[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.

     

                          ____________________