In a wide-ranging interview with PrintWeek, O’Connor suggested moving to smaller order sizes will be a major challenge for paper suppliers, adding: "We think many of our merchant partners have not yet found a way to deliver the small order profitably.

"We’ve spent a lot of time and money on technology and developing different supply chains in order to accomplish delivering smaller orders to printers."

O'Connor said Mohawk is also looking for more direct sales both through its website as well as non-traditional supply chain models.  "We’re also working with a combination of carriers, including Fed Ex and UPS, and some of our own regional partners to deliver to printers on a regular basis profitably," he added.  "This trend is going to continue to grow."

Mohawk is North America’s largest privately-owned manufacturer of fine papers and envelopes which are preferred for commercial and digital printing, photo specialties and high-end direct mail. In 2012, it closed its Beckett Mill in Hamilton, Ohio, and exited a portion of the low cost coated and opaque paper business.

"That resulted in a top line revenue drop of nearly $40m in 2012, but profits increased," O’Connor explained. "So, we’re learning we can’t be everything to everybody, and we have to be smarter about which products we promote and sell."

Part of that strategy includes a move into higher-margin specialty substrates - Mohawk’s specialty substrates line has been available for over a year now, and O’Connor said the company expects to significantly expand it over the next 11 months to include pre-converted products, as well as more label, magnet-embedded, and various poly and vinyl options.

"We’ve developed a highly-skilled specialty substrates sales and product development team and as this category grows, it’s becoming a business within our business," he said. "Although commercial printing paper is becoming more of a commodity, we have found opportunity for growth in the market of specialty photo papers."

But while margins for specialty/premium products are better, O’Connor warned that price is always going to be an issue. "Mohawk hasn’t issued a price increase in over a year and we do not anticipate a price increase for our papers in 2013," he said. "We understand it’s important to our customers to hold prices stable. Being on the premium side of the paper business, when pulp prices fluctuate, we take the good with the bad."

As for the year ahead, O’Connor said, "We began 2013 with guarded optimism - January is turning out to be a better month than we anticipated. We’re building backlogs. Between specialty substrates, premium papers, and photo papers, we’re forecasting a modest gain in volume this year. The key to our business is selling papers at the appropriate average sell price."

In 2010, Mohawk founded Pinhole Press, a small on-line photo business, which was acquired last autumn and is now being run by liveBooks in California. "People ask me all the time, ‘Why did you start an online photo business?’ And I explain that Mohawk is not selling products – we’re in the ‘demand creation’ business," O’Connor said.

"The industry has changed. Creating a premium online photo business was a way for us to create demand. Not only for Pinhole Press, but for other businesses that have come to Mohawk to request our papers as a result of our connection and relationship with Pinhole Press. If companies are willing to look at market insights, follow trends, and create demand rather than sell what they have, there’s a very good opportunity for everyone in this industry."