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  • Anne Chadwick Williams / awilliams@sacbee.com

    ANNE CHADWICK WILLIAMS awilliams@sacbee.com Boxes move down the assembly line at the Sacramento Container Corp. plant at the former McClellan Air Force Base. Business is so good that the company is undertaking its biggest expansion, including a new warehouse in Fresno, a new $12 million piece of machinery and a 33 percent increase in the number of employees.

  • Anne Chadwick Williams / awilliams@sacbee.com

    Owner and CEO Joseph LeRoy, left, says he hasn't a clue how busy his thriving business might be if the economy were healthy.

  • Anne Chadwick Williams / awilliams@sacbee.com

    ANNE CHADWICK WILLIAMS awilliams@sacbee.com José Murillo loads cardboard into a box-making machine at Sacramento Container Corp. last week. Owner and CEO Joseph LeRoy says Sacramento Container can produce and ship an order in three days – 24 hours if it's an emergency.

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As economy falls, maker of boxes keeps climbing

Published: Sunday, May. 31, 2009 - 12:00 am | Page 2D

As Joseph LeRoy inches into his sixth decade, he is conquering the world's tallest mountain peaks, one by one. He's no slouch at his day job, either.

LeRoy is the chief executive officer and owner of Sacramento Container Corp., a decidedly industrial operation with some pretty glamorous assets: Even in a recession, LeRoy's box-making business keeps climbing.

The company is churning out enough corrugated boxes for pasta packages, milk jugs, wine bottles and dozens of other food products to warrant a new warehouse in Fresno – raisin growers are there – a new $12 million piece of machinery – and a 33 percent boost in employees. It's Sacramento Container's biggest expansion ever.

LeRoy can't even imagine what his business would be like if the economy was healthy.

"Jeez, I don't know," he said, laughing at the prospect of boom times.

Every day is a good day for the unassuming corrugated box.

Corrugated material was first patented in Victorian England where it lined tall men's hats. In the late 1800s, Wells Fargo started using boxes made from corrugated cardboard for shipping freight. A few years later in 1903, the growing breakfast cereal industry adopted corrugated boxes for shipping.

In the United States and Canada today, corrugated material is a $25.2 billion industry, according to the Web site corrugated.org.

"It's the most important and used container in the business," said Jim Butschli, features editor with Packaging World magazine in Chicago. "There's nothing new or sexy about it, but it does get the job done."

LeRoy, who once owned a similar company in Phoenix, bought Sacramento Container in 1992. The company, then in West Sacramento, was generating $3 million in annual sales with 18 employees.

Annual sales today: $63 million. Number of employees: 130.

"It's amazing the ways you can make money, huh?" LeRoy said, as he lead a recent tour of his cavernous plant complex on the former McClellan Air Force Base.

LeRoy is 60. When he was 46, he ran his first marathon, and seven years ago he summitted Mount Everest. On this day at McClellan, he ambled through his plant as it roared with machinery.

The ex-Marine's compact bulk seemed more like a former prize-fighter's than a wiry marathoner's or spry mountain-scaler's. He nodded with familiarity to line workers as they watched corrugated sheets zip by to be printed, scored, folded and glued.

The boxes will end up stacked at Sam's Clubs, Wal-Marts, Raley's, Safeways, Jelly Belly's and BevMos. The company supplies boxes for 67 products sold at Costco.

In one part of the huge plant, a giant clearing on the factory floor is waiting for a monstrous piece of machinery that will make the corrugated sheets that LeRoy now has to buy. He'll need another 40 or so employees once the corrugator is running in October.

All because everyone has to eat.

Manufacturers of food shipping and display containers are benefiting from the relatively recession-resistance of groceries, industry watchers and economists say.

"The consumption (of food) might drop slightly, but it's more of a necessity," said Joseph Reagor, an analyst with Very Independent Research in New Jersey who tracks International Paper Co., the largest container board producer.

"For that reason, paper products haven't taken the same hit as steel and aluminium."

Paper manufacturing heavyweights, such as International Paper and Georgia-Pacific, dominate the market. IP's annual revenues alone are nearly $12 billion, dwarfing independent manufacturers, Reagor said.

Global giants offer economies of scale, consistency in the product and supply.

"If a disaster happens, IP can reroute the supply chain," he said.

But the nearly 800 independents nationwide have carved out a share for themselves.

"Local producers survive recessions because they have closer relationships with their customers than global ones do," Reagor said.

Prices are tied to the local economy, not by corporate mandate, he said.

LeRoy believes he can thrive by zeroing in on his customers. His 14 royal-blue tractor-trailers are emblazoned with the company logo that he says sets him apart: "Changing the rules."


Call The Bee's M.S. Enkjoi, (916) 321-1106.


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