The Sanmerna Paper Products story

Robert and Mark White may not have been aware of the instrumental role they would play in building a strong paper industry in Jamaica when in 2003 they set out to create Sanmerna Paper Products Limited. The brothers, who hail from the tough Waterhouse neighbourhood in western St Andrew, got the idea to get into the paper business from a third partner, an engineer, who left five years after the business started. Robert and Mark have since taken the business through its struggles and are now on the cusp of pushing it for greater growth. Their story is this week's Corporate Profile.

Leaving school in the early 1980s Robert started his work life at Seaban/Testron Jamaica Limited, which was owned by Del Banbury, Neil Seaton and YP Seaton — a company which distributes chemicals for Testron International. He worked there from 1981 to 1989.

"I started sweeping the floor, filling bottles, operating forklifts and shipping orders," Robert White, the younger of the two brothers told the Jamaica Observer as he reflected on his journey over the last 40 years. Then, he was barely out of his teenage years and a far cry from being the managing director of Sanmerna Paper Products Limited.

His brother Mark did a similar job, menial tasks but at a different company — Jamaica Packaging — where he worked from 1978 to 1995. Mark White is now the technical director of Sanmerna Paper Products Limited.

To supplement his income Robert, bitten by the entrepreneurial bug, started a small business at his home.

"The entrepreneurial drive began in Waterhouse with me selling ice cream. I started off with one cart and I expanded until I had seven carts," Robert recounted. The ice cream carts he's referring to were made from milk crates which he outfitted with a wooden frame and wheels to make it easier to push along potholed-riddled roads to reach customers, chiefly on Sunday afternoons.

But seeking better opportunities, Robert said he decided to migrate with his mother to New Jersey in the United States where he was employed as a housekeeper in a hotel "making beds, cleaning the toilets and showers, and emptying the garbage" for three months at which point his former employer, Testron, reached out to him for a job at one of its plants in Atlanta, Georgia.

"There I returned to working from the bottom — sweeping floors again, filling bottles, and doing all sorts of jobs — but learning as I go along, enough to be promoted through the ranks until I was appointed assistant plant manager," Robert told the Business Observer.

His brother Mark was to join him in the United States 6 years later in 1995.

While they were away the brothers started planning for their return to Jamaica with one goal in mind, to go into business for themselves.

Robert returned first, and got into a business he knew best.

"In the past I was in chemical and Mark was in paper," Robert continued. "So I came back to Jamaica and started manufacturing household and industrial chemicals. The name of the company I started first was Sanmerna Sales Limited. That company produced soap, disinfectant, bleach, degreaser, drain opener, toilet bowl cleaner, and stuff like that. I would also import other chemicals and sell.

"But when we looked at the chemical business we realised it wasn't being profitable because a lot of people were in it. At that time, Mark was working at the paper company [Jamaica Packaging] and he suggested it would be best if we got out of chemicals and go into the manufacturing of paper."

The paper business would adopt the name of the chemical business, but why was it called Sanmerna? Robert outlined the details.

"When I started out the chemical business I said I want an unusual name. Then I said to myself, there are three women in my life that are not going anywhere. Those three women are my two sisters and my mother. One of my sisters is called Sandra. I took the first three letters from her name — the SAN. The other is Merva, I took the MER from her name and my mother's name is Norma, I took the first and last letters from her name, NA. I put those letters together to get SANMERNA. I grew with these three people so they are constantly around." Robert and Mark said they have other siblings but these were the one's they grew with.

Having chosen a name Mark said the business, Sanmerna Paper Products Limited, was registered in 2003.

"This year is our 20th anniversary; we were registered on the third of April 2003," Mark pointed out, noting that in a few weeks the company will be having the celebrations including awarding staff for long service.

Mark provided more details about switching from chemicals to paper products.

"Before I migrated, I worked at Jamaica Packaging for 12 years. I started on the floor, moving from sweeping to becoming a machine operator, to production and maintenance supervisor. My boss at the time, he came to me and said, 'Y'know, let us open our own paper factory.' " Mark said he made the suggestion to Robert to get out of chemicals and into paper which had less competition and was therefore more profitable than chemicals.

He had the experience in that business, having learnt from his former boss who was an engineer at Jamaica Packaging and who moved up to the post of general manager.

"I was his right-hand man and would operate the plant for him many times, and he would leave everything in my hand and I ensured everything was alright."

But five years into starting the business Mark said the relationship soured with his former boss, who migrated.

"That was January 2008 and Robert and I decided then to continue with the business."

