STRICTLY BUSINESS: SPARTECH FOCUSING ON ADDING PRODUCTS

Spartech will continue to focus on two major factors in the company's rise from a small operation to a giant in the plastics industry.

Shareholders attending the recent annual meeting of Spartech Corp., headquartered in St. Louis, were told the company will focus on expansion of new uses for its products, and new products, along with future strategic acquisitions.

Through acquisitions and expansion of its products, Spartech has grown into one of the leaders in the plastics processing industry.

Spartech, with two operations in Cape Girardeau -- Spartech Plastics at 2500 Spartech Drive and Spartech Compounding on Nash Road -- reported record sales and earnings for its fiscal year ended Nov. 1, and has continued with record sales and earnings for the first quarter of 1998.

Spartech is a producer of engineered thermoplastic materials, polymeric compounds and molded profile products. It has 25 plants throughout North America.

Sales for fiscal 1997 were $502.7 million, up 28 percent from the $391.3 million recorded in 1996. Operating earnings were $49.7 million for 1997, an increase of 44 percent from the $34.5 million a year ago.

The company recently released record sales and earnings for first quarter, with $133.1 million in sales and $7.1 million in net earnings, or 25 cents per diluted share.

Those totals are a far cry from the early Spartech Co., which was founded as Spartan Manufacturing Co. in 1960 by Lawrence Powers.

Spartan went public as Spartech in 1978 and began to focus on plastics in the 1980s. Acquisitions started in the mid-1980s. Between 1984 and 1987, Spartech acquired five plastic makers, one of them the former Atlas Plastics facility in Cape Girardeau.

Powers resigned from Spartech in 1991, and Bradley Buechler, president and chief executive officer, began to run the show.

After showing losses for 1990 and 1991, the company has had six years of increasing earnings.

Buechler told shareholders the company could enjoy another excellent year in fiscal 1998.

Buechler cited some reasons for his optimism:

-- The backlog is up 30 percent from the same period a year ago.

-- More benefits are anticipated from buying Preferred Plastics.

-- The acquisition of Polycom Huntsman is expected to close March 31.

-- Five new products were released in 1997, and plans have been announced for five or six new products by this spring.

Spartech has expanded rapidly over the past decade. In 1985 shares in the company sold for as little as 50 cents. The stock was trading at more than $20 last week.

Spartech's two Cape Girardeau facilities provide about 150 jobs. Nationally, the company employs more than 1,800 workers.

Plastics is one of those markets that will have a good run for the next 40 to 50 years, said Buechler.

There are about 2,200 plastics processing companies in North America. Of those companies, only about 375 top $50 million in annual sales.

While acquisitions will continue, even without them Buechler said the company should reach about $700 million in sales within five years.

"I expect the business to grow solidly over the next five-plus years," he said. "I would not be surprised if we became a $1 billion company in that time."

Spartech is divided into three groups -- extruded sheet and roll stock, color and specialty compounds, and molded products.

The larger of the two local facilities is Spartech Plastics. The plastics division, which produces sheet and roll stock, accounts for 13 of the company's plants and 74 percent of sales. With 36 percent of the market share, the company is the largest single producer in that aspect of the industry.

Its products are used by the sign, spa and automotive industries.

Spartech Compounding is one of four plants in that group that accounts for 18 percent of the company's sales.

It makes products primarily for the cosmetics, lawn and garden, electronics and transportation industries.

Both plants are regional hubs for other Spartech operations, meaning the general managers in Cape Girardeau also oversee the operation of plants in other communities.

Spartech Corp. is listed on the New York Stock Exchange and has increased in price by 430 percent since early 1993. Its common stock symbol is SEH.

B. Ray Owen is business editor for the Southeast Missourian.