It's a Merry Christmas When The Output Is Torn to Shreds

At Pittsburgh's Papercraft Corp., it is Christmas in August. Last week, at the firm's modern one-story plant, some 1,000 employees worked round the clock in three shifts to produce gift-wrapping paper for the 1967 holiday season. Traveling around the premises in an electric golf cart was President Joseph M. Katz, 54. Shouting to make himself heard above the roar of the presses, through which rolled 600 miles of paper daily, Katz exulted: "You can't eliminate Santa Claus."

Since Katz founded the company in 1945 on an investment of $10,000, Papercraft has become the world's largest maker of gift wrappings. Last year sales amounted to more than $24 million, almost twice those of 1962. For the first half of this year, sales are up 38% over the same period of 1966--although Katz would be the first to admit that this figure means little, since 90% of his annual business derives from the American penchant for placing prettily wrapped presents beneath the Christmas tree. This fact does not disturb Katz in the least. He is rather happy about the seasonal nature of his enterprise--knowing full well that on Dec. 25 almost all his annual output will be torn to shreds as Americans open their Christmas presents and create a brand-new market for 1968.

For Forlorn Servicemen. Katz is a remarkable mixture of opportunist and traditionalist. Born in Odessa of Russian-Jewish parents, he came to the U.S. as an infant, at the age of 14 was given a tiny printing press by his father. He used it to print letterheads and menus, and to turn out a magazine called Boy's Ideal, which eventually gained a circulation of 2,500 at 250 per annual subscription. He took his earnings and went to the University of Pittsburgh, but dropped out during the

Great Depression to become a paper salesman.

Then came World War II--and with it a boom in letter writing, mostly between forlorn servicemen and their wives and girls. Katz came up with Rite-Kit, an inexpensive stationery box that doubled as a writing surface. He formed his own company, and by war's end it was grossing $1,500,000 a year.

Katz knew that this could not last forever. "Rite-Kit was a war baby," he recalls. "People basically don't like to write letters, and I realized that when the war was over Rite-Kit would die." So how about Christmas? It should survive eternally. Katz therefore took his earnings from Rite-Kit, set up Paper-craft. He was willing to innovate; among other things, he helped pioneer the change from flat-folded Christmas wrappings to those sold by the roll. His stock in trade is the traditional design --Santa Claus, the Christmas tree, Donner, Blitzen, etc. This has helped him to become the main supplier of Christmas wrapping paper to tradition-minded giants like Sears, Roebuck.

Getting Itchy. Katz has his eye on a bigger package. In 1960, he paid $1,700,000 for the 91-year-old Massachusetts firm of LePage's, which makes glue and adhesive tape. He has since streamlined the operation, cutting out unprofitable lines, and LePage's is now in the black. Last year Papercraft entered a new field--that of vinyl tablecloths and place mats that look like lace--by buying out the Eastern Industrial Plastics Corp., since renamed American Universal Plastics Inc.

In the past 90 days, Katz has looked over 30 companies with an eye toward acquisition. "We're getting itchy," he says. "We are strong enough now to take on some pretty good-sized companies." But his ambitions go far beyond that. "Some day," he says, "I would like to take over a really giant company. I think about it a lot. While I'm shaving or driving to work."

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