44 Franklin Street
P.O. Box 2002
Nashua, New Hampshire 03061-2002
Fax: (603) 880-5671
Incorporated: 1904 as the Nashua Card, Gummed & Coated Paper Co.
Sales: $552 million
Stock Exchange: New York
SICs: 2672 Coated and Laminated Paper, not elsewhere classified; 7384 Photofinishing Laboratories; 3695 Magnetic & Optical Recording Media; 5112 Stationery and Office Supplies; 3861 Photographic Equipment and Supplies
Nashua Corporation in Nashua, New Hampshire, is a medium-sized company that conducts a variety of businesses. Its core enterprises are photofinishing (processing of film), the manufacture and sale of coated products such as thermosensitive paper and adhesive tapes, computer product manufacture (primarily computer disks), and office supplies (toners, fax paper, and remanufactured laser printer cartridges). Nashua has leading market shares in labels and tapes, and has the number one market share in the United States, Canada, and the United Kingdom in mail order photofinishing services.
Nashua had its origins in a gummed paper manufacturing enterprise in Rockport, Massachusetts, that went out of business in 1898. The owner, a farsighted entrepreneur and inventor, Charles H. Crowell, sold his faltering firm that year to Carter, Rice & Company of Boston, which retained him as manager of their new subsidiary, renamed Winthrop Manufacturing Company. In February, 1904, a fire destroyed the plant, which had relocated to south Boston, sending the owners Carter and Rice casting about for a new locale for their subsidiary. They found the Nashua Card and Glazed Paper Company, in Nashua, New Hampshire, which was heavily in debt. That year, when the present-day Nashua Corporation was founded, the bankrupted owners gladly sold their factory to Carter, Rice & Company for $74,000 plus mortgage. The following April, the wholly owned subsidiary was incorporated as the Nashua Card, Gummed and Coated Paper Company. Besides manufacturing gummed flats, gummed paper, and sock linings, Nashua also continued the product lines of the previous company, namely glazed paper, cardboard, and “surface coated” paper.
The new company slowly modernized. In 1910, a plant telephone was added and new office machinery and boilers were installed. Expansion took place with the addition of a fourth story, the creation of a separate purchasing department, and the construction of a lab, and, at this time, the company hired its first chemist. The foundations for modern research and development were laid early and would become more and more crucial to the company’s development.
Nashua added an important new product line in 1907, with the manufacture of waxed paper, an up and coming new invention. A French-American, Henri Sevigne, had invented a waxed paper bread wrapper as a young man in the 1880s. More and more bakers adopted the handy item for loaves of bread and Nashua, already specializing in the manufacture of coated paper, seized on this new product, even though it meant paying the inventor a handsome royalty on his license. Soon waxed paper moved out of the bakers’ realm into practical, everyday use. For many years it was Nashua’s most important commodity. By 1910, Nashua had built the first plant in the country designed solely for the mass production of waxed paper. Business in this consumer item really took off with the invention in 1915 of the automatic bread wrapping machine, first developed at Nashua, which attained the largest market share in the United States of waxed paper bread wrappers.
After 1913, Nashua became an independent, public company, ceasing to be a subsidiary of Carter, Rice & Co., although it still had close links with the corporation. In 1916, at the height of the First World War, the company altered its name to reflect its changed status by eliminating the word “Card,” becoming simply the Nashua Gummed & Coated Paper Company.
Business expanded greatly during the war years and, due to rigorous research and development efforts, a new method of coloring was implemented in the coating division, while storage space was increased and a loading platform constructed. The American Tobacco Company became a significant customer at this time. In 1916, Nashua sold 1,500 tons of coated lithographs to the tobacco company, which partly compensated for the war-induced dearth of raw paper necessary for the waxed paper division. By then, waxed paper was being used heavily by chewing gum manufacturers and as lunch wrappers. Despite the raw material and labor shortages, business boomed and a new plant was leased in Middletown, New Hampshire.