"When we first started we bought a second-hand machine from Dominica and we leased space at the Sagicor complex on Marcus Garvey Drive to produce paper. It was all manual and a lot of work."

At the time the business started Mark said he was till overseas.

"When I returned to Jamaica and saw the space that they were operating in, I told them it couldn't work if they were serious about the plans they had for the paper market. So we started to look for a new space because the business had outgrown the space it was in, even before production started."

The first product to roll off the line was hand towels. "But people were coming to us wanting all sorts of paper products, so we got into tissues and napkins."

The line of products the company produces are marketed under the brand names Sophie, West Best, Classie, Ocean View, Springsoft and Finesse. The products include hand towels, napkins, tissue and medical bedrolls.

Mark said those early days were challenging, especially with the desired aim that Sanmerna would make a difference in the paper industry.

To make that difference, Sanmerna had to be different. The company decided to make softer tissue than the competition and to use only virgin paper in the process, not recycled material.

Then it was down to getting the product known in a market that was dominated by imports.

"Downtown Kingston gave us the biggest push for growth in the early years," Mark said. "We hired some good sales reps and they were selling like crazy to the wholesales in downtown Kingston."

Thereafter, Mark said he sat down with Robert and planned to push beyond Kingston. St Catherine was next, with the sales team targeting Spanish Town, Linstead and Old Harbour.

"From there we got into Mandeville and then the rest of the south coast and into western Jamaica," he added.

Robert chipped in: "After four years in business we were doing so well [that] we won the entrepreneur award from Jamaica Chamber of Commerce in 2007, and in 2011 we won the Manufacturer of the Year award from the Jamaica Manufacturers Association."

But being in wholesales and supermarkets would not satisfy the brothers who said they wanted to be the chief supplier of tissue and related paper products to the country.

"We had our eyes on being number one and we said that would not happen until we capture a lot of the hotels. So, we put in the work and we met with the purchasing managers to push our products. Now, Sanmerna supplies most of the major hotels in the island including Sandals, Grand Palladium, Iberostar, Bahia Principe, Ocean Coral, Jewels, Hedonism, Royalton and Negril Treehouse. Those are a few I can remember off the top of my head. We are on a trend of rising," Robert added.

He said at times, when they are on their sales drive, people would ask them for their boss or the owner to negotiate because they don't believe that two black men own a paper company in Jamaica.

"There is sometimes still a stereotype because they are looking to see some men in jackets and ties or someone that is brown or white, but we are in our polo shirts dress like normal workers."

But having seen the success they reflect on how difficult it was to start, especially getting financing to realise their vision.

"If it wasn't for America to really push us I don't know where we would have been now. We couldn't get loans to start. Robert had to mortgage his house and I did the same to get the money to build out this business," Mark recalled.

The company was eventually able to get bank loans locally but the interest rates would seriously impact cash flow. Rental charges and electricity costs were also cited as challenges. A family member even had to use their house as collateral for the company to acquire its first truck to deliver finished products.

But the brothers decided that, having mortgaged their houses to get the business up and running, they were not going to let it fail.

"When we moved here we had one shift, eight hours. The same machine did the hand towel and tissue, and we realised that if we were going to do both then we had to implement a double shift — one shift producing hand towels and the other producing tissue," Mark explained.

He said the company would eventually operate 24 hours some days, and sometimes everyday of the week, to meet demand.

"We need more space to grow. Right now we don't have the space for finished goods and have to store our raw materials miles away from the factory.

"For raw materials, the other day we had to rent two warehouses to assist us in storage when the global logistics was in disarray. Containers that should be delivered in May were not being delivered until August; it happened to every manufacturer. We had, at one point, 10 containers coming in at the same time and we had to take it off the wharf because of demurrage," Mark continued. Demurrage is the cost payable to the owner of a chartered ship on failure to load or discharge the ship within the time agreed.

"Before we came into the business Jamaica was importing almost 70 per cent of the tissue that we use locally, and we have helped to reduce that," Robert added.

The brothers say they are hoping they will be able to acquire some lands to build a new factory and warehouse.

"We want at least five acres. We don't want to move the business too far from Kingston."

They say they ventured into the export market but had to put that ambition on the backburner for now after facing several hurdles to get the goods into Trinidad and Tobago. Exports are still on the table. The company is looking at Dominica Republic and Antigua in the long term but for now, "we can't realise that dream because we have so much more to grow in the local market, plus we don't have the space to produce more than we are producing right now. We need more space to put in at least two more machines".

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