Opinion on  Orchids Paper Products Company (TIS)     Sector: Basic Materials  >  Industry: Paper & Paper Products
Orchids Paper Products Company

Orchids Paper Products Company (Orchids), manufactures bulk tissue paper, known as parent rolls, and converts parent rolls into a full line of tissue products, including paper towels, bathroom tissue and paper napkins, for the consumer, or at-home market. Orchids markets its products to private label segment of the consumer tissue market and focuses on serving the discount retail market. The Company’s primary market is the value retailers or dollar stores. While Orchids Paper has locations throughout the United States, it distributes products within an approximate 900-mile radius of its Oklahoma facility. Orchard Paper products are sold under customers private labels, and to a lesser extent, under the Company’s brand names, such as Colortex and Velvet.

The Company offers a range of private label products, including bathroom tissue, paper towels and paper napkins. During the year ended December 31, 2008, approximately 54% of the Company’s converted product case shipments were paper towels, 38% were bathroom tissue and 8% were paper napkins. Of the products sold in 2008, 78% were packaged as private label products in accordance with Orchids customers’ specifications. The remaining 22% were packaged under the Company’s brands Velvet, Colortex, Ultra Valu, Dri-Mop, Big Mopper, Soft & Fluffy, Tackle, My-Size, Orchids and Care.

The Company manufactures parent rolls in the Company’s paper mill located in Pryor, Oklahoma. Orchids Paper facility manufactures parent rolls from recycled waste paper using four paper machines. Parent rolls are converted into finished tissue products at the Company’s converting facility, which contains 10 lines of converting equipment and is located adjacent to the Company’s paper mill. During 2008, 64% of the Company’s revenue came from three value retailers: Dollar General, Family Dollar and Wal-Mart. The balance of 2008 revenue came from other discount retailers, grocery stores, grocery wholesalers and cooperatives, and convenience stores. During 2008, the Company sold 14,685 tons of parent rolls on the open market.

Dollar General accounted for approximately 26% of the Company’s sales in 2008. With more than 8,000 stores, Dollar General is the Company’s key value retailer. The Company supplies all of the value private label tissue products for three of Dollar General’s nine distribution centers. Family Dollar accounted for approximately 21% of the Company’s sales in 2008. Family Dollar is another key value retailer with more than 6,400 stores in 44 states. Family Dollar has nine distribution centers, and it supplies all of the value private label tissue products to three of the distribution centers and supplies approximately half of the value private label tissue products to two other distribution centers. Wal-Mart accounted for approximately 17% of the Company’s sales in 2008. The Company have 19 distribution centers with bath tissue and, to a lesser extent, paper towels.

The Company Competes with Georgia-Pacific ,Cascades and Royal Paper.