Published in Manufacturing
Cellulose Material Solutions LLC plans a $9 million capital investment at its Jenison headquarters. Cellulose Material Solutions LLC plans a $9 million capital investment at its Jenison headquarters. COURTESY PHOTO

Wave of e-commerce growth pushes Jenison thermal packaging maker to expand

BY Sunday, October 24, 2021 07:00pm

JENISON — With brisk business in two surging market segments, Cellulose Material Solutions LLC is investing in expanding its operations and beefing up production capacity.

The Jenison-based manufacturer of eco-friendly insulation, acoustic panels and thermal packaging solutions has embarked on a $9 million capital investment that will add 54,000 square feet of warehousing and manufacturing space to its facility at 2472 Port Sheldon St. CMS also will install a second production line that is expected to triple the output of products when it comes online in the first quarter of 2022, as well as add 12,000 square feet of new office space.

The company’s eco-friendly thermal packaging solutions have almost single-handedly fueled the need for expansion, according to CMS Vice President Matt Henderson. With demand for eco-friendly packaging already growing over the last decade, the COVID-19 pandemic has sent e-commerce surging.

“Pre-COVID, what was driving demand was a want from our customers for recycled packaging that could be re-recycled back into the waste stream to reduce the waste that they were putting into the market. We were displacing traditional products like Expanded Polystyrene (EPS) coolers,” Henderson said. 

“Once COVID hit, it became a necessity to get more products to consumers because of things like food shortages and for people with pre-existing conditions or elderly people,” he added. “That helped us. In metropolitan areas, we saw a huge push to get meal kits and also groceries out to people who were high-risk and people couldn’t get out of their homes.”

The company’s thermal packaging solutions are used predominantly for food shipments and meal kits. In fact, during the height of the pandemic, CMS partnered with Farm Box, which worked with the state of New York to get food to high-risk people who could not leave their houses.

CMS manufactures two different types of thermal packaging solutions, including the InfinityCore thermal liner, which consists of 85-percent recycled polyethylene terephthalate (PET) content, or recycled polyester. The company also recently received a patent for the product. 

Meanwhile, the InfinityCell thermal liner is created from 95-percent recycled paper that can be repulped and reused.

Aside from the recyclable nature of the packaging, Henderson said another benefit of the company’s packaging solutions is that they are flat, which helps businesses reduce the amount of required warehouse space while making it easier to ship more packaging at once, especially when compared to bulky ESP coolers.

Green evolution

While many companies are shipping unprecedented volumes of products because of the rise of e-commerce during the pandemic, many local businesses have been focused on creating more sustainable solutions over the last decade, according to Dan Schoonmaker, executive director of the West Michigan Sustainable Business Forum.

“What I think you’re seeing here is consumer goods are moving away in a well-documented and universally visible manner from palletized materials that arrive at the store where you unbox it, put it on the shelves and you have all these pallets and plastic wrap to manage. Amazon boxes are now the equivalent,” Schoonmaker said. “As a result, you’re seeing enormous investments in improving the sustainability of that activity.”

Many companies that are heavily involved in direct to consumer shipping see solving the packaging dilemma as a crucial component of maintaining a green business.

“What we’re seeing is a fairly universal investment, from the smallest to largest brands, in improving their sustainable outcomes and stories,” Schoonmaker said. “Single-use packaging has become one of the dominant threats within that. When we think about that, we mostly think about take-out containers and water bottles, but the fastest growing segment of that is e-commerce.”

Clearing hurdles

CMS embarks on its expansion as the manufacturing industry faces a critical labor shortage and supply chain volatility. While not entirely unscathed, the company is charting a path through the disruptions.

Within its supply chain, CMS sources most of its recycled polyester for InfinityCore domestically, with a small amount coming from overseas, Henderson said.

The expansion will create 40 jobs in a tight labor market, but Henderson said the new production line will feature automation to limit the need for human labor. The line will automate actions like cutting and stacking large sheets of thermal packaging material.

“Out of those 40 (new jobs), we have hired 10 already. We’re trying to pre-hire and train for our lead and skilled positions,” Henderson said. “Although there is a shortage, and we are feeling it like a lot of manufacturers, we feel like we did a pretty good job of onboarding new employees and keeping them due to company culture.”

Henderson said that CMS considered expanding its operation elsewhere throughout the country, including locations closer to urban cores.

CMS worked with the Michigan Economic Development Corp. (MEDC), economic developer Lakeshore Advantage Corp. and Georgetown Township to secure a combination of tax abatements and workforce training funds to support keeping the project in West Michigan.

“In CMS’ case, they did have a strong case to locate nearer to an urban core that is buying more of these meal kits and be closer to their customers,” said Amanda Murray, vice president of business solutions for Lakeshore Advantage. “It is really important to look at the tools we have to support companies like that. We know that if companies aren’t able to expand locally, they’ll put investments in other places and take jobs with them.” 

Murray also noted that while fewer companies are working with Lakeshore Advantage on expansion projects in Allegan and Ottawa counties, the number of firms developing cold storage and warehousing space has increased. Food processing projects also have been ramping up across Lakeshore Advantage’s service area, she said. 

“I do think that’s been an impact of COVID,” Murray said. “CMS, they’re really in that food processing supply chain. People are home ordering food kits. How do you get that food kit? You need that thermal packaging.”

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