A Minnesota company grows while employing a wider array of workers

Plastics are playing a central role at a nonprofit that's helping hundreds of people — both with and without disabilities — have better lives.

Minnesota Diversified Industries Inc., a maker of plastic corrugated sheeting, totes and trays, is a Minneapolis-based social enterprise — an organization that makes money to do good — with four locations in the state.

About 90 percent of its nearly $40 million in sales last year came from plastics.

"We have an internal target to have approximately 50 percent of our employees with documented disabilities and 50 percent without because we do believe there should be an inclusive work environment and not to isolate these folks from the general population," Vice President of Operations Rodney Wood said.

"One of the words we like to use is inclusive. We treat all of our employees as employees. And, in fact, I don't know for sure who has a disability and who doesn't," CEO Peter McDermott said. "People with disabilities just want to be given an opportunity just like everyone else is."

Ongoing work from the U.S. Postal Service serves as a backbone for the company's work in plastics, but MDI in recent years also has been working to develop a commercial line of business serving other entities. That commercial work has grown from less than $2 million in 2009 to $7 million last year.

MDI has been around since 1964 and started working with plastics about a quarter century ago, McDermott said.

"We got into the plastics business back in the early '90s, and primarily it started off with the Postal Service. That's basically a means to create jobs for people with disabilities. We became pretty good at it. And, to date, have delivered more than 90 million tubs for the Postal Service," McDermott said.

MDI has four locations in Minnesota: Minneapolis, Cohasset, Hibbing and Grand Rapids. It's in Grand Rapids where MDI extrudes its own polyethylene corrugated sheeting, which can then be die cut and screen printed before being shipped to the other locations for assembly, Wood said.

"We have two extrusion lines there that make the corrugated plastic sheet," Wood said. "They are continuous extrusion, and basically it's three sheet extruders lined up together with a corrugator."

MDI, in its busiest year, extruded about 12 million pounds of PE resin to create sheeting. The formula is mostly high density mixed with a little low density to create the right combination, he said.

MDI, over the decades, established a niche using PE to make its sheeting and finished goods for the government, but polypropylene is the prevalent material in commercial sector products, said Barb Majerus, vice president of sales at MDI.

"What we found in the commercial, competitive space, our key competitors were able to offer polypropylene. In certain applications, polyethylene is a better fit. Certain applications, polypropylene is a better fit," Majerus said. MDI decided about a year ago to launch a PP-based line of products, using purchased sheet, as a way to increase sales.

"Polypropylene seemed a very logical fit for us. We're in the early stages of gaining market traction with that. We also are looking at several other growth strategies over the next couple of years to add to that," Majerus said, including the medical sector. Work in medical could include making reusable, recyclable and returnable containers as well as providing packaging and kitting services.

About 300 people work at MDI these days, but employment numbers can vary depending on the workload. While the Postal Service accounts for a large portion of MDI's business, that work can be uneven from year to year, McDermott explained.

MDI had about 500 workers at one point late last year, but scaled back to accommodate business levels. The company uses an employment agency and contract workers to bring aboard more people when things get busier and cut back when necessary. Almost all current staff are actual MDI employees, and McDermott has a goal of expanding the workforce significantly in the coming years.

"I think one thing that makes MDI really unique is that we're a competitive business as well. So we're selling our products and services to the business community," Majerus said.

"We have to provide products and services that are high quality, on time, competitively priced. We actually have a fairly high performing workforce. And so even our folks with disabilities are expected to work at a certain rate of performance. So we just make sure we match the right people with the right jobs and training and accommodations so they can be successful," she said.

Training and accommodations, she said, help make workers successful. All employees at MDI are paid at least minimum wage and they receive benefits. "Minimum wage is good for everybody. Why shouldn't people with disabilities get paid minimum wage? That's our view," McDermott said.

Accommodations do not have to be dramatic, and they include allowances for people who might need to sit down or have a standing mat to help avoid fatigue. Others might require a shift modification if they are not able to work a full eight-hours. Those with emotional disabilities also meet with employment services personal located at each site as necessary.

Giving people the right tools and work stations for their circumstances also helps create worker success, Wood said.

While the Postal Service business can ebb and flow, overall success has allowed MDI to undertake an expansion and modernization effort in recent years. That includes moving into a new, 49,000-square-foot location in Minneapolis a few years ago.

The nonprofit also purchased a larger 110,000-square-foot building in Cohasset last year and is building a new 35,000-square-foot facility in Hibbing this year. This new construction will allow employees to move out of a century-old converted Greyhound bus station in Hibbing.

A key to MDI's success, the CEO said, is remembering its mission. People come first. And people with disabilities should have opportunities just like those without challenges.

"Shouldn't they have an equal right to employment? It's a right, if you will. They should have the same opportunities as everyone else. And it doesn't take a lot to accommodate," McDermott said. "If all the companies in the world would hire people with disabilities, we wouldn't need to exist. But that just is not the case."

MDI considers itself a role model for others, proof that a manufacturer can employ those with disabilities.

"This is an opportunity for them to hire people with disabilities and be successful," he said.

"For us, it's not about growing the revenue. That's a means to an end. It really is about growing the job opportunities, so however we can best do that," Majerus said. "We've had some success, obviously, a foundation in the government arena. But we believe the main growth is going to come in the commercial sector."