After the war, because of the erection of large tariff barriers in the industrialized world, Nashua’s management decided to construct their first subsidiary in Canada. In so doing, they evaded the stiff Canadian tariffs on coated products and waxed paper, while continuing to serve their largest foreign market. The Canadian Nashua Paper Company opened its doors in the spring of 1920, specializing in waxed and gummed paper.
Despite the rough recessionary times following the war, Nashua continued to expand. Besides the Canadian subsidiary, in 1921 Nashua bought out the bankrupted National Binding Company of New York City, which started Nashua on the road to becoming an important manufacturer of package sealing and other adhesive products, such as duct tape used in household repairs and in plumbing. The adhesive business became so important for Nashua that the package sealing division was incorporated into a separate, wholly owned company in 1924, the Nashua Package Sealing Company.
Such significant expansion led Nashua’s stockholders to agree in 1924 to what then amounted to a huge expenditure for modernization and streamlining of operations—$130,000. The result was a company that wasted less, eliminated duplication, and decreased its overhead expenditures. Part of the modernization efforts showed up in the payment of employees by check instead of cash, which was considered an overdue response to the rash of payroll robberies, of which the Sacco & Vanzetti case had been the most notorious.
The late 1920s were among the company’s most prosperous years. New and important product lines were added, such as a “fancy” paper brand called Nirvana, popular among women, which came out in 1926 and for many years showed a handsome profit. At this time, the Canadian subsidiary branched out, forming a new company to manufacture milk bottle caps and paper containers for the dairy industry. In 1929, gilt imprints were made for the hat, shoe, pencil-making, and bookbinding industries. “Velour” paper and telegraph tape for Western Union also were profitable. The challenge that the new product cellophane presented to Nashua’s waxed paper industry was countered by “artistic” printing on Nashua’s waxed paper products, until the company started up its own cellophane division.
Thanks in large part to the strenuous modernization and streamlining efforts of the mid-1920s and continuous product diversification, the Depression of the 1930s did not affect the company seriously. Management calmly adopted the New Deal’s increased regulations, even when the mandate to hire 30 percent more employees created some headaches at Nashua. The extra employees came in handy, however, when business once again expanded in 1937 with a large building program that included a separate edifice for administration.
By 1940, the federal government was surveying all factories in the nation to determine how they might contribute to wartime production in the event of hostilities. With America’s entry into the war, production for civilian needs virtually ground to a halt. Nashua’s advantage was its manufacture of basic necessities, such as adhesives and other coated products that were needed during the war years; in addition, the company entered the unknown arena of gun manufacture, which it discontinued immediately at the war’s end.
By then, the number of employees had climbed from a mere 70 in 1907 to 1,500, and annual sales stood at a healthy $13 million, from only $125,000 38 years earlier. Under the company’s new president, Vasco Nunez, Nashua adopted new long-range objectives that gave priority to research and development. The traditional product line of colored coated paper was discontinued, and Nashua embarked on a new product line, thermal paper, that remained one of its most important commodities. A new adhesive tape, Rhino corrugators tape, was developed for corrugated paper, and flat gummed papers also became profitable new products.
Because of the company’s broader product lines, its name was altered to Nashua Corporation in 1952. Nine years later, Nashua’s office products division was established, which soon began to handle such items as photocopy paper, toners, and developers. The year the office products division was established, Nashua purchased its first European business, Copycat Ltd. of London. From then on, international markets would contribute significantly to sales revenues. Two years later, in 1965, Nashua acquired Paramount Paper Products in Omaha, Nebraska, marking the company’s entrance into the increasingly important pressure-sensitive label arena. A year later, Nashua’s net sales had climbed to $65 million.
