Manufacturing CEO On Thinking Globally: “The World Is Quite Small”

Mark Gardner, CEO of Sappi North America, has learned a number of valuable lessons in his career—but one in particular sticks out. And it wasn’t a pleasant one.

He went to one of Sappi’s paper mills in Michigan in the early 2000s. When he got there, the mill was on top of the world and one of the company’s most profitable mills. By the time he left, more than 70% of the mill’s profit had left the site. Gardner says imported products from Europe and Asia saturated the market and undercut the company’s prices up to 30%.

“It left a very clear impression in my mind of what it’s like to be sitting on top and then all of a sudden, you get global competitors, not domestic competitors, who have good products, but other advantages that you have to compete against,” says Gardner.  “You always have to be looking at who your competition is and really understand that you’re not competing with maybe more traditional competitors, you got to look at who’s coming down the road.”

Throughout his career at Sappi, Gardner has worked in various parts of the global manufacturing company’s businesses, allowing him to learn various lessons—both easy and hard to swallow. This helped prepare Gardner for his role as CEO of Sappi North America in Boston, a position he has held for 11 years.

Gardner spoke to Chief Executive about an array of topics from the challenges in manufacturing, sustainability and more. Below are excerpts from this conversation.

What are some of the big challenges, Mark, that you’re facing in the manufacturing sector?

First and foremost, and I think it’s true for any manufacturer in the United States or anywhere in the world, they’ve got to think globally as much as you [think about] your local markets. Because today, the world is quite small. And innovation and technology are fleeting, you really have to stay active and focus on that. It’s changing dynamically, and it might change as we go forward with these different things going on the tariff side of the world at the moment.

I would still say that a challenge in manufacturing here in North America as a pulp and paper company is making sure that you’re offering the highest value product you can at the lowest cost. Because there’s always going to be somebody coming on to you, on to the scene and into your market with a product that will be equally as good, unless you’ve got innovation that you can separate yourself from the pack, and will find ways to do it at costs that will be very competitive.

So you have to be constantly looking down the road as to what is it your customers need and what they want. What are their unexpected or unanticipated needs coming at them? How you can meet their needs and better service their needs? How to do it before your competitors do, and figure out ways to do it with a distinct advantage that you can hang on to? For North America, that’s one of the things that we’ve very much focused on.

Every piece of our business that we’re in, we focus on making sure that we are offering high-quality distinct products that are difficult to be replicated by anybody, which offer the customer some advantages for doing business with us versus somebody else. And we do that with a very extensive R&D effort, and also by maintaining and investing in our assets, our manufacturing assets, so that they can stay globally competitive and globally run very well.

But around that, I’d say the next big challenge that we face is one of making sure that you have a workforce that is highly educated and has opportunities to grow and change, but also one that you can attract new employees into. And manufacturing, I think it’s going to have a renaissance, and I think people are starting to come back around and realize there are great jobs in manufacturing. But for some of the newer, later generations…we have to go out and actually make sure that they understand what goes on in pulp and paper mills. And the sciences and the technologies that are involved, and the abilities for people to have exciting careers and jobs in mills. That’s a real challenge. Our industry is constantly reinventing itself, and we need to find more workers for that, for particularly supply.

What are some of the initiatives you guys got going on with sustainability and green and really ensuring that you’re being environmentally sound?

We’re in an industry that is actually very much based on renewables and recycling of the products that we make. So our goals and our objective is to make sure that we get the maximum value out of every piece of material that we buy or bring in or consume, and that we get the maximum yield from it. We don’t waste any more product than we need. And whatever we do waste, we make sure that we can recycle it or reuse it or get more value out of it and put the least amount of product that we can into any waste or landfill. And so we’ve had goals over the years to continuously reduce that. And the cornerstone to that whole line of thinking is not only is it environmentally the right thing to do, it’s also the most efficient and cost-effective thing to do. The best-running operations that use the least amount of product are also the most cost-effective, along with probably being the most sustainable.

And we focus on three major categories: the people in our business, the planet and prosperity, you need all three. And a lot of people, when they talk sustainability, they get focus on just the planet. But we are a little broader than that. We have to look at not only the environmental side, but the sustainability of the business, which means you have to have a sustainable prosperity, it has to be a business that can renew itself. And you mentioned [old] mill towns [in New England]…so it’s devastating when you’re not in a sustainable business model.

Some of those towns are still feeling the ill-effects of the mills shutting down in the ’80s.

It’s critically important that we operate safely. And there’s one thing that is always on the top of my mind and I constantly think about, is the safety and well-being of our people. And we have a very rigorous, and very well-engrained safety culture. We operate with one of the lowest incidences of injury in the whole industry, and we continuously train. We have a goal of, minimum of 60 hours per person, every person, 60 hours of training per year, but we usually exceed that considerably. And we continuously work to make sure our folks are knowledgeable and capable of moving on in their jobs and continuing to build in their capabilities.

And on the prosperity side, you know, that’s why we made the investments in people, and why we make the investments in our businesses. I’m the only CEO still going here in the coated paper business after 11 years. And Sappi North America is the only coated paper business that hasn’t gone through bankruptcy or changed hands or closed. Every one of our competitors has gone through bankruptcy, shut-downs, closures…. every one of them.

I give a lot of that credit to us having that kind of view and understanding to being part of a global company, and Sappi’s culture. Because we’re looking at global trends all the time versus domestic trends. Even though 90% of what we manufacture here is sold and bought and used in North America, a lot of times there’s early signals that I see and pick up from Europe or from Asia or even from South Africa that we think about here, how it’s going to impact our customers, our business, and vice versa. That’s such a strength.

What’s your advice for your fellow CEOs?

I’m not the first one to say this, for sure, but one of the things I guess you don’t want to do, and I’ll start with one of those don’ts is you don’t want to try to be successful by trying to save yourself to prosperity. Obviously, you’ve got to manage your costs, but this is very much a long-term business model because it’s so capital intensive, the pulp and paper industry.

Don’t fall into the trap of cutting costs for a year or two so you can post really good numbers, which you could and then the whole bottom falls out from your business. Because you either cut way back on marketing and sales, or you didn’t maintain the assets. [This] is very much a heavy asset business, so you have to take care of your people, take care of your assets, take care of your customers.

You need to have a rolling five-year view on where your business is going and what you’re doing. And make sure that you’re constantly updating that every year.

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