Fibro Corp.: The Holding Company
Wenatchee business brings its egg-carton expertise to Tacoma.
| FROM THE PRINT EDITION |
At a large factory in Wenatchee, far from its founder’s roots in China, Fibro Corp. is building a better egg carton.
It starts with a simple slurry of recycled newspaper and water inside a big vat. The slurry flows into large presses where 10 high-tech machines stamp the containers into shape while simultaneously drawing out the moisture. The process yields some 200,000 cartons per day across three shifts.
After production, the high-strength cartons travel to an adjacent room to receive logos, nutritional information and bar codes linking them to clients such as QFC, Fred Meyer, Wilcox Farms, Trader Joe’s and Oakdell Egg Farms.
Look a little closer and you’ll notice these aren’t your grandmother’s egg cartons. Although made from the same recycled material, the cartons have a smooth, paper-like finish that allows even the tiniest lettering or decoration to be printed directly onto the carton and remain legible. Fibro Corp. achieves this level of quality through innovations built into the next-generation machines it designs and manufactures for its own factory.
Since establishing the Wenatchee plant in 2012, the company has seen such explosive demand for its products — it also makes those molded cup carriers and carrier/tray combinations common at fast-food places — that it is now expanding into the former Parker Paint factory in Tacoma. It will move its headquarters there and hire 200 employees to handle production of egg cartons and other containers, and eventually assemble the carton-making machines themselves for export. It’s also where the company will add a research division to do ongoing improvements to the production machines and diversify the types of molded-pulp products.
Fibro Corp. will continue employing about 50 workers in Wenatchee to make egg cartons at high volume. Demand from one large customer such as Fred Meyer can by itself consume all of the Wenatchee facility’s production capacity, says Fibro VP Sharon Zhang, who oversees factory operations.
The smooth, sturdy cartons are the brainchild of Sharon Zhang’s father, Paul Zhang, an electrical engineer who is president of Fibro Corp. Around 1992, Paul and his wife moved from Shenyang in northeastern China to live in Los Angeles and start Kaite Group North America, part of the family’s Hong Kong-based conglomerate Kaite Group Ltd. with business lines in pulp, paper and machinery in Asia. Started by Paul’s parents, Kaite Group also owned a paper mill and power plants in China. About a year after her parents came to the United States, Sharon joined them in California, where she studied interior design and international business. After college at Cal State Fullerton, she started helping in the family business in America and China.
Roughly 10 years ago, Paul was in an American grocery store when he noticed an egg carton with a wrinkled surface. An inveterate tinkerer, he started thinking about how to improve it. The family purchased for production in China a traditional carton-manufacturing machine that was two stories high and more than 600 feet long. The company used it to make egg cartons from recycled paper.
The older machine formed cartons that remained wet before they entered a giant oven for drying. Looking for ways to improve the process, Paul asked, “What could be done to make the fiber product more like paper — smoother, better for print?” Sharon recalls. He sent queries to his Chinese engineers to develop a better integrated, automatic control system, which ultimately led to development about six years ago of a more compact machine now used in Wenatchee.
Paul zhang’s principal innovation incorporates steam for a heat press system while also removing excess water to compress and dry cartons at the same time. Sharon says her father compares the new process to laundering and drying clothes to make them wrinkle free. If shirts from a washing machine are dried completely in a dryer and left in the machine, most will come out wrinkled. And ironing doesn’t render a crisp surface without steam. But if the clothes retain some moisture when removed from the dryer, they can be dried at the same time they’re being pressed and achieve an ideal finish.
For a few years prior to launching the Wenatchee factory, Kaite Group imported waste paper from the United States, turned it into egg cartons in Asia and then shipped the cartons back for sale in America. In the past two years, the family has sold some major operations in China, including the paper mill and two power plants, seeing more opportunity by supplying cartons to the entire U.S. market. The company still makes egg cartons in China but sells them in China, other Asian markets and Australia. The Fibro plant focuses solely on North America.
“We still will have some business in China, just less,” Sharon Zhang notes. “We’re undecided what will stay.”
Meanwhile, Paul Zhang spends more time in Washington state these days, setting up the Tacoma site and remotely running the remaining China businesses. And he remains the driving force behind machine-technology upgrades. Among the new functions to be added at the Tacoma plant are research and development, with a focus on continuous improvement in the quality of the carton-making machinery. On the Wenatchee factory floor, Sharon says, Fibro already operates a fourth-generation machine.
“The main purpose for bringing R&D to Tacoma is my dad believes in new technology,” Sharon says. “Where there is new technology, it will be a good product, and a good product will sell itself. We don’t have a sales department. When our product goes out, it pretty much sells itself.”
At a conference table in Wenatchee, Sharon runs a finger across the strong edges of a Fibro egg carton and compares it to a competitor’s container, which sags a bit when picked up off the table. She says the Fibro product possesses a higher density, so it’s stronger, “but, on average, it’s 10 grams less weight than the competitors’ [cartons] because we use less material.” The side tabs are stronger, she adds, which provides for more secure latching.
The company uses recycled paper, nonchemical sizing (to resist moisture) and water to make its cartons. It sells them throughout most of Washington as well as in California and the Portland area. Shipments have gone to customers as far away as Iowa and Hawaii.
Traditional, rougher-surfaced cartons usually require the application of stickers with printed labels and bar codes for reliable electronic scanning. Fibro cartons accept paper labels, too, but Fibro guarantees that 99 percent of the bar codes it prints directly onto cartons will be read accurately. Sharon says the cartons stack more easily and don’t stick together when plucked by machines clients use to fill them with eggs.
The zhangs started Fibro Corp. in a leased 38,000-square-foot industrial building in Wenatchee because of the area’s low-cost electricity from hydro power. From the time it shipped its first product in 2013, the factory has been a great success and the company acquired acreage nearby to expand. But the Wenatchee operation faced several challenges, including its distance from customers, a shortage of workers and the high cost of running power to the new property.
The family decided to expand production to Tacoma because of logistical shipping advantages and easy access to labor. Fibro plans to produce a variety of molded-fiber products, such as cup holder trays, school lunch trays, premium apple containers, retail packaging and even medical instrument trays, Sharon Zhang says. Other products could include pulp-based hospital bedpans with water-resistant coating, fresh mushroom packaging and plant pots that can go directly into the ground to degrade naturally.
By year’s end, Fibro will move assembly of its fiber-molding machines from China to Tacoma, Sharon says. Assembly of the machines in Tacoma will require mechanic-level workers and allow the company to stamp these products “Made in U.S.A.,” which, she says, will be a major advantage when it starts exporting.
“That will be easier to sell,” she says. “Right now, a lot of customers demand U.S.-made products.”
Another obstacle to operating in China is the rising cost of operating there. “Producing in China is not as cheap as it used to be,” she explains. “We wanted to exit the China market. The problem right now is China is changing a lot, facing a lot of economic and labor problems. They’re losing the low-cost labor advantage.”
As egg consumption, no longer considered a dietary no-no, continues to grow in the United States, egg-carton orders should rise commensurately. So Fibro plans to expand aggressively in North America and across the globe. In the next five years, it expects to set up at least five new plants across the country. With few competitors, Sharon reports heavy demand for Fibro’s product. And with customers becoming more environmentally conscientious, she says they tend to choose cartons made of recycled materials over plastic foam.