Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, March 1, 1992 TAG: 9203020194
SECTION: BUSINESS PAGE: C-1 EDITION: METRO
SOURCE: GEORGE KEGLEY BUSINESS EDITOR
DATELINE: LENGTH: Long
Brothers David, Paul, Ronnie, Gerald and John Higginbotham make brown cardboard boxes and graphic displays for retailers in a Starkey factory, backed by smaller plants at Johnson City, Tenn., and Winchester. The Roanoke County plant, the fourth home of the company, has been expanded twice since 1980.
Perhaps what prevents the disharmony that often sets in by subsequent generations of family ownership is that each Higginbotham brother works in his own field, and they iron out differences by compromise and committee. The expansion of their business is proof of their success, the owners said.
The business was started by their father, D.J. Higginbotham, almost 30 years ago. Now board chairman of the family-owned company, he occasionally comes out of retirement for monthly board meetings.
David Higginbotham is president and controller; and his four brothers are vice presidents: Paul handles sales; Ronnie is in charge of maintenance; Gerald directs manufacturing; and John manages the Winchester plant. "But we don't worry much about titles," Gerald said.
"We have our differences, but we have our own jobs," David added. "I don't have time to get into production or sales."
They talk with each other about routine business almost daily. "With fax machines and modems on computers, we don't have to run up and down the road all the time," the company president added.
The Higginbotham brothers are actually the third generation in the box business. Their father's father managed a box plant in Omaha, Neb. And the fourth generation, some of their 10 children, probably will join the company after they complete their schooling, David said.
D.J. Higginbotham said he makes recommendations, but his sons do not always follow them. They have "a pretty solid business," he said.
In the family business, "no one is boss. We debate what is the best thing to do," the senior Higginbotham said. He said his sons turned out well, as businessmen and as individuals, "because they were raised in a very strict Christian faith."
Corrugated Container is a custom manufacturer, making boxes from 1 foot square up to 11 feet, for customers in a variety of industries, including electronics, optical fibers, pharmaceuticals, food, glass and auto components. "If you have a product, we produce a shipping container for it," said Paul, the sales vice president. "Everything we produce is for a specific need."
Because the customer base is so widespread, the largest customer represents less than 6 percent of the company's total sales, he said. Some customers need boxes every day; others may require only one or two runs a year.
Corrugated Container competes nationally with about 1,700 box plants in a $17-billion-a-year industry, according to Dick Troll, chairman of the Association of Independent Corrugated Containers, an Alexandria-based trade association.
Americans each use an average of 100 boxes every year, said the association's chairman, Dick Troll. He said half of the box makers are independents, but 22 large companies like Chesapeake and Westvaco account for half of the boxes produced.
Similar to many other industries, box makers have felt impacts of the economic downturn.
Although good volume was reported in January and February, "it will take a few more months to pull out of the recession," according to David Higginbotham. "Our trend tracks the business cycle very closely," added Paul. About a dozen salesmen, including five in Roanoke, handle "probably 2,000 different items," Gerald said.
If business picks up this year as the brothers expect, they plan to expand their Winchester and Tennessee plants. Both are strategically located and are growing faster than the Roanoke County operation, Paul said.
Another option they are exploring is acquisition of another plant at an undisclosed location to boost volume. This would eliminate the five-year startup time required for a new plant.
About 20 percent of the company's volume is in printing graphic displays for such retailers such as Best Products; Sears, Roebuck; and Wal-Mart. That segment is expected to grow into half of the workload while box manufacturing probably will remain about level, Paul and David said.
As products are sold, shoppers look at the cartons rather than the product. "The buying decision is made on the carton," Gerald said.
Printing for the labels of the corrugated boxes of such customers as Burger King, as well as advertising agencies, is a related business for the company.
The Higginbothams have been purchasing automated equipment for their box and display business. They are settling into use of a new $1.5-million, four-color printer. Their computer-aided design system works faster than a draftsman, Gerald said.
The system has the ability to produce a three-dimensional display for a customer. "We can show a customer on a screen how it will look when completed," he said.
The graphic displays will enable the company to extend its market to the East Coast, Paul said. "Less competition and a higher price enables us to ship farther."
Mail-order fulfillment companies, a growing business in Western Virginia, are good box customers, he said. Inventory is not a problem for a company filling custom orders. "We are not producing to have it sitting on the floor," Gerald said.
The Higginbothams also do a lot of "just in time" manufacturing, delivering boxes when they're needed.
He said all of his company's waste material is sent back to paper mills for recycling.
A related operation within the Starkey plant is Better Packaging Systems Inc. The division is a problem-solving packaging operation owned equally by the Higginbothams and Ron Sower, the unit's general manager.
Sower said his firm is a sales organization devoted solely to offering clients "better ways to purchase a piece of packaging equipment and better ways to use it." He sold four pieces of equipment to C.B. Fleet Co., a Lynchburg pharmaceutical firm, and he sells systems from Litton Industrial Automation Division.
Sales volume in 1991 was four times as great as the preceding year and it should double in 1992, Sower said. Sower started the company about 10 years ago and then moved into the Higginbothams' plant, where he operates a separate business.
Operating with five employees in Roanoke and at warehouses in Winchester and Lynchburg, Better Packaging sells a variety of packaging materials, including "environmentally friendly" items, he said.
CORRUGATED CONTAINER CORP.\ IN PROFILE\ Business: The company makes corrugated boxes and displays for retail stores.\ History: Founded in Roanoke 1963 by D.J. Higginbotham, now the board chairman. Now operated by his five sons, Ronnie, David, Paul, Gerald and John Higginbotham.\ Financial: The privately owned business does not report sales or profits. The company said its volume has more than doubled since 1985 and tripled since 1980. Its forecast is for sales to approach $40 million by 2000.\ Employees: 130: 85 in Roanoke, 20 in Winchester and 25 in Johnson City, Tenn.\ Customers: About 450 within a radius of 150 miles of the three plants\ Facilities: Buildings include 125,000 square feet in Roanoke County; 36,000 square feet in Winchester and 36,000 square feet in Johnson City. Its truck fleet includes eight tractors and 25 trailers.
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