Resin distributor Northern Polymers Inc. has turned a bad debt into an opportunity to enter the rotational molding field.
Plymouth, Ind.-based NPI acquired the assets of American Poly earlier this year when the Zeeland, Mich.-based firm, which rotomolded portable toilets, went out of business. American Poly closed its doors still owing NPI a considerable sum for rotomolding polyethylene powder purchased last year.
NPI owner Emeric Szalay worked out a deal with American Poly ownership under which the debt would count toward the purchase price of the business. He declined to specify the size of American Poly's debt to NPI but said it was ``in the six figures.''
Under the agreement, NPI, a five-employee firm that distributes off-spec and wide-spec resins, is not responsible for any of American Poly's other debts.
Szalay then opted to close American Poly's plant in Zeeland and sell its two rotomolding machines while retaining the firm's molds, tools, inventory and customer list, as well as sales manager Sue McBride.
In April, Szalay met with Eric Gottuso, chief executive officer of Ameri-Kart Corp., a rotational molder in Bristol, Ind., and signed an agreement under which Ameri-Kart would produce portable toilets that NPI would market.
Adding the American Poly business - which sold about 5,000 portable toilets last year - will boost NPI's annual sales to $5 million, from its current $3 million.
``It's certainly unusual for a resin broker to buy a molder,'' said Szalay, who has renamed the business American Poly-Rest. ``But sometimes an opportunity can't be ignored and this is one of those times.''
Szalay added that he thinks he can succeed where American Poly's original owners failed because NPI is in better financial shape.
``I really thought American Poly was overwhelmed,'' he said. ``Their debt was very high and when they had a drop in sales from 1999 to 2000, they couldn't survive. But our only overhead with the business will be a couple of employees.''
Szalay also said he isn't worried about stepping on customers' toes by entering the rotomolding market. NPI sells to other rotomolders but none that produce portable toilets, he said.
Ameri-Kart, a division of Myers Industries Inc. of Akron, Ohio, ranked 12th in Plastics News' 2000 ranking of North American rotational molders, with annual sales estimated at $26 million.