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February 09, 2004 01:00 AM

E pluribus Unimark (part 1 of 2)

Bill Bregar
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    What do these things have in common: plastic knives and forks, medical suture trays, parts for shotgun shells, contact lens carriers, Yorker-brand closures, a veterinary syringe and a flashy new Miracle-Gro pail?

    It reads like a plastics trivia question. The answer is anything but trivial: Unimark Plastics, the winner of Plastics News' 2003 Processor of the Year Award.

    Unimark mirrors its high-flying parent, Jarden Corp., by bringing together what seems like an oddball mix of plastic parts into a coherent, logical strategy with several goals: become the dominant player in niche markets with few competitors; focus on consumable products that need to be replenished; forge long-term links to bedrock partner customers, using product-design skills and expertise in plastics molding and automation to create the lowest total ``systems cost.''

    Unimark's devotion to the total package even has kept some work from moving to China.

    ``With each of our businesses, we look to be in a position where we can hold a commanding position in market share,'' said President Curt Watkins. ``Then we're not having to compete on price. We can compete on offerings. We can compete on technology, on innovation, on customer service and time to market.''

    To win the award, Unimark beat out two other finalists: automotive molders Blackhawk Automotive Plastics Inc. of Salem, Ohio, and Kam Plastics of Holland, Mich. Unimark scored high for its financial performance, quality, technological innovation and employee relations.

    Also, customer relations was an especially strong point, as Unimark is sole supplier for several high-volume products, such as a tray that holds surgical sutures for Ethicon Inc., Winchester shotgun-shell wads and contact lens packaging for a major supplier.

    Like any molder, Unimark looks for new work. In 2003, the company launched programs with nine new customers. But more importantly, Unimark retained 100 percent of its long-term customers - those it has had more than three years.

    Unimark is a division of Alltrista Plastics Corp., a Jarden subsidiary. Jarden has become a darling of the New York Stock Exchange, thanks to a soaring stock price and glowing analyst comments. Last year, Forbes magazine named Jarden one of America's 200 Best Small Companies. Ernst & Young last summer named its 39-year-old top executive, Martin Franklin, a regional winner of its Entrepreneur of the Year Award.

    Jarden, based out of a bare-bones office in Rye, N.Y., has been described as a ``mini-conglomerate,'' an assemblage of everyday consumer products such as Ball jars for home canning, kitchen matches, twine and the FoodSaver household vacuum packaging machines.

    Franklin said the strategy of domination in everyday, niche products is working. ``The parts work together far more efficiently than may be apparent at first blush,'' he said.

    Watkins said Unimark, with about $100 million in plastics-related sales, picks its battles carefully.

    ``We focus on the consumable consumer products that are lower on the radar screen. They're not the ones that the masses are going to go after,'' he said in an interview in Greenville late last year.

    Unimark follows the consumer products thrust of Jarden, but the plastics unit also brings medical products to the table - such as trays to hold Ethicon sutures and a catheter that holds an intravenous needle in place. In recent years, Unimark has developed medical needles and catheters as a core area of expertise.

    In fact, before Jarden made its big move into plastic cutlery, medical accounted for 60 percent of sales at Unimark. Consumer products now generate 65 percent of Unimark's business, while medical now accounts for 28 percent of sales, Watkins said.

    Unimark was founded as a custom injection molder in 1973 in Reedsville, Pa. Ball Corp. bought the company in 1978 and in 1993, spun off seven divisions to form Alltrista Corp. Backed by a New York investment firm, Franklin bought a stake in Alltrista in 2000. He was named chairman and chief executive officer in 2001.

    According to Forbes, since Franklin took over, the split-adjusted stock price has jumped more than sixfold. In 2002, the company reported profit of $36.3 million on sales of $368.2 million.

    Franklin moved quickly to sell off the bulk of the company's struggling thermoforming operations to Wilbert Inc., negotiating their planned sale before he even officially secured control of the company. Alltrista, later renamed Jarden, did retain a thermoforming plant in Fort Smith, Ark.

    In early 2002, he hired Watkins to run Unimark, replacing Charles Orth. Watkins has more than 27 years of plastics industry experience. Before joining Unimark, he was an executive with Cincinnati-based Plastic Moldings Corp.

    The six U.S. injection molding plants, which generated 2003 sales of about $100 million, have 150 presses, some running highly automated molding jobs. Robots are operating on more than 65 percent of the presses. Several plants have clean rooms.

    Here is a rundown:

    * Two plants in Reedsville focus on automated molding and assembly of long-running jobs such as the Ethicon suture trays for Johnson & Johnson and the Miracle-Gro package for Scotts Co.

    * The Greenville plant has molded medical products for 20 years. It is home to Yorker Closures, a well-known line of twist caps, spout caps and ribbon applicator caps found on everything from honey to wood glue.

    * A plant in Springfield, Mo., opened in 1996 to mold shotgun shell wads for Olin-Winchester Corp., the world's largest manufacturer of shotgun shells. Olin-Winchester used to mold its own parts, but now Unimark is its single-source supplier.

    * A plastic cutlery plant in East Wilton, Maine.

    * Another cutlery plant in Tupper Lake, N.Y.

    To fend off foreign competition from low-wage countries, the cutlery plants are highly automated, with robots that sort the items and put them in boxes. That high level of technology also is on display in Reedsville, at the dedicated Miracle-Gro molding cell. Scotts wanted to replace a basic stock pail for its signature plant-food product. Unimark won the business by offering complete design, through its Greenville-based Innovative Solutions design house.

    Unimark helped improve the polypropylene bucket, designing a domed lid that sheds water. To improve appearance, the edges of the container are rounded. A Miracle-Gro logo is molded on the lid. Another design change helps the buckets stack on top of each other like Legos, as each lid fits into the bottom of the pail on top of it.

    After the buckets are molded on a 1,000-ton Engel press, a robot moves them to a cooling station. Finally, they go through a fully automated assembly cell. The finished product is a bright, high-gloss container - and a new packaging market for Unimark.

    That ability to improve a product and dedicated production space won accolades from Jim O'Reagan, vice president of research, development and engineering at customer Span-America Medical Systems Inc.

    O'Reagan and Unimark go way back. In the early 1980s, while working at a pharmaceutical company, he visited the Reedsville plant and gave Unimark some molding work. Then he took a job at Span-America in Greenville.

    The Unimark salesman who knew him called and asked if Span-America had work. Span-America was nearing a decision on awarding molding on the catheter. O'Reagan gave him three days to make a proposal.

    ``They came back in three days and said that they'd do what it takes,'' he said.

    Span-America had purchased the catheter product from another firm. O'Reagan was looking for a low-cost molder that would assemble and package the device.

    ``Some of the lesser-known brands of the competition are made in China, and actually in Vietnam and Mexico,'' he said.

    Of the finalists for the contract, two U.S. companies had plants in China and Mexico, attractive because of low-cost labor. Span-America already was getting some work done in China and Taiwan.

    Even so, O'Reagan said he had second thoughts.

    ``I felt the best way was automation, which is the plan [Unimark] presented to us. That negates cheap labor,'' he said.

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