GLENS FALLS — Finch Paper has gotten more efficient in the last few years and plans to use its profits to make many capital upgrades in 2019.
Chief Financial Officer Alex Rotolo said 2017 was a tumultuous year in the paper industry as a lot of companies went out of business. While that was not good for those employers, it caused paper prices to increase as the supply shrank.
“Because the market finally balanced, we were able to get fair prices for our paper and make a profit,” he said.
Rotolo said the company is poised for a strong year.
“We’re taking the funds that we were able to make in 2018 and investing them back in the business in 2019 in the form of capital improvements. We have a higher capital budget than in any recent history,” he said.
There are 84 projects in Finch’s capital plan, according to Rotolo. This includes hardware and software upgrades to the paper machines. The overall goal is to improve the quality and speed at which the company can change the machines to handle different types of paper, according to Rotolo.
“The machine can quickly see little changes and make changes so the paper quality is more uniform, and also just reliability. Our control systems are old so we’d like to have new systems,” he said.
Other improvements include high-voltage electric upgrades to improve the resiliency of the systems and protect against power failures from the grid, upgrades to the waste treatment plant and improvements to the sheeting assets for increased capabilities and improved efficiency.
A project to upgrade the wood yard with a new chipper that can handle longer logs is on hold because Finch did not receive a state grant. It does not make sense for the company to do it without that state funding, Rotolo said.
Rotolo did not disclose the cost of the improvements, but said it was many times what the plant has invested previously.
The company is looking for more skilled workers to help implement these projects. Finch’s head count decreased from about 650 five-plus years ago to 570 currently. Rotolo said the company was trying to right-size employment levels to be on par with its competitors.
“A reason we didn’t go out of business in 2017 was the work we have done to improve the facility and make it more efficient,” he said.
Now, Finch is hiring.
“Our head count is becoming more in the competitive state. Where we weren’t replacing positions before that weren’t deemed critical, we are now looking to replace as we lose (people),” he said.
Among the issues that Finch and other industries face are high energy costs in New York state, according to Rotolo.
“The natural gas and the energy prices and fluctuations make it very hard to do business in New York state,” he said.
The problem is a difficulty for supplying energy to the region north of Albany, he added.
Finch also co-generates about two-thirds of its energy needs. It uses biomass as well, according to Rotolo.
“We also burn our other byproducts and recapture those chemicals to send back to the paper mill,” he said.
In addition, state regulations are more stringent than other parts of the country.
Finch has to constantly evaluate its procedures to stay competitive.
“We’re still in a declining industry. We need to continually increase our efficiency to compete with international markets,” he said.
Rotolo was optimistic about the coming year.
“We’ve increased production, we’ve lowered our fix costs and we’re looking forward to 2019. Finch is hiring. If you have certain skills, we’re interested,” he said.