To Our Valued Customers:
Last year, Coater Services Inc., acquired the name, intellectual property, trademarks, work in progress and spare parts related to the paper industry business of The Kohler Coating Machinery Corporation (KCMC).
Effective January 2, 2002, Coater Services began doing business under the trade name CSI KOHLER COATING, using the web address www.kohlercoating.com.
I was a principal in KCMC. Coater Services is composed entirely of former KCMC employees. To avoid some understandable confusion, an explanation is in order.
The Past
Historically, KCMC was a 42-year-old company specializing in innovative custom designed machinery for the paper and steel industries. Sales were split roughly fifty/fifty in each industry. As you are aware the paper and converting industries have been in a recession for some time. You may have read something of the deep depression in the American steel industry. In the two years prior to it's closing, 26 of KCMC's domestic steel customers went into bankruptcy. Not only did KCMC take some significant cash losses, but also those same customers were not in a position to buy any new equipment. By June of 2001, sales had dropped from the range of $20-24M to an annual rate of $8M with about $7.5M coming from the paper side. The combination of these factors, with the construction of a new, much larger manufacturing facility in 1999, resulted in a debt load that was not survivable. The company was put into receivership and closed, with the assets of the paper and steel sides sold separately.
In July, after KCMC closed, a new company called Coater Services was incorporated. Coater Services began to sell machinery, service, and spare parts to the paper, corrugating and converting industries.
After months of negotiation, an agreement was reached for Coater Services to acquire the name, intellectual property, trademarks and physical inventory of the Paper side of KCMC. Aside from a considerable amount of information and equipment, we also got the KOHLER COATING name back.
The Future
As stated above, in January 2002 Coater Services will begin doing business under the trade name CSI KOHLER COATING.
The year 2001 went down as a year that none of us will ever forget, but the future looks very bright to us. As CSI KOHLER COATING, we're smaller and leaner than KCMC was.
We are now free from the burden of maintaining a presence in the steel industry. We are focused on the core needs of our customers, offering a specific line of products which are in demand in the industries we serve and that have a reasonable expectation of being profitable for us to produce. Our overhead is a tiny fraction of what KCMC's was, and we expect to compete globally for your business.
As we ramp the company up, we can rely on a trained and loyal workforce, many of whom had ten to fifteen years with KCMC.
A number of our competitors have gone out of business, been merged or sold. We have been through the fire and have come out on the other side poised to take up the slack created when the economy turns around. We have several new breakout products that reduce waste, increase quality, and have quick paybacks even in poor economic times.
We are a young company in experienced hands, run by people that you know and can have confidence in. We are eager to introduce you to the new CSI KOHLER COATING.
Please let me know if you have any questions.
Best regards,
Herbert B. Kohler
Director of Operations
CSI KOHLER COATING
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