Growing outside the box.

Specialized Packaging Group opens new Kansas plant

For Specialized Packaging Group (SPG), growth is not a luxury. It's a necessity. In April, the Hamden, Connecticut-based company opened a new $6 million facility in Lenexa, Kansas, strategically branching out both geographically and into different markets.

SPG, No. 43 on the BE INDUSTRIAL/SERVICE 100 list, designs and manufactures the printed cardboard boxes that enclose some of America's top-selling consumer products. Tide detergent, Colgate toothpaste, Sara Lee foods, and other leading brands reach store shelves inside SPG packaging. With sales of $82 million in 2000, SPG is the largest minority-owned manufacturer of paperboard folding cartons in the U.S.

"We recognized that we needed to diversify not only the markets that we served [by expanding] our customer base but also to broaden the range of our manufacturing capabilities," says Carlton L. Highsmith, president and CEO, SPG. "Even though these are difficult economic times, we moved ahead with expansion plans we had put in motion back in 1999."

Most of the funds invested in the Lenexa facility were generated from internal SPG cash flows, says Highsmith. Housed in a 60,000-sq.-ft. building held on long-term lease, the plant is equipped with a Swiss-made 8-Color Bobst Lemanic 65 U.V. flexo printing and converting line, Jagenburg high-speed gluers, and Bobst die-cutter. The first company in North America to deploy this servo-driven technology, SPG gains fast turnaround agility. The Kansas site targets the healthcare, personal care, specialty food, and pet-care markets. Until now, SPG's primary market focus has been companies in the dry laundry, dry food, and pet-care markets--giants like Procter & Gamble, Pillsbury, and Clorox.

Howard Elliott, associate director for supplier diversity, Procter & Gamble, says SPG's expansion demonstrates that the company is viable and thriving, as well as capable of accommodating several technological formats. "This is going to allow them to expand their markets with other Fortune 500 companies," says Elliott.

Last year, under Procter & Gamble sponsorship, SPG was designated a "Corporate Plus" member of the National Minority Supplier Development Council (NMSDC), an acknowledgment of its nationwide capabilities.

"The company has been able to position itself to grow exponentially, answering the need of corporate America for larger minority companies that can survive as first-tier suppliers," says Harriet R. Michel, NMSDC president.

"The Lenexa plant gives us $20 million to $25 million in additional capacity immediately. We expect that to double to $40 million to $50 million by the end of next year with the installation of the second converting line," says Highsmith.

SPG hasn't forgotten facilities it acquired in 1998, either. Its London, Ontario, Canada, sheetfed litho printing plant added $20 million in capacity last year. Its Radisson, New York, rotogravure printing plant added $15 million in capacity this year. With more than 500 employees in total, SPG also operates a corrugated facility in Detroit and design/ innovation centers in Hamden, Connecticut, and Cincinnati. "We feel that we are now poised to grow our business to nearly $200 million within the next few years," forecasts Highsmith.