With its sales to health-care institutions up 25 percent in each of the past two years and projected to grow 35-40 percent in both 2007 and 2008, Dispoz-o Products Inc. has created a division, Dispoz-o Healthcare.
``We wanted to have a division dedicated to that market so that we can more easily put resources into that business and so we can develop research and development programs,'' said Jeff Swiger, director of strategic accounts and of the new division.
``With acute-care facilities, long-term care, assisted living, in-home care and hospitals, the health-care industry is the fastest-growing segment of the economy,'' Swiger said Nov. 1 in a telephone interview.
Dispoz-o manufactures disposable plastic cutlery from polypropylene and polystyrene, flexible drinking straws from PS and Envirofoam products. The company then packages the products into meal and dietary kits for the food-service and health-care industries.
Swiger said sales at the private company, based in Fountain Inn, N.C., have almost doubled in the past five years to $75 million, with sales to health-care institutions accounting for about 15 percent.
But that is just the tip of the iceberg, he said.
``In the next two to three years, I see that portion of the business being upward of 30 percent of total sales,'' which would more than triple health-care sales to between $34 million and $39 million annually, he said.
That prediction is based on Dispoz-o's expectation of ``no less than 15-20 percent annual growth for the immediate future,'' Swiger said, putting overall sales at between $115 million to $130 million if that forecast pans out.
Dispoz-o has sold products, mostly meal kits and dietary kits, to the health-care market for 15 years through distributors. But in the past two years, it has concentrated on developing relationships with key national and regional general purchasing organizations and health-care cooperatives to get a larger footprint in those markets.
Swiger said the company is looking to expand into new product areas - maybe adding a cup business with lids. He also said Dispoz-o is exploring the use of corn-based polylactide polymers as a potential raw material for cutlery and straws.
``We are having different levels of success, but the most promising is for use with our Envirofoam products. The health-care industry is interested in sustainable and green products,'' said Swiger.
About half of the 600,000 square feet at the company's Fountain Inn facility is dedicated to manufacturing.
There are 20-25 injection molding presses, 34 extruders and six large thermoforming machines.
Also, there are 50-60 machines in the kit-making department where the meal kits are put together and wrapped. Swiger said the company typically invests $3 million to $5 million annually in research and development, and that it has put in ``well over $10 million in capital equipment improvements'' in the past two years.
``We have purchased newer, faster and more complex machines'' for straw manufacturing, he said, a niche that has been growing at a 30-35 percent rate for the past two years.
Dispoz-o also has added ``proprietary automation equipment'' for kit manufacturing, boosting speed and output and reducing waste, he said.
Those investments and its 100 percent vertical integration has helped the company cope with rising raw material prices.
``We have minimized our exposure to raw material prices because we are 100 percent integrated in manufacturing,'' Swiger said.
Dispoz-o employs more than 700 in Fountain Inn and its two distribution centers in Commerce, Calif., and Houston.