Narrow Web Profile: ROI Technologies Inc.

By Leah Genuario | July 20, 2005

With a new acquisition, this Baltimore converter enters new specialty markets.

The management at ROI Technologies Inc. has never shied away from new opportunities. So when a letter arrived in the mail notifying the company of a 13-station press for sale, they were listening. It turns out they liked what they heard.

The 13-station press, manufactured by Allied Gear in 1999, includes seven UV flexo/hot air stations and six rotary screen printing units, as well as two stations for hot foil stamping. The press was acquired from the now-defunct American Label Company, of East Hanover, NJ. It has been living in tractor trailers, pending the completion of renovations to ROI Technologies' 42,000 square foot facility in Baltimore, MD.

The company anticipates using the press for high end pressure sensitive film products and cosmetic samples. With more than 50 percent of business currently devoted to the bottle wrap label market, however, the investment toward two completely different products seems unexpected. But looks can be deceiving.

"We recognize that we've got to have a more complete package to deliver to our perceived customer base out there. And by [purchasing the press], it adds a whole new dimension to our product line, but it's a dimension that can be used to augment the sales that we already have.

"In other words, many of our customers are buying products from somebody else that could be produced on this press. It's not like we're going out and finding a whole new market. We have already established ourselves in that market by providing those customers with different products. This just opens up the door to an expansion and a dilution of our sales from any one large market segment," says J. Timothy Roberts, president of the company.

A bird's eye view of the ROI Technologies plant.

Achieving success in a new niche is something the company has always done well. The purchase of this press does not mark the first time ROI Technologies has made a decision to move ahead and tackle other products lines.

A history of niche markets

The company was formed in 1987 when Roberts and former partner Dan O'Connor acquired the label division of Dulany-Vernay, an offset printer, out of bankruptcy. The struggling division posted approximately $750,000 in sales, had 15 employees and possessed three presses (only one — a 40" Wolverine press — is in use today).

Before going into bankruptcy, the division printed a variety of simple labels. According to Roberts, these included thermal weigh scale labels, Perdue chicken and POP labels, and racetrack tickets.

It wasn't long before newly formed ROI Technologies began focusing its energy on obtaining large accounts. One of its first was UPS, in which the company was one of the vendors participating in the production of the tracking labels, says Roberts. The company portfolio moved on to include products for other large clients, including labels for DuPont's blood analyzing group, which has since been sold, and DuPont's photographic films division. ROI Technologies also did some work with spiral/k-wrap labels and PS oil labels, but nothing related to the food industry.

That all changed when the company landed an account with Quaker Oats, printing its lidding on 16 mil SBS board. "Our presses weren't supposed to be able to do 16 mil substrates, but we found a way to print those," says Roberts.

The 40" Wolverine press
The Quaker Oats account dried up two and a half years later when their customer brought presses in-house. It was time for ROI Technologies to seek out new niche markets.

The year was 1993, and the roll shrink film market was just developing. BOPP hadn't been around long, and neither had PET bottles. Paper labels, which were a staple for glass bottled beverages, were not working on plastic bottles because they did not expand and contract with the bottles.

It became apparent that bottle wrap labels — film labels that shrink 5 or 10 percent around the container and are glued on — was the niche ROI Technologies had been searching for. The company focused on regional beverage markets, and at its high point, bottle wrap clients accounted for 75 percent of the
company's business.

ROI Technologies had carved a niche, reaching into a market typically dominated by wide web. While their runs were not particularly short for narrow web converters (typical runs average from 100,000 through four million, says Roberts), they were very short for wide web. This proved to be a good market until the beverage industry leaders, "established market pricing of what they are going to pay, regardless of quantity," says Roberts.

Pricing pressures had become too much. "We let the bottle wrap business get too big," says Roberts. "[The industry leaders] started mandating it. That's when we started looking to other markets."

The bottle wrap business still accounts for approximately 50 percent of sales, but ROI Technologies has made a point to find other niche markets, even before the acquisition of the 13-station Allied Gear press. And sometimes, other niches have found them.

Currently, the second-largest market is direct mail. The company mainly works with non-profit organizations employing direct mail as part of their fundraising strategies. The company's entry into this field came rather accidentally.

"We went to a trade show and we had a fellow come by and say, 'Can you do this?'" says George W. Towle, senior vice president and CFO. He became a partner in 1998. "Next thing we knew we were in the direct mail business."

Company stats
The 22" Comco press
The company has come a long way since its beginning. Today, it posts sales of approximately $15 million and possesses seven presses. The collection includes three 20" Arsomas, one 22" Comco, one 40" Wolverine, one 16" Allied Gear and one 6" Webtron.

The payroll has grown to approximately 60 employees. Among the staff is Henry Shuffler, the VP of manufacturing. Tim Roberts also works with two of his sons. Timothy D. Roberts works as business manager and Matthew Roberts is print production engineer.

New prepress department

There are a lot of changes afoot at the company. Besides acquiring a new press, the company is also ramping up its prepress capabilities.

Previously, all prepress work was done off-site at Fine Line Graphics in Smithfield, RI. Early this year, however, Fine Line Graphics is expected to create an "in-plant" operation at ROI Technologies.

The prepress operation at ROI Technologies will include Macintosh front end platforms, digital proofing and digital laser platemaking. With the exception of data manipulation (such as color corrections or applying dot gain curves and traps), all prepress work will now be done on-site. Fine Line Graphics will also provide a prepress technician who will work in ROI Technologies' facility.

This proves to be an unusual arrangement, but it should work out well for both parties involved. "Our volume became significant and we decided that we were either going to put in our own prep operation or talk to them and see what could be done with possibly them putting in a prep operation. Well, they already had a blueprint of something that had been successful for them, so that's how we came up with this," says Roberts.

A big advantage of this new partnership is the ability to handle an overflow of prepress work. "They will have one person in our plant committed to us and that one person can be more than kept busy all the time. But when we need two and three people in different parts of it, then we have Fine Line Graphics to rely upon," says Roberts.

The future

With a glimpse into ROI Technologies' past and present, it is only fair to also explore the future. This company has championed its ability to adapt with the changing times. The investments it is currently making will continue to propel the company in that direction. And the future looks bright.

"I see us diversifying our existing product line and creating a company where no single product line has more than one third of our sales. Second, I see us growing to maybe a $20 million company. And then future growth would probably be accompanied by plant expansion into other geographic areas," says Roberts.

ROI Technologies, Inc.
175 W. Ostend Street
Baltimore, MD 21230
Phone: 410-576-1111
email: info@roitechnologies.com
Web: www.roitechnologies.com