Md. dairies: Only 4 now Embassy's land bought by developer

equipment goes cheap


July 08, 1998|By Ted Shelsby | Ted Shelsby,SUN STAFF

WALDORF -- The 35-year history of one of the last five dairies in Maryland came to an unceremonious end yesterday at the auction block.

The buildings and nearly 25 acres of land occupied by Embassy Dairy Inc. were acquired by a local real estate developer for $1.325 million. The sale is subject to approval by U.S. Bankruptcy Court.

Much of the equipment -- including ice-making machines, metal stools, huge storage tanks, homogenizer motors and hundreds of feet of stainless steel pipe -- was bought by a Mexican company for pennies on the dollar.

The auction, operated jointly by Michael Fox International of Baltimore and Harry Davis & Co. of Pittsburgh, attracted about 200 potential buyers. They included representatives of other dairies in Maryland, other parts of the country and Canada.

None seemed interested in taking over the plant and trying to revive a business that once employed 240 and was one of the largest employers in Charles County.

Frank Chaney, president of Chaney Enterprises, which acquired the real estate, said that in the short term he would look for tenants to rent the property. Long term, he said, the property would likely be developed.

Chaney Enterprises owns a four-story office building on U.S. 301 just outside the Embassy property's gates.

David Fox, the auctioneer and president of Michael Fox, didn't receive a bid in the opening round as he tried to sell the real estate, machinery and equipment in bulk.

When that failed, the equipment was auctioned off piece by piece, with much of it being purchased by Eliseozuno Verduzco, a representative of Belticos, a company in Jalisco, Mexico, that operates dairies and juice-processing plants.

"There were real good deals," Verduzco said through his interpreter, Alfonso Guerra, who did the bidding.

Larry Webster, general manager of Cloverland Green Spring Dairy in Baltimore, agreed.

Much of the equipment was selling for about half of what it would cost new, he said.

Some went for much less. A milk container filling machine that might have cost $300,000 or $400,000 new brought a high bid of $4,500.

Webster said he was hoping to pick up some spare parts or equipment, such as a forklift, at a good price.

Other bidders, such as 68-year-old Everett Witter, were coming back to the place where they once worked to purchase tools or office supplies they once used.

"I worked here for 16 years before retiring in 1993," said Witter as he looked over a table packed with alternators, 4-foot-long pipe wrenches, jacks, timing lights, industrial-strength drills and starter motors.

"It was a good place to work," said the former mechanic. "I really looked forward to coming to work every day. I don't know what happened. It seemed like they priced themselves out of the market."

James A. Vona, vice president of Dairy Maid Dairy Inc. in Frederick, who also was looking for bargains, blamed the competitiveness of the industry and the small profit margins of milk processors for the demise of 36 of Maryland's 40 dairies since the mid-1980s.

"You have to stay mean and lean to make it in this business today," said Vona.

Embassy, which was founded in the District of Columbia in the early 1960s and moved here in 1975, got into financial trouble in May last year when it lost a major contract to supply milk and fruit juices to the 120 Safeway stores in the Baltimore and Washington area.

That forced the company into bankruptcy and necessitated about 70 layoffs.

The company hoped to make a comeback through a program in which the remaining workers agreed to give up nearly 12 percent of their pay in return for 51 percent ownership in the dairy.

That plan dissolved in February, with Embassy's loss of another major piece of its business.

Dallas-based Southland Corp., which operates about 500 7-Eleven stores in the Baltimore-Washington area, moved its milk business from Embassy to three other dairies.

It was a fatal blow. The 7-Eleven stores accounted for about 40 percent of Embassy's business. The dairy closed in late March and laid off the last of its workers.

"It was a sad situation," said Cathy West, vice president of operations for Embassy. "We had a number of people who worked here all their lives. There was no place for them to turn. There aren't that many dairies for them to go to in search of jobs."

Pub Date: 7/08/98

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