[Congressional Record (Bound Edition), Volume 146 (2000), Part 5] [Extensions of Remarks] [Pages 7401-7402] [From the U.S. Government Publishing Office, www.gpo.gov]UNION PACKAGING--NEW PHILADELPHIA MINORITY ENTERPRISE ______ HON. CHAKA FATTAH of pennsylvania in the house of representatives Tuesday, May 9, 2000 Mr. FATTAH. Mr. Speaker, today I recognize a significant new minority enterprise in the Philadelphia area, Union Packaging, and its African- American president, Michael Pearson. Union Packaging was launched in December of last year by a $25.8 million 3-year contract to supply paper cartons to 2,300 McDonald's restaurants along the east coast. As a minority supplier, Union Packaging joins a growing force that last year provided over $3 billion in goods and services to the McDonald's system. The contract with McDonald's gives Pearson, as he says, ``an opportunity to provide a vehicle for job creation and to be a linchpin for rebirth'' in West Philadelphia. It reflects McDonald's commitment to investing in the community. Last year, the company brought new life and opportunities to our inner city by relocating one of its five divisional headquarters there. Mr. Speaker, I ask that this article on Union Packaging, published in the March 22, 2000, issue of Philadelphia Inquirer, be placed in the Record and I encourage my colleagues to read the account of this exciting new venture. [From the Philadelphia Inquirer, Mar. 22, 2000] Packed up and Rarin' To Go McDonald's has contracted with Union Packaging, a minority business, to supply cartons for its food (By Rosland Briggs-Gammon) The warehouse at Union Packaging L.L.C. is filled with empty McDonald's apple pie and chicken nugget cartons. They are some of the first of millions of fast-food cartons awaiting distribution to 2,300 McDonald's locations along the East Coast. The Yeadon company, a joint venture between two area product packaging firms, has a new three-year, $25.8 million contract to supply the paper cartons to McDonald's. It is McDonald Corp.'s first minority business enterprise contract in the Philadelphia area, and Union Packaging's first account. The two companies celebrated at an open house yesterday. Michael Pearson, president of Union Packaging, opened the plant in January at an industrial park that sits near the border of Delaware and Philadelphia Counties. The company is a joint venture between Providence Packaging Inc., owned by Pearson, and Dopaco Inc., a packaging firm in Exton. The partnership allows Union Packaging, 51 percent owned by Pearson, who is African American, to bid on corporate contracts as a minority-owned business. The partnership also allows Union Packaging to delay purchasing printing equipment until next year. In the interim, Dopaco prints and cuts the paper used to make the cartons. Dopaco also has lent the company experienced employees to help train its workers and start production. ``It is so expensive to get into business,'' said Dopaco's chairman and chief executive officer Edward Fitts. ``Dopaco has expensive equipment already so Union Packaging doesn't have to make an investment in equipment right now. That's the kind of relationship that will help minority firms.'' Such partnerships are becoming more common, said Lynda Ireland, president of the New York/New Jersey Minority Purchasing Council. Similar partnerships started in the construction industry, she said. ``It is certainly something we are trying to encourage,'' Ireland said. ``To get into the corporate-America arena, you have to be creative.'' Pearson, 38, spent three years working for a packaging firm in New York. Using his experience there, he decided to start his own [[Page 7402]] business. As the first step of his three-step plan, he launched Providence, which also sells packaging products, in 1997, using Dopaco as the outside production firm. Union Packaging, with its limited production capabilities, is his second step, he said. He launched the firm with a bid for the McDonald's contract, which was awarded to Union Packaging in December. Also last year, McDonald's moved its Northeast region headquarters to Philadelphia. ``When we brought the Northeast division here, we wanted to bring jobs to the area,'' said William Lowery Jr., a senior vice president with McDonald's Northeast division. ``This is one of the ways we can do that and give back to the community.'' To start Union Packaging, Pearson received a $200,000 opportunity grant and $300,000 in tax credits from the state of Pennsylvania for creating new jobs. The money will help finance equipment purchases. One machine that folds and glues the boxes can cost between $300,000 and $500,000, Pearson said. Dopaco ships the printed and cut paper to Union Packaging's 65,000-square-foot plant. There, employees feed the small sheets through machinery that glues one edge and creates fold marks to transform the sheets into boxes. At the end of the production line, the flattened boxes are packaged and sealed for shipment. Joe DeBernardi, plant superintendent, said the line produces about 60,000 boxes an hour. Two other machines do the same for chicken nugget containers. The company has hired 20 people and hopes to have a staff of 100 within two years, Pearson said. The company chose its site because of the worker base in West Philadelphia and its location near graphics, engineering and other service firms, and because of the expansion possibilities. Union Packaging's lease includes the option to add up to 300,000 square feet of space adjacent to its building. ``It's an opportunity to provide a vehicle for job creation and to be a linchpin for rebirth in this area,'' Pearson said. ____________________