Back in 2000, Kimberly-Clark Corp. selected Lion Plastics Inc. to thermoform packaging for Cottonelle Fresh Rollwipes, a pre-moistened toilet paper hailed by the Dallas-based consumer products giant as the first major toilet paper innovation in more than 100 years.
It was a big deal for a small Clifton, N.J., thermoformer, and it meant adding a second plant in Georgia. But the project didn't go according to plan.
On June 22, Lion filed for Chapter 11 protection from creditors in U.S. Bankruptcy Court in Newark, N.J., to recover from debts of more than $4 million, which the company blames on Kimberly-Clark.
``To a small company, that's a fortune. It was projected to be 50 percent of our sales, but it maybe got to be 10 percent at one point,'' said President Diego De Leon in a July 15 telephone interview. He said sales of the wipes did not meet the companies' expectations.
``It was a marketing fiasco at Kimberly-Clark. They dropped the ball. We got dropped alongside it. I wrote a letter to the CEO, begging them to give me more work. They had a Sumo wrestler on a housewife magazine that said, `It might not look pretty, but it works.' What does that mean? You mean you couldn't find a way to market wet toilet paper?''
Lion opened a thermoforming site in Elberton, Ga., just to support the project. Lion closed that operation last year and moved the three lines to its Clifton plant. Lion also laid off 10 employees in Clifton.
``They discontinued the job on my end, and I was the sole supplier [of the packaging] on that project,'' De Leon said. ``They would not issue a formal contract. They knew how to cover themselves, and I didn't.''
Kimberly-Clark officials did not return a call seeking comment.
De Leon said the firm expects to emerge from bankruptcy protection in three months.
``Everything seems to be going well,'' said De Leon, who runs the company with his father Argentino and other family members. ``We spoke to our vendors prior [to filing], and everybody seems to be taking it nicely. It will make my balance sheet look better. This was a very profitable business before the Georgia fiasco.''
Argentino De Leon started the operation with one machine more than 20 years ago after emigrating from Uruguay. Lion has annual sales of about $6 million.