Sunday, May 30, 1999
Ris looks good on paper
Company hopes acquisitions, attention to customers will create billion-dollar baby
BY MIKE BOYER
The Cincinnati Enquirer
What does a smelt fry have to do with selling printing paper?
Everything, says Mark Griffin, chairman and chief executive of Ris Paper Co., the paper and packaging distributor based in Florence.
Privately held Ris inherited the fish fry, an annual event staged in the fall, from Johnston Paper Co. Ris, among the nation's largest paper distributors, acquired Johnston, one of Cincinnati's largest fine-paper distributors, earlier this year.
Rather than discard the event, a kind of mini-trade show at the Cincinnati Regal Hotel, Ris embraced it.
RIS FILE
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• Business: Distributor of printing paper and packaging products in the Northeast, Midwest and Texas through warehouses in more than 20 cities.
• Sales: $530 million.
• CEO: Mark Griffin.
• Employees: 650.
• Headquarters: Florence.
• Latest move: Acquired Johnston Paper Co. in Queensgate, one of the area's largest fine-paper distributors. The acquisition, Ris' first in almost a decade, doubled its Cincinnati operations and added $50 million in revenue.
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“It's a pretty big deal, drawing about 1,000 customers and vendors,” Mr. Griffin said. “It's a chance to thank customers for their business, something we don't do often enough.”
In the face of consolidation sweeping through the paper industry, Mr. Griffin thinks that kind of personal attention to customers helps set Ris apart.
“Paper is paper. It's how you differentiate yourself,” Mr. Griffin said. “To me, service is the biggest way.”
Although not well-known in Cincinnati, Ris is one of the area's largest private companies. Originally based in New York, Ris moved its corporate offices to Northern Kentucky five years ago after Mr. Griffin became CEO.
The company had revenues last year of $530 million, employs 650 and has distribution warehouses in more than 20 cities in the Northeast, Midwest and Texas. Ris, which grew from a single paper company owned by Howard Ris starting in 1938, moved into the Cincinnati area in 1984 when it acquired the Diem and Wing paper distribution company, which had operations in Cincinnati, Dayton, Columbus and Indiana.
With the addition of Johnston, which operates from a 100,000-square-foot warehouse and office in Queensgate, Ris more than doubled its local delivery fleet and added about $50 million in sales.
Ris also doubled its Cincinnati-area employment to about 100 with the acquisition.
Johnston, owned by Bill Colgan since the late 1970s, is the first acquisition by Ris since 1989, but probably won't be its last.
Mr. Griffin said he's talking with two other paper distributors about possible acquisitions and says Ris would like to expand into other major printing markets, such as Atlanta and Chicago. “If there was an independent we felt could be acquired or (an owner) looking for an exit strategy, it might give us the opportunity to enter a geography we hadn't even thought about.
“We think we have a shot at being a $1 billion company in three years,” he said. “We've really got to get bigger to have the critical mass” to stay competitive.
Last week, for example, Georgia-Pacific Corp., the nation's second-largest paper maker, re-entered the paper distribution business by agreeing to buy Unisource Worldwide Inc., the nation's largest paper distributor with about $7 billion in sales.
Last year, Covington-based Xpedx, International Paper's distribution business, acquired Zellerbach, the $1.2 billion distribution business of Mead Corp., as part of its bid to overtake Unisource, as the largest paper distributor.
Ris employs just a handful of people at its headquarters. Most of the decision-making is done by the local branch managers.
“We're like a conglomeration of small businesses,” Mr. Griffin said. “I try to set strategy and a tone for the business, but our individual branch managers are empowered to make decisions.
“I'm like everybody else. I don't like overtime. But if a manager decides to have overtime to service a customer — he makes that decision. He doesn't check with corporate. Our managers have the authority to go along with the responsibility.”
That extends to things such as retaining the Johnston name, distinguished by the single “T” and Cincinnati scenes on its delivery trucks.
“There's really no need to change the name,” Mr. Griffin said. “We won't do anything that affects the customer.”
Jim Lenhoff, formerly vice president and general sales manager for Johnston and now vice president and general manager of the combined Cincinnati distribution center, said he's been impressed with the local control under Ris. “We're allowed to run this as we have always run it,” he said.
John Buckley, president of the New York-based National Paper Trade Association, a trade group, said that under Mr. Griffin, Ris has been transformed.
“There is no Bill Gates in this business,” Mr. Buckley said. “But Mark has turned that company around. Ris is a different company than it was five or six years ago.”
In the past, the view of many privately held paper distributors was “the way to make money was not to spend money,” he said. But under Mr. Griffin, he said, Ris has cut costs, invested in new technology and expanded into the faster-growing packaging distribution business.
“I'm a great believer in what's going on technologically,” Mr. Griffin said. “I don't know if we'll be smart enough to be the one to change our business over time, but I do think our business will change like every other business.
“We renegotiated our data and voice communications plans, and got unbelievable amounts of savings. Every salesperson has an office e-mail address for customers.”
This summer, Ris will open a new central computer center in leased space on Seventh Street in Queensgate. The new system “is 10 times more powerful than our current system and gives us the ability to add future acquisitions without additional computer changes,” Mr. Griffin said. The system, which links all of Ris' warehouses, also will give it the capability to expand its Web site and allow customers to place orders via the Internet.
At the same time, technology is changing Ris' customer base.
Commercial printers, publishers and advertising agencies remain the core of Ris' more than 7,000 clients. But the increasing availability of digital printing technology — which gives simple office copiers the capability to print increasingly sophisticated documents — is broadening the market.
Companies such as banks and investment firms are doing increasingly more of their printing in-house, Mr. Griffin said.
Further, he says the paper industry consolidation is helping, not hurting, Ris.
As distributors are acquired, it has created opportunities for Ris to market its capabilities.
“People are creatures of habit,” Mr. Griffin said. “They have two or three favorite suppliers they continue to buy from. Well, in some cases, their favorite suppliers are gone, and that's given people like ourselves a chance.”
Consolidation is also giving distributors more leverage with the paper mills, said Steven Barker, Ris' senior vice president. “More mills are looking for distributors,” he said, and they're more willing to work with distributors to tailor programs for specific customers.
Although the Ris family owns most of the company, with management and employees holding a smaller share, Mr. Griffin said the company has talked with investment bankers from time to time about some type of public equity offering. “I think that's an opportunity we can always seize, if we needed some help in making a large acquisition,” he said.
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