Plastipak pours it on
CHAMPAIGN – Detergent, salad dressing, motor oil ... If it can be bottled, Plastipak Packaging probably makes a container for it.
The Michigan-based manufacturer makes plastic containers for some of the most familiar products on store shelves: Tide, Cheer and Gain detergents, Castrol motor oil, Kraft salad dressings and, yes, even Miracle Whip.
The company has 12 manufacturing plants in the United States, with its second-largest in Champaign. In recent years, the family-owned company has expanded into Europe and South America.
The Champaign plant at 3310 W. Springfield Ave. has about 683,300 square feet of manufacturing space. It also has 633,915 square feet of leased warehouse space, according to the company's 2004 annual report.
The plant employs about 650 people, according to the Champaign County Economic Development Corp.'s Manufacturers Directory. Neither general manager Dennis Nuesmeyer nor William Slat, the company's vice president of operations and manufacturing, returned calls seeking comment for this story.
Plastipak has been in Champaign almost 30 years, initially operating from a building at Washington and Walnut streets in the downtown area. In 1990, shortly before the company moved to its new location on the city's west side, it employed only 120 locally.
The presence of Kraft Foods is one of the major reasons Plastipak has such a big plant in Champaign.
"We locate our manufacturing plants near the filling sites of our key customers," the company noted in its annual report.
"We are the largest supplier of plastic containers to Kraft Foods in North America for their salad dressings, 10-ounce and 18-ounce squeeze mayonnaise and Miracle Whip, barbecue sauces and grated cheeses," the report added. "We also produce plastic containers for such popular processed foods as coffee creamers, relishes and vegetable oils."
During its 2004 fiscal year, Plastipak made and distributed about 8.5 billion containers worldwide for more than 450 customers. Its biggest customer was Procter & Gamble, which accounted for 27 percent of Plastipak's revenue last year.
"In North America, we are the exclusive supplier of plastic containers to Procter & Gamble for heavy-duty, liquid laundry detergents," Plastipak's annual report said.
The company also said it provides 100 percent of the plastic packaging for Kraft salad dressings.
The list of products in Plastipak containers goes far beyond detergents and salad dressings. Among other products that can be found in Plastipak containers are Pepsi Cola, Aquafina and Deja Blue water, Bounce fabric softener, Lysol products, Electrasol dishwasher detergent and Tropicana juices.
Plastipak's parent company, Plastipak Holdings Inc., is based in Plymouth, Mich., and headed by William C. Young, who started the company in 1967. Young, whose age was listed as 64 in the 2004 annual report, is chairman, president and chief executive officer.
He's also the principal owner. In 2004, Young owned 75.6 percent of the company's common stock. A limited partnership controlled by his family owned another 13.9 percent.
In a 2002 prospectus, Plastipak provided an overview of the packaging industry. At that time, the industry was estimated to have about $100 billion in annual revenue, with plastic packaging making up about 30 percent of the market.
Paper packaging accounted for 49 percent, and metal packaging made up about 16 percent – but plastic's share was growing rapidly.
Within the $30 billion plastic packaging industry, plastic containers made up more than $10 billion of sales. Bottles made of PET (a plastic resin known as polyethylene terephthalate) and HDPE (high-density polyethylene) made up about 90 percent of that, the company said.
Sales growth in the plastic container industry rose 7 percent a year between 1989 and 1999, the prospectus said.
According to Plastipak's 2004 annual report, the biggest demand comes from the beverage industry. Carbonated and noncarbonated beverages account for about 44 percent of the company's plastic container revenue.
Consumer cleaning products account for about 30 percent, while food and processed juices claim about 15 percent. Industrial, automotive and agricultural products fill about 5 percent, while other products make up the remaining 6 percent.
In 2004, Plastipak's top 10 customers generated 66.2 percent of the company's revenue, the report said.
Plastipak's rapid growth is reflected in the company's revenues. Between 2000 and 2004, revenues increased by 43.1 percent, and in 2004, annual revenues topped $1 billion for the first time. Production volume grew 47.5 percent over that time.