Wight and Franklin now," Jarratt said.

ST Tissue decided to set up operations in the area because the plant itself was well-maintained, close to customers, and offers room for growth, Tak said.

"More important than the assets is the people," he said. "There were a lot of good people here who know how to operate this facility. They are highly flexible and can do a lot of different jobs. Everyone here is entrepreneurial."

The importance of a good team was a lesson Tak and his father learned when they created ST Tissue and got into the paper business in 2007 by buying a paper factory in Wisconsin.

That plant was financially distressed, and Tak said it turned out to be a more challenging turnaround job than they expected.

"It was a trial by fire," he said. "We almost went bankrupt with that facility, but we were able to turn it around. We had a great team that helped us turn it around, and we realized how important it is to have the right team and workforce."

Tak's parents emigrated from India in the 1960s. His father, a computer engineer, is a serial entrepreneur who started and sold ST Systems Corp. which provided IT services to federal agencies such as NASA. "He is the kind of person who likes a challenge," Tak said of his father, who lives in Florida but helps manage the company's strategy.

Tak's wife, Rupa, also is an entrepreneur. She and two business partners in the Richmond area started GoFar Snacks, a maker of nonallergenic snack bars.


Tak studied business at Boston College. He decided he wanted a challenge, too, after a few years working on Wall Street. Market research led him and his father to the tissue business, which Tak said is seeing "slow and steady growth."

"A lot of manufacturing jobs have been dying out. Here, at least we are adding some jobs," Tak said. "We are creating value, for the community and for families. That part of the job really resonates with me."


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