Poly-Seal expected to endure the jolt 'Very well respected,' says a competitor

customers supportive


October 08, 1998|By William Patalon III | William Patalon III,SUN STAFF Staff writer Joe Mathews contributed to this article.

Poly-Seal Corp., the Baltimore plastics company partially shut down because of suspected Legionnaires' disease, likely possesses the reputation and financial strength to weather this affair, experts said yesterday.

"They're very well respected," said Brett Kaufman, national accounts manager for Berry Plastics in Evansville, Ind., a company that competes with Poly-Seal in several areas. "I respect their business -- they do a very good job. They have good technology, know what they're doing and are very focused."

Poly-Seal, the maker of plastic caps for products such as shampoo, on Tuesday sent home half its work force -- about 250 employees -- after eight workers became ill and one died. Poly-Seal summoned local health authorities after company executives became suspicious because so many workers in one area of the Holabird Industrial Park plant had become ill. Yesterday, health officials confirmed that two of the ill workers and the deceased employee had Legionnaires' disease.

"We don't know how this is going to affect our business," Poly-Seal President William J. Herdrich said yesterday. "We're hopeful" that the company will bounce back completely once this problem is resolved.

A New York-based business-valuation expert said Poly-Seal appears strong enough to get through this troubled period.

Thomas P. Walpole, a certified public accountant who works in ** Rochester, spoke after looking at some privately available financial reports and statements containing information from 1994 forward to 1998.

"They look pretty healthy," Walpole said. "The questions you have to answer are: How solid is their place in the market, and who are its competitors? If they're locked into their market -- then it's no big deal. If they've been supplying customers for a long time," those customers are likely to stand by the firm.

Herdrich said the company has told customers about the illness and the investigation that health authorities are conducting.

"They've been supportive," Herdrich said of the company's customers. He said it was too early to say how long the partial shutdown would last.

Poly-Seal customers have included Johnson & Johnson Co., Revlon Inc., Avon Products Inc. and Unilever NV's Helene Curtis.

The outbreak comes just as Poly-Seal is restructuring itself. Sales -- about $50 million annually -- have been flat the past few years. The reason: The company has been selling pieces of its business that had thin profit margins or that did not fit with its new focus on more complex container caps. Increasingly, those caps are being designed in partnership with Poly-Seal's customers, Herdrich said.

Poly-Seal emerged in 1969 out of the reorganization of a bankrupt company, Baltimore's Standard Cap & Molding Co. That company's roots reached back into the 1930s. Now the firm churns out well over 1.5 billion caps a year.

Herdrich would not comment on the privately held company's profits or financial condition. Employees as well as their union representatives say the company has been open about what is happening and how the investigation is progressing.

"As far as we're concerned, the company has been very pro-active," said Paul Phillips, vice president of the United Steelworkers of America Local 6967, which represents workers at the plant. "They're not trying to hide anything."

Phillips himself works in shipping and receiving at the company.

He said Poly-Seal had gone beyond recommendations from its safety experts by closing part of the plant and has been updating workers each day since Friday, when the company learned of the death of employee Joenell Fisher. Fisher, 51, was a quality-assurance inspector for the company who lived in the Rosedale section of Baltimore County.

Pub Date: 10/08/98

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