Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, November 20, 1994 TAG: 9411180073
SECTION: BUSINESS PAGE: G-1 EDITION: METRO
SOURCE: JOHN LEVIN
DATELINE: LENGTH: Medium
International Paper, the Purchase, N.Y., maker of a variety of paper and paperboard items, has been divesting itself of envelope plants since 1991.
"This decision was driven by market factors beyond the control of employees at the plant," said Robert M. Turnbull, Union Envelope's general manager.
"With the growth of communication by fax and e-mail, there's less demand for envelopes. There are simply more envelopes out there than the available market can use." Postal increases reduce the volume of business mail, he said.
The industry is not coming unglued by Turnbull's outlook, however.
``The information superhighway is like a fast-moving train with a lot of stops along the way,'' said Maynard Benjamin, president of the Envelope Manufacturers Association of America, an Alexandria trade association.
Slow acceptance of technology for services such as in-home banking and concerns about privacy will support a need for paper correspondence for a long time, he argued.
International Paper simply is exiting the $2.9 billion (1993 sales) envelope business as others have before. There are 36 fewer plants making envelopes than in the 1980s, yet their combined capacities are three times greater, thanks to better equipment, Benjamin said. They made 176 billion paper envelopes last year; sales and production both up by 1.7 percent over 1992.
There are likely to be more consolidations and mergers among envelope manufacturers, with the survivors being the most innovative at creating new products for new needs.
Roanoke-based Double Envelope Corp. is counted among the survivors, having merged two years ago into National Fiberstok Corp. of Atlanta and having tapped the growing direct-mail and catalog retail business for new customers.
Besides conventional envelopes made for direct-mail merchants, banks and utilities, Double Envelope also manufactures combination envelope and order forms found in the middle of many catalogs and magazines, including National Geographic.
The 300 people who work at Double Envelope's plant on Plantation Road also produce bags used by photofinishers when they deliver snapshots, return-payment envelopes and pressure-sensitive labels.
"Certainly there is some erosion by fax and e-mail" for traditional business envelopes, said Bill Britts, senior vice president for marketing at Double Envelope.
But "there's a widening of the marketplace" for manufacturers in terms of what they make and to whom they sell it, he said.
Governments will be the first to go envelope-less, Benjamin predicted. Because public agencies are more cost-sensitive, they will be among the first to do business electronically rather than on paper, he said.
Government accounts for about 26 percent of U.S. envelope sales. Of the remainder, about 61 percent goes directly from manufacturers to banks, insurance companies, credit-card issuers and others that have large mailings.
While many promote electronic banking services that replace some paper transactions, it is in evolution, Benjamin said.
Appalachian Power Co., for example, no longer sends return payment envelopes to its customers who allow the utility to debit their bank accounts electronically. Yet between November and March, it encloses envelopes in their bills, hoping they'll be returned with donations to the utility's Neighbor-to-Neighbor program, which pays electricity bills for indigents.
The remaining envelopes go to retailers, such as office-supply stores, for sale to companies and individuals who will be among the last to give up paper correspondence.
"The quantity of mail is an indicator of a healthy economy," Benjamin said. "And the envelope industry is doing very well.''
by CNB