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Up from the ashes: American Cedar Inc. A product of 1986 fire.

A 1986 fire that destroyed a large part of Mid-America Products Inc. at Hot Springs sparked the beginning of Julian McKinney's cedar products business, American Cedar Inc.

McKinney recently was selected as the Small Business Administration's Arkansas Small Business Person Of The Year for his ability to overcome adversity.

Sales have increased from $190,000 during American Cedar's first full year of operation in 1987 to more than $2 million last year.

"I think back and wonder how in the world I ended up in the wood products business," says the 49-year-old McKinney, whose background was in plastics production prior to joining Mid-America's staff in 1980. McKinney designed and managed the production of the company's cedar chest line.

Now, McKinney says he can't imagine doing anything else.

He purchased 20 percent of Mid-America's stock in 1984. When the fire occurred, Mid-America was forced to sell part of the business and subcontract with a competitor.

With personal funds and a $140,000 SBA-guaranteed loan, McKinney bought Mid-America and began rebuilding the company.

He renamed the business and changed its focus.

Mid-America Products, manufacturer of cedar chests and closet liners, became American Cedar, manufacturer of cedar closet accessories, home decorative pieces and cut-to-order lumber.

"People began accepting cedar as nature's answer to chemical deterrents for moths and insects," McKinney says. "With that in mind, we identified markets for our products."

Major Markets

McKinney depends on four major markets:

* Mail-order business -- McKinney says having the company's products in widely circulated catalogs helped American Cedar establish itself nationally.

* Mass merchandisers -- Customers include Target Stores Inc. and Michael's Stores Inc. McKinney was careful to build a broad client base, not allowing sales to be dominated by a single retailer.

* Original equipment manufacturers -- McKinney says OEMs technically are competitors. But because American Cedar sells such companies cut-to-order materials for use in producing finished products, a friendly relationship is maintained.

* International clients -- American Cedar began overseas marketing efforts last year. The company now has clients in Europe, Japan, Canada and Mexico.

Since 1988, American Cedar has operated from a 40,000-SF facility in the Garland County Industrial Park. Recent improvements to the facility have allowed the company, which has 60 employees, to upgrade its products and introduce more sophisticated lines.

Joe Foglia, district director of the SBA's Little Rock office, says McKinney will represent Arkansas in Washington during Small Business Week in May.

"Julian McKinney is one of Arkansas' great small business success stories," he says. "He will represent our state well."
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Title Annotation:Across Arkansas
Publication:Arkansas Business
Article Type:Company Profile
Date:Mar 30, 1992
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