Gmund's Paper Making Tradition Interview Part 1

Lake Tegernsee

Established in 1829, Gmund is a fine paper mill in the German village of Gmund, located near Austria and the Bavarian Alps. This relatively small mill is actually able to produce a wider range of colors and textures, in part due to the owner’s decision to maintain and operate Europe’s oldest paper machine, affectionately known as the Old Lady. Some of their accounts include Adobe, Donna Karan, Bacardi, and even LCI Paper.

Earlier this week, I had the opportunity to speak to Herbert Eibach, Gmund’s Worldwide Sales Director, overseeing accounts in 80 countries. You’ll hear Herbert relay some fascinating stories about Gmund’s history as he talks about some of the reasons why this small paper mill is able to succeed. While you listen to the interview, feel free to visit our blog to see photos of Gmund. You can also visit Gmund’s web site at Gmund.com. Now, let’s hear from Herbert Eibach, in part 1 of our 2 part interview.

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Herbert Eibach

Here is a transcript of the interview:
Herbert Eibach: Eibach

Guten tag, Mr. Eibach?

Hi Josh! Good to hear you!

Good to hear you too. So, shall we begin?

Yeah, we can start.

Ok. Can you tell me a little bit about yourself and about your role at Gmund?

Yup. My name, my first name is Herbert. So the full name is Herbert Eibach. And I’m now within Gmund for 6 years. My role is Worldwide Sale Director, serving with a great team. I have 80 countries and potentially even more in the future. Prior to this role, I have been working for Hewlett Packard in worldwide marketing for large format printing, so also being involved in paper and printing. And prior to this, I have been working for a US company, also US company; it’s Avery Dennison labels. Responsible in product marketing for small office/home office segment – everything what is 8 ½ by 11 – I was in charge of those products for Europe.

In 1829, what do you think was the motivation for Gmund starting a paper business?

The motivation has been that there was no paper mill around in this area, so there was certainly a demand for paper. And there was Mr. Nepomuk Haas who saw this opportunity from the mayor to build a business at this specific location next to the river. So he thought the best business opportunity at that time would be to start a paper mill. At that time, clearly, it has been a hand-made paper mill and the delivery was by horse around the lake which is nearby, Lake Tegernsee. So the radius and distance has been around 20 to 30 miles where we delivered Gmund paper in 1829.

Is the facility located in the Bavarian Alps?

Correct. Gmund, our brand, is also the name of the village where we are located. The village is a small, tiny village, about 5,000 people living here. And we are right next to the Bavarian Alps. And on the other side there is Austria already. So we are about 30 minutes by car away from Austria.

What kind of impact does the mill have on the local population, and are you a large employer?

We are definitely one of the largest employers in this area. Our neighbor is the largest. They are manufacturing currency paper, for instance, the entire euro or the Indian and Indonesian rupiah. And Gmund has 110 people which is, for our area, a large employer.

And you mentioned the initial owner of the company, but let’s jump up to the Kohler family who recently took over the business, as recent as 1904, haha.

Yeah, that’s true.

So the company is coming up on your 105th anniversary?

Absolutely. So, family Kohler took over in 1904 and it was not always an easy time for them, as in 1921, the first owner, Mr. Ludwig Kohler, has been fallen into the machine. A long coat in wintertime got fetched by the machine, and he got pulled into the machine, into the drying drums, and he died immediately in the machine, in the same machine from 1883 which we still have and operate by today. You in the US, you say, if someone is very strong involved in the business that he’s with his heart and blood in the business? This we would say in Germany and in this case it would be really true, as the family’s blood is in the business involved.

Right. Right. Wow. Tell me more about the old machine. You’ve already given me one heavy story, but you indicate that it’s Europe’s oldest in service paper machine. And on the web site, if people would like to check that out, the photo of its black finish with painted red accents is striking. And what more can you tell me about the old machine?

Oldest Paper Making Machine Old Lady Yeah the old machine actually is being called “Old Lady” within the mill. We got her in 1883 so her birthday is this year, 125 years in 2008. And the plan has been once to make a replacement. It was back in 1979 where we got a newer machine, a more modern machine, faster and wider. And we wanted, as Gmund, to replace the old machine. That has been the plan from management and family Kohler. But it was not possible. We could not reproduce certain papers we did on the old one on the new one. And therefore, we had to change the strategy and keep both machines at the same time. So we have certain grades we produce only on the old one. And as this was such an emotional situation, we gave her the name, at that time, “Lady,” “Old Lady,” as she prevented us from selling her and discontinuing. The machine is still running every 2 weeks. So for 2 weeks, and then we have the 2 weeks break where we do our own maintenance and cleaning.

And it’s the oldest machine in Europe, we know for sure, also in the US, as far as we are informed, and also in Asia. But of course, if you know that there are about 600 paper mills only in India, it’s hard to say and prove it whether this is really the worldwide oldest machine. But for Europe, we know it for sure, and for the US as well.

Ok. My dad works on envelope machines for all of his adult life, so I’m interested in hearing about maybe 1 or 2 of the trusted mechanics who maintain the “Old Lady.”

Well, we have the team of 6 people. They only do maintenance on the machines. Those people we have for, it depends, but 25, up to 40 years, working for the company, so they know every piece, every corner, every screw of the machine and they take care about it so that we have always best quality to produce and to supply to our customers.

Well, let’s jump to another topic, your FSC certification, Forest Stewardship Council. Can you talk about some of the steps the business has gone through to achieve this?

