After three years of semi-retirement and dabbling in other fields, Michael Carota has returned to Performance Polymers Inc., the resin distributor he helped found in 1989.
``I was getting awfully sick of golf and skiing,'' Carota, 47, said by phone May 18. ``This wasn't a path I ever envisioned taking, but after talking it over [with Performance], I decided to come back.''
Carota and four partners launched Leominster, Mass.-based Performance after several years of experience at Plastic Distribution Corp. of Ayer, Mass. The group then sold Performance to European distributor Ellis & Everard plc in 1998.
Carota left in mid-2001, shortly after E&E was acquired by Royal Vopak NV, another European distributor. In 2002, Royal Vopak spun off Performance and other parts of its business into Univar NV, a separate, publicly held company based in Rotterdam, the Netherlands.
The firm's current totals of $85 million in annual sales and 18 sales representatives both are lower than when Carota left in 2001.
``We're clearly in a turnaround situation from where we were,'' said Carota, who again will serve as Performance's president. ``We're still OK financially, but we're not doing as well as we had in the past.''
To turn things around, Carota plans to add six sales reps by the end of the year and six in the first half of 2005.
``The most critical step is hiring sales people,'' he said. ``There are areas where we need to fill spots, like the West Coast and Midwest. We still have a real solid line card, we just need to get sales going again.''
Performance's line card includes 15 suppliers. It sources commodity resins from firms such as Nova Chemicals Inc., Equistar Chemicals LP and Sunoco Inc., and engineering resins from BASF Corp. Performance does not own its own facilities, but uses 36 public warehousing sites in the United States and Canada.
Carota said he has no plans to add suppliers in the near future. Longer-term, Carota said he would not rule out the possibility of Performance growing by acquiring smaller distributors.
In his time away, Carota said he first went about six months without working, but soon realized that such a lifestyle ``wasn't interesting at all'' and that he missed being in business. He then spent some time consulting with a venture capital firm before serving as chief financial officer at Numark Industries LLC, an audio equipment maker in Cumberland, R.I. He was at Numark for about a year before being recruited back to Performance.
Since returning, Carota has seen some familiar faces in the distribution market, although not necessarily at Performance. James Duffy - one of Carota's original partners - bought a pair of East Coast resin distributors last year and combined them to form Goldmark Distribution Inc. in Newton, Mass. In 2002, longtime Performance staffer Michael Sweeney and nine other Performance employees joined Pure Polymers LLC, a distribution firm in Chanhassen, Minn.
Even Carota's original boss - Plastic Distribution Corp. founder Regis Magnus - is back in the business. Late last year, Magnus launched Resin Distribution Inc. in Ayer with David Hazel, another PDC/Performance veteran.
Carota said he sees potential in the industry because of resin producers' desire to do more business through distributors, partly as a result of cutbacks in their own businesses. He added that he believes it is more difficult for a new distributor to get started in the present market, since resin makers have reduced credit terms, resulting in less leeway for new firms to handle their debt payments.
Carota insists he plans on sticking around.
``This isn't a short-term opportunity,'' he said. ``I'm going to be here as long as they keep me here.''