After nearly 70 years in Baltimore, the plastic container maker Hedwin Corp. will start moving operations to Delaware early next year, with plans to shut its local operations down by 2017, its top executive said Monday.
When Fujimori Kogyo Co. Ltd. bought Hedwin for $22.2 million at a bankruptcy auction in May, Hedwin officials said the new buyer would preserve the company's jobs. Now the nearly 300 people who work at the plant on Roland Heights Avenue will need to reapply for their jobs at the new facility 67 miles from the current one in the Medfield neighborhood next to the Jones Falls Expressway.
Richard F. Broo, Hedwin's president/CEO, said the Roland Heights Avenue plant doesn't meet strict cleanliness standards for the containers that Fujimori Kogyo wants to start making in the United States. A suitable plant could not be found nearby, he said.
"We wanted to stay within the Baltimore area," said Broo, adding that company officials have been searching for a new spot for months.
Upgrading the Baltimore plant would have been too expensive, he said, since Hedwin leases rather than owns the property.
After searching in this area and elsewhere in Maryland, and in Virginia, Pennsylvania, southern New Jersey and Delaware, the company chose a plant in Newark, Del., that had been the headquarters of Kubetech Custom Moulding Inc.
Broo said operations would start moving in the first three months of 2015 and the move would be completed by 2017, but he could not provide a timeline for when the Baltimore-area jobs would go away.
Calvin Johnson, an assembly-line supervisor who has worked at Hedwin for 19 years, said he likely would not apply to keep his job because he does not relish the prospect of commuting that distance every day.
Most of the employees he's talked with do not want to reapply, Johnson said, although some would if they were given credit for their time already served at the company for benefits and vacation. That will not be the case, he said.
Johnson, who is 51 and lives in Woodlawn, said employees he's talked with are "displeased with the fact that years of service are being dismissed so easily. I feel pretty much the same way myself."
Broo announced the move at a meeting with employees two weeks ago, although he did not provide details about which parts of the operation would be moving when, Johnson said.
Hedwin filed to reorganize its finances in a Chapter 11 bankruptcy in April after difficulties that included a 2013 major fire at its plant, higher resin prices, quality-control problems and increased production costs. Declining margins and a high level of debt helped push the company into bankruptcy, an official said at the time, calling it the only alternative to laying off all the employees and liquidating the assets.
Until Fujimori bought it, Hedwin was employee-owned. In 2004, company executives took out a loan to buy the company through an employee stock ownership plan to avoid a sale by its then-owner to a company that intended to move Hedwin jobs to Canada.
Hedwin now operates as a division of Zacros America Inc., a Fujimori subsidiary. Fujimori's connection with Hedwin goes back to the early 1960s, when the Tokyo-based company secured a license to produce Hedwin's Cubitainer in Japan. The Cubitainer — which Hedwin makes in sizes from one gallon to about five gallons — is used in the food and medical supply businesses to hold such products as soy sauce and saline solution, Johnson said.
Broo declined to give specifics about the containers that require the more strict standards, but he said they would include flexible receptacles used in the food industry. The company also makes plastic handles for the boxes that the flexible containers fit into, bottles, buckets and heavy-duty plastic bags.