Allied creates unit to dispose of military waste

January 29, 1993|By Ted Shelsby | Ted Shelsby,Staff Writer

Allied Research Corp., a Baltimore-based company that has built much of the ammunition and artillery shells stored in bunkers around the world, said yesterday that it had created a division to help dispose of the military waste.

The new subsidiary, ARC Services Inc., will also be involved in the cleanup of industrial waste.

The business of munitions dismantling and environmental cleanup could be worth billions of dollars and represents a natural extension of Allied's munitions production, said Jay R. Sculley, president and chief executive of Allied Research. Mr. Sculley assumed his posts at the small and fast-growing defense contractor the first of this month.

"It follows that since we are skilled at putting ordnance together, these same qualifications will serve us well in taking them apart," Sculley said.

Allied Research has hired Charles R. Henry, a recently retired Army general, to head its new venture, ARC Services, which initially will be housed at corporate headquarters in the Legg Mason Tower in Baltimore. At the time of his retirement last month, General Henry was deputy director of the Defense Logistics Agency.

Since 1990, Allied has improved from a money-losing operation, with revenue of about $45 million, to a thriving business, with sales in excess of $200 million. Earnings for the year just ended are expected to top $14 million, Dr. Sculley said.

"The outlook [for Allied] is real good," said Ashish R. Thadhani, an analyst with Ladenburg, Thalmann & Co. Inc. Mr. Thadhani has recommended the stock, which closed yesterday at $13.625 a share, saying he expects it "to go into the 20s."

Mr. Thadhani said Allied, unlike many U.S. defense contractors, markets the bulk of its munitions to Middle East countries, "an unstable part of the world where defense spending is still on the rise."

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