Ex-banker pictured success in large graphics

Paul Lilienthal, who honed his entrepreneurial skills as a banker serving entrepreneurs, focused on one key question when he bought Pictura Graphics in 2003: How might the Golden Valley producer of large-format graphics broaden its offerings to both existing customers and prospective clients?

At the time, the company was headed for a $5.7 million gross with a comparatively narrow focus on photographic and ink-jet printing for the exhibits and events market. Since then, sales have climbed to $9.7 million in 2008 with the addition of new markets, a rapidly expanding clientele and several million dollars' worth of leading-edge technologies and equipment.

Lilienthal's latest strategy for filling what he calls the "what-more-could-we-be-doing" gap, however, might be the most important.

Early in 2007, Pictura launched a "green" product line dubbed ecoIMAGES, which involves graphics produced with recycled and recyclable materials and low-solvent inks. In the process, the company shifted its internal processes to focus on recycling and sustainability.

The move preceded by several months the establishment of the industry's Sustainable Green Printing Partnership, an effort to reduce the environmental impact of the printing and graphics industry. That helps explain why the partnership chose Pictura as its first "certified sustainable green printer."

That designation, in turn, recommended the company to an impressive array of new client prospects -- what Lilienthal calls "like-minded companies" with established "green" and sustainability initiatives.

Specifically, his target is the more than 120 Fortune 500 companies that make up the Dow Jones North American Sustainability Index, established in 1999 to track the financial performance of the major companies with sustainability programs.

The strategy made significant progress in 2008, when such "like-minded companies" generated 5 percent of sales, or nearly $500,000. Included on that list were some of the state's largest companies: General Mills, Target and Xcel Energy, plus Honeywell, formerly based in Minneapolis.

All of which inspired Lilienthal to predict that "we'll be a different company, a much stronger company coming out of this recession." Meanwhile, however, Pictura revenue is down about 20 percent so far in 2009.

There are limitations on the "green" production strategy, Lilienthal said. There are no "green" options for the adhesive vinyls often used for exhibits, nor are there "green" laminates. And in some applications, low-solvent inks are not effective; a vehicle graphic using such inks tends to scratch off, for example.

An itch to own

Lilienthal was a branch manager for the old Riverside Bank chain, a prominent small-business lender, when he succumbed to the itch to own his own business and bought Pictura.

It apparently was a comfortable transition: "When you're a loan officer, you have to understand the business fundamentals of your clients," said Lilienthal, who had several printing customers at Riverside.

In the ensuing years, Lilienthal spent more than $4 million on equipment and plant expansion to take Pictura beyond the company's limited client focus and production capabilities.

First, he added the capacity to do heat-transfer printing on fabric banners for the existing exhibits and events market; then he began producing point-of-purchase and point-of-sale displays for the retail market.

Before long, Pictura was creating wall-sized displays for client headquarters and what Lilienthal calls "visual merchandising" that covered the inside walls of retail outlets.

Next, he bought five new printers to significantly expand the company's ultraviolet printing capacity, which was about 40 percent less expensive than older processes.

The result is a company that gives new meaning to the "large-format" designation: graphics that range from wall-size displays to advertisements that wrap around a bus to banners that cover the side of a building.

And the payoff is a blue-chip clientele that includes Home Depot, Reebok and Supervalu, in addition to the "like-minded" sustainability clients.

The switch to a "green" product line wasn't Pictura's only environmental move. In 2008, the company recycled 33,000 pounds of manufacturing byproduct that previously had gone into landfills or incinerators.

And a drive to cut down the company's energy use produced a 13 percent reduction in consumption last year.

In short, the environmental strategy not only is "the right thing to do," Lilienthal said. "It's also a business opportunity" on both the sales side of the ledger and the production and cost side as well.

"The sustainability initiative leads to better quality and efficiency inside the business," he said.

Dick Youngblood • 612-673-4439 • yblood@startribune.com