By the 1970s, Nashua had entered into the world of computer products, the manufacture of diskettes having evolved from the company’s traditional product lines. But the company was facing increased Japanese competition and declining sales. The “work in quality” business philosophy of W. Edward Deming had gained ground in Japan, and was slowly winning disciples in this country. Nashua’s new chair and chief executive officer, William E. Conway, was an early adherent, and in the late 1970s and early 1980s, Conway implemented a 33-hour course for all Nashua employees in which Deming’s ideas were introduced and discussed. Nashua then terminated bonus incentives for managers, which Deming criticized as leading to low production targets. Instead, Nashua substituted equitable profit sharing. The implementation of Deming’s ideas at Nashua, according to market analysts, led to sales increases and sound financial footing. First evident in the sale of tape, the turnaround became apparent by the mid-1980s in the sale of computer disks, of which Nashua became a leading supplier. The company also acquired mail order photofinishing businesses in the United States and Canada, and subsequently in the United Kingdom in 1990. Nashua then climbed to the number one position in market share in the mail order photofinishing business. Despite the setback of the 1990 to 1991 recession, the company quickly rebounded and in 1992 had a strong financial balance, with a debt of approximately $25 million and equity of $130 million.
Under President and Chief Executive Officer Charles E. Clough, Nashua had four main business divisions in the early 1990s: photofinishing, coated products, office supplies, and computer products. The number one market share in mail order photofinishing in North America and Great Britain, this enterprise consisted of processing film for amateur photographers and offering photo-related products via mail to customers, such as photo imprinted t-shirts and mugs as well as photo albums. This business, which suffered from the 1990 recession, was slowly recovering two years later. Its future looked bright, since mail order photofinishing was 10 to 20 percent more economical than minilab film development.
Nashua’s coated products division included the production and marketing of thermal paper, computer labels, carbonless paper, and thermal pressure-sensitive labels as well as adhesive tapes. This division generated almost $200 million in sales revenues, making it Nashua’s largest. Labels and tapes, in which Nashua had leading market shares, draw the top share of sales revenues.
A low-energy thermal label developed in the early 1990s as well as a new coating method for duct tape manufacture helped the company maintain its lead. Nashua became the nation’s biggest supplier of thermal pressure-sensitive labels to the supermarket industry.
The office supplies division manufactured and marketed toners, developers, and fax and photocopy paper, and remanufactured and sold laser printer cartridges. While this division faced major competitors with huge cash reserves such as the Xerox Corporation and the Eastman Kodak Company, Nashua found its own niche in this growing business. Beyond distributing its office supplies to approximately 250 dealers nationwide, it branched out to distribute to mass merchandisers like K-Mart and various office supply superstores. Remanufactured laser cartridges held the greatest future market potential, with sales of this product nearly doubling on an annual basis because of their competitive price as compared to new cartridges. Remanufactured laser cartridges were also environmentally sound, since they did not end up in the landfill but were refilled with new toner and reused.
Finally, the computer products division produced and marketed magnetic disks used in computer disk drives. The fastest growing segment of this multimillion dollar enterprise (nearly one hundred million dollars in export sales alone) was thin film rigid disks, in which Nashua’s market share kept growing.
On the eve of the twenty-first century, Nashua Corporation was just beginning to tap into significant international markets that in 1992 generated approximately 20 percent of its total sales revenues. The company continued to invest heavily in research and product development, approximately $12 million annually. Research and the development of new products and expansion into foreign markets were the strengths of Nashua Corporation, boding well for its future growth.
Annual Report, Nashua, New Hampshire: Nashua Corp., 1992.
Cochran, Thomas N., “Nashua Corp.: Its Name Is a Winner on ‘Someone Else’s Box,’ “Forbes, July 18, 1988, pp. 61–62.
Henderson, B. A., “Nashua Corp.: Company Report,” Prudential Securities Inc., October 19, 1992.
“A History of Nashua Corporation,” Nashua, New Hampshire: Nashua Corp., 1968.
Jaffe, Thomas, “The Knock on Nashua (Earnings and Stock Price Recovery),” Forbes, April 27, 1992, pp. 418–419.
Linden, Dana Wechsler, “Incentivize Me, Please,” Forbes, May 27, 1991, pp. 208–212.
Marenghi, Catherine, “Nashua Keeps Quality Flame Burning in Customer Service,” Computerworld, January 6, 1992, p. 61.
“Nashua Corp. (offers to repurchase 2.75 million common shares),” New York Times, May 3, 1990, p. C5(N) and D5(L).