Correct. Well when the FSC came up and we got approached by the companies, whether we would participate, we gave a thought about it and due to the situation that we have been always extremely environmental friendly due to our location. We are located in an environmental protected area. So typically, only tourists would come here to the Lake Tegernsee and to Gmung Village to spend a vacation here. Given this situation and reason, we immediately said, “Ok, we want commit to FSC.” And then, we do it in a proper way so that the entire mill is going to be certified and not only specific grades of papers where we would see a marketing advantage in the market. So we really committed to the entire FSC transaction. This took us almost a year of preparation, change, documentation, and auditors we had at the mill.

Beyond this, it was not enough for Gmund to have only FSC certification, because this would only cover and talk about one part of the product, of the paper, and this part would be the fibers. But there’s much more about paper that’s being involved and getting involved into the environment, like water, like ink, the dyes we are using. How would we treat the fresh water? How would we treat the waste water and all the components that are around paper manufacturing? So we initiated the 100% eco sustainability. This means that the majority of our energy comes from water power and with the target that by next year, 2009, we will have 100% energy being used out of water power, absolutely no CO2 emission on this part. And the other part is that we just built up a new power generator and we will switch next year, by end of January 2009 to the new system with the target to reduce our emissions of the mill CO2 by 50%. That’s quite aggressive target, and, but we have always been a leading in the environmental statement. This is not anything new for us. This we practiced over the last 30-40 years already.

Excellent. Tell me about the new generator. How will it generate its power?

By gas. By gas and then we have a combined… All the heat what we generate, we can reuse in this generator.

Ok.

Everything of the heating in production and also in the company, we can reuse and feed back into the generator during the night.

Excellent. And what are some of Gmunds most environmentally friendly paper lines?

Depends on how you look at it. It’s, it’s almost impossible to give a clear answer on this one. So all paper we produce are 100% eco sustainable. And now, if it comes to the different raw materials we are also using, it’s hard to judge what is more environmental friendly than the other one. We have 100% cotton paper. We have FSC certified fiber production. We do have 100% FSC post-consumer recycling papers. So they’re all environmental friendly. It depends how you look at it. So for your information, in Australia, they would not see cotton as environmental friendly because this plant, to grow, needs more water. And water is a big issue in Australia. It’s always, or, it’s never enough. So therefore, they don’t see cotton as environmentally friendly. If you ask the same question in the US market, they would see it as environmentally friendly.

Let’s talk about water. I was interested in your ozone-based water purification plant.

Correct.

Can you go into that?

Yeah. So the ozone purification system is the only installation in the world being used by a paper mill. We got an award from the Bavarian government for this environmental piece of production. What it does, it cleans up our waste water to a level of drinking water quality without using any chemicals. So just while utilizing ozone, we use the light, the sun, the UV, transform it, and by this process, without using any chemicals, we can spin off the water pigments from the dye color pigments, separate it, then the dye, we can recycle. And the water will be going to the local cleaning company and then afterwards, into the river. The river is a drinking water resource of Munich City, up to 30%, and therefore we get checked by the government every day about our waste water. And this is why it’s so outstanding and unique in the world.

That’s an amazing accomplishment. And here’s a trend that we’ve noticed at LCI. As the other larger mills, especially in the US, have cut back on colors, finishes, and entire lines of paper, Gmund seems to be expanding. Can you talk more about this?

Exactly. That’s an opportunity for Gmund. Gmund is a small company. We have small machines, and we are dedicated to quality and environment. So this is our focus, and it always has been. Now when it came to a trend that the big paper mills around the globe became bigger and bigger and they made mergers and acquisitions, we realized that whenever a acquisition has been completed, that they discontinued items because they invested into bigger machines, and they want to have a leaner portfolios. We don’t have this need because our machine is about 10 times slower than any other machine, so we are more flexible in terms of producing a pink color on the paper, if this is a trend or if we are able to create a trend, which is always our aim. So for any special color making, our minimum would be – it depends on the color – between 4 and 5 thousand pounds. So this brings us all the flexibility to offer custom made colors to the market to big customers and have a very, very wide and large portfolio. Thirdly, we do have 100,000 different papers what we offer to the market, and this is the largest portfolio in the world.

I had heard that Gmund has a huge sample library. You just mentioned 100,000. And I’ve heard about a secret sample area that only preferred customers might have the opportunity to see.

This is a rumor and it’s not true. The sample department we show certainly to customers so that they have an understanding of the opportunities Gmund can provide them. So we show it. But of course they have difficulties to see in a huge room all the samples, all the 100,000 different samples, at once. But we don’t hide them. They’re open to see. And we have only 1 or 2 secret areas. But those areas are secret to all customers. So no customer at all has seen, in our 180 years history, this place. So it’s not that we do select and we have a preferred customer. Every customer for us is a preferred customer.

Alright, that sounds like a good policy. Can you go into any more detail about those 1 or 2 secret areas? Or is that all we’re gonna to hear about them today?

Well, the secret areas… We are a very inventive mill, so we have the situation that our owner, Mr. Florian Kohler, at this time is the owner and the CEO of the company, that he’s doing product development. So this enables us to do different product development than in another company where it would have maybe a product manager. He would be a normal employee. He would have a certain budget where he can spend for product development. This brings you to limitations. This situation we don’t have. So the owner is the creative part of the company and if he wants to develop whatever paper which is unique and not available in the market here, he just can do it and we will do it. Now, with the technology, if you know our secrets, it’s easier and simpler to copy us and try to imitate a similar paper quality. And this is the reason why we don’t show our secrets, that we can keep our unique paper production and protect a little bit our innovative efforts in this sense.

Continue to Part 2 of the interview

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Joshua Birch