“We’re not a new company, but we’ve basically made a transition from being a label printer to a flexible packager and we’ve managed to do it without going out of business,” he says.
But Love also admits that Palmas was “a hair away” from closing shop. And to truly understand how Palmas got to where it is at now, you’d need to know the company’s backstory. George Schmidt & Co. is a printing, converting and finishing firm that has been in business since 1874. One of the markets the company has excelled in is tobacco packaging and printing. When many of its large cigar clients began opening shop in Puerto Rico in the 1970s, George Schmidt & Co. opened Palmas Printing as a subsidiary in Juncos, Puerto Rico to better serve these clients. Palmas Printing originally consisted of a single gravure press focused on printing rolled cigar bands. As the business grew, Palmas added capacity and eventually expanded into pressure-sensitive labels.
“When flavors came out for cigars, the traditional brands went into line extensions and became different flavored versions of well-known cigars,” Love says. “That kind of killed gravure because the cylinder changes and the setup times and the runs all went another direction and we needed a more cost-effective way to do shorter runs. We got into flexo at that point.”
Things were going good for Palmas Printing. Love says the company owned about 95 percent of the mass market in the cigar industry. And then things changed in the late 2000s following the company’s move from Puerto Rico to its current location in Melbourne, Fla. With the proliferation of flavors in the cigar industry, metalized wrappers soon started to displace bands. Palmas didn’t have the right equipment to print on the unsupported film material.
“We very quickly decided that we had to spend a whole lot of money to re-tool and take advantage of the relationships that we’ve had for so many years with these tobacco companies,” Love says. “If we didn’t get into flexible packaging, we weren’t going to have a business.
“We started spending all of our money on new equipment. Right after that happened, in 2010, pouches began to cannibalize wrappers. That continues today – now wrappers are a much smaller part of our business and pouches are our primary business – and it’s growing. That’s required more equipment. Now, instead of just printing a cigar band and a film wrapper, we’re doing the film printing and the laminating and the forming of the pouch, including a zipper closure.”
Today, Palmas Printing only does flexographic printing. It operates five flexo presses and is capable of printing in up to 10 colors and up to 17 inches in web widths (31 inches with partners). While Love admits that he loved the high-quality and repeatability of gravure printing, it became non-competitive from a cost standpoint when Palmas was forced to transition into printing shorter runs. Flexo’s fast set up time and inexpensive operating costs – especially when it comes to short print runs – were the basis behind Palmas’ decision to adopt the technology.
This story originally appeared in Flexible Packaging. Here’s the link.