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August 07, 1995 02:00 AM

PLAYING BALL: FOREIGN COMPETITION DEFLATED BY OHIO ORBS

Bill Bregar
Senior Staff Reporter
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    ASHLAND, OHIO - Almost every play ball sold in America today was hatched from a rotational molding machine in Ashland. After a wave of consolidation, the domestic play ball industry is down to two major players: Hedstrom Corp., which claims to be the world's largest, and National Latex Products Co. Located just a few blocks from each other, the companies were founded by the same man.

    They also share rubber roots. Origi-nally the balls were made of rubber, but toy makers switched over to rotomolded PVC plastisol in the late 1950s and early 1960s, according to James Braeunig, vice president of operations of Hedstrom's plastics division.

    Play balls, brightly colored with swirls, glitter and Disney characters, fill the Hedstrom factory. A visitor is hit with happy memories: a toddler hugging a ball bigger than he is; that unique sound the balls make bouncing on a sidewalk.

    The plant produces some 25 million balls a year. The company also does custom rotomolding. With 26 machines, Hedstrom generated $29 million in 1994 rotomolding sales. At National Latex, four machines generate $7 million in rotomolding sales. Together, the companiesemploy about 400 rotomolding workers in Ashland.

    A ball is a simple product. But making play balls at a profit is anything but child's play, said Braeunig and H. Ross Gill III, president of National Latex.

    To see why, check the prices at your local mass retailer. When Braeunig's career in ball making began in 1974, a play ball cost 99 cents. Today, low-end balls retail at $1.19, and you can still find 99 cent specials, he said. Then came competition from Thailand, Taiwan, Mexico and Spain.

    Making money in play balls became even harder, leading to an industry consolidation in the 1980s and 1990s. Hedstrom led the movement by purchasing several competitors, including Fli-back Co. in High Point, N.C., Barr Rubber Co. of Sandusky, Ohio, and Preston Manufacturing Ltd. in Kitchener, Ontario. Especially important was the Barr Rubber acquisition, Braeunig said, because it brought Wal-Mart business to Hedstrom.

    At the same time, Hedstrom was going through ownership changes of its own. Its history dates to 1914, when it was founded as Eagle Rubber Co.

    H. Ross Gill Sr. and Harry Polley incorporated Eagle in 1916. In 1939, Gill left Eagle and founded National Latex, which the Gill family continues to own. Eagle Rubber merged with Hedstrom Corp. in 1981. Then a series of leveraged buyouts began, the most recent in 1991 as Ditri Associates Inc., a Pittsburgh holding company, bought Hedstrom.

    Braeunig said foreign competition and its cheap labor are not much of a threat today. At Hedstrom, labor only accounts for about 10 percent of the cost to produce a play ball. And because of automation and work cells, Mexican producers may use five or six people to do the work of two Hedstrom employees, he said.

    ``We've been able to really push all [foreign competitors] back out. They just cannot make any profit in the ball business in the United States. I think it's partially because we've done such a great job of reducing our costs and also the logistics.''

    ``Logistics'' means the path traveled from the plant to your local store. Follow the bouncing ball: First, a rotomolding machine operator squirts plastisol into mold cavities that, when open, look like an egg cup big enough to hold an ostrich egg.

    The mold is bolted shut and sent through the cycle. Molded balls are removed and passed to another employee, who inflates them, checks for defects, then tosses them into a bin. Most often, the balls are deflated and shipped flat to distribution centers across the country, where they have to be reinflated and shipped to the store.

    Hedstrom has agreements with distributors to inflate the balls again - a barrier to foreign competitors.

    ``By the time they ship it in and have duties on it and get into the logistics of trying to ship playballs across the country, we're definitely the low-cost producer,'' Braeunig said.

    Hedstrom also gains leverage by licensing movies and television shows. The company has invested heavily in technology, like a new pad printer that can print color images on every part of a ball's surface. The next evolution: in-mold decals.

    Braeunig and Gill are bullish on their industry: ``Rotomolding's really growing,'' Gill said.

    One of the early rotomolding companies, National Latex beganusing the process to make PVC balls and squeeze toys in 1953, he said. Now National Latex wants to do more custom molding.

    ``We're going to try to sell our business to [original equipment manufacturers],'' Gill said. ``We've found [custom molding] is more profitable than the play ball business.''

    Hedstrom spent more than $1.5 million in the past year to upgrade and expand capacity. It is to begin operating its seventh blow molding machine at Ashland in September, to make 3-inch balls for play areas such as at McDonald's restaurants.

    A year ago the firm bought a 360-degree pad printer to decorate vinyl playballs. In the past year it added three 800-pound McNeil rotomolding lines, one each in Ashland, Dallas, and Dothan, Ala., to bring its total to 26 at its three production facilities.

    Two of the three refurbished lines were in storage for about four years after Hedstrom acquired them when it bought Preston Manufacturing Ltd. of Cambridge, Ontario.

    Hedstrom had sales of $32 million for the year ended July 31, 1994. Rotomolding accounted for $29 million, with blow molding and latex and sponge balls accounting for the rest. About 75 percent of rotomolding sales are proprietary.

    Plastics News correspondent Michael Lauzon contributed to this story.

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