Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, January 29, 1995 TAG: 9501270028
SECTION: BUSINESS PAGE: F1 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
DATELINE: LENGTH: Long
"With our business up like it was last year, the economy was very strong," Higginbotham said.
Corrugated Container is a family-owned business that operates box plants in Roanoke, Winchester and Johnson City, Tenn., where sales last year increased by 32 percent, 49 percent and 40 percent, respectively. Even after four increases in the price the company pays for corrugated paperboard are taken into account, the company's overall sales were up 15 percent last year, Higginbotham said.
"Traditionally, January is a slow month [in the packaging industry], but we haven't lost any steam," he said.
The company plans on completing a 31,000-square-foot expansion of its Roanoke plant in April. The $3 million the company is spending on the expansion and new equipment will bring the company's total investment in the Roanoke plant to $15 million.
Already, though, the company has plans to spend $1 million more this summer on another 60,000-square-foot addition, Higginbotham said.
When both additions to the current 130,000-square-foot plant are complete, the company will have five acres under its roof. The plant is located on Commonwealth Drive behind Penn Forest Elementary School in Southwest Roanoke County.
Corrugated Container also has tentative plans to build a box plant in the Greensboro, N.C., area in 1996 where the company already has a sales office and a warehouse, Higginbotham said. The company, which serves an area from Winston-Salem to Durham, wants to build up its sales a little more in North Carolina before going ahead with the plant, he said.
"We've built a lot of business in that area and feel we can justify the plant," Higginbotham explained. One of the company's biggest customers in North Carolina is Carolina Biological, which supplies schools with laboratory materials, including live insects and animals such as butterflies and rats.
Corrugated Container's business gains reflect what the box industry overall has experienced as U.S. and foreign manufacturers have recovered from the recession that began in the beginning of the decade.
Box makers came into 1994 "singing the blues," but the business gained strength all during the year, said George Shipp, a securities analyst with Scott & Stringfellow in Richmond. He said he doesn't remember a time when an industry went from glut to shortage as quickly as the box business did last year.
According to the U.S. Department of Commerce, roughly 1,550 corrugated-box plants operate in the United States. About half of them, like Corrugated Container, buy corrugated sheets for making boxes rather than making the corrugated material themselves. Corrugated-box shipments in the United States during 1993 were worth an estimated $19.6 billion, with shipments for 1994 forecast at $20.3 billion.
D.J. Higginbotham, a native Nebraskan who managed what is now the Chesapeake Corp.'s box plant in Roanoke, started Corrugated Container in 1963. Higginbotham still serves as chairman of the board, but the company is run by his five sons: David, the company president; Ronnie, who oversees maintenance; Jerry, who's in charge of manufacturing; John, who manages the Winchester plant; and Paul, who's in charge of sales.
The vast majority of the boxes that the Higginbothams make are custom-ordered for specific uses. Among the company's 800 customers are machine manufacturers, food processors and computer software companies. The company makes very few boxes that it sells off the shelf, Paul Higginbotham said.
Among the company's local customers are Ingersoll Rand, Graham-White, Medeco Security Locks, Amp Inc. and PYA Monarch.
Some of Corrugated Container's products are patented, such as a corrugated "void filler" that is used to fill empty space in a box and prevent its contents from moving during shipment. It also manufactures an infectious waste disposal box for the University of Virginia Hospital.
"We're not looking for volume; we're concentrating on where we can give service and quality," Paul Higginbotham said.
"If they get quality and service, you're not so likely to lose an account," added brother David, the company president.
Within the past few years, the company has added three- and four-color printing presses to the Roanoke plant. "Color and graphics are what we're really promoting now; that's what our speciality is," Paul Higginbotham said.
The color presses are used to print boxes, but also for another major part of the company's business, the manufacture of corrugated point-of-purchase displays for a variety of products. Free-standing displays made in the Roanoke plant are used to showcase products for many of the nation's retailers, such as Sears, Price Club and Lowe's.
The fancy product displays are important for retailers who don't have a lot of salespeople to sell their merchandise, "where the product sells the product rather than salesmen," Higginbotham said.
One of Corrugated Containers' competitors is the Chesapeake Packaging Co. in Roanoke. Higginbotham refers to Chesapeake, which concentrates more on volume sales, as a "friendly competitor." The companies share some customers. Chesapeake's president, Ed Godsey, calls the Higginbothams "very professional people."
A steady roar of machinery, sounding like a river cascading over a cliff, greets visitors to the manufacturing area of Corrugated Container's Roanoke plant.
Raw corrugated sheets or finished boxes are stacked everywhere around the plant. Higginbotham explained that the volume of corrugated paperboard moving through the plant's presses and box-cutting machinery turns over three times a month. "It doesn't sit around," he said.
Avis Construction Co. of Roanoke is building the addition to the plant. After it's finished this spring, it will provide 4,000 square feet of office space for the company's structural design department and the addition of a graphics department. There, mock-ups of the company's products can be printed so customers can see what they're buying.
The remaining 27,000 square feet will be used for warehouse space. The company currently rents 35,000 square feet of warehouse space at the old American Viscose plant in Southeast Roanoke.
The company used conventional financing from Crestar Bank to pay for the expansion because it was less expensive than industrial development bonds, Higginbotham said.
The company installed a new two-color press in July and in December added a $1.1 million flexo-folder-gluer - a machine that prints, folds and glues boxes all in one operation. The computer on the machine is capable of storing information for building 10,000 different boxes, Higginbotham said.
One section of the plant contains a shop where the company makes its own die-cut forms that are used to cut box patterns out of the corrugated paperboard. A certified testing laboratory occupies another part of the plant. In the lab, various devices simulate the stresses that boxes undergo during shipment. Boxes the company makes for the Red Cross for shipping blood products were recently being tested in the lab.
The plant also has its own garage, large enough to accommodate repairs on the company's nine trucks, which are used to pull a fleet of 30 trailers. Two more trucks are on order.
The company employs 100 people at its Roanoke plant and 25 at each of its other two plants. The Roanoke plant operates full first and third shifts, and wants to build up to a full afternoon shift as well, Higginbotham said.
"We're looking for good employees now," he said.
by CNB