Wednesday, June 4, 2003

SARS scare boosts sales

Hand sanitizer opens Asia market

By Laura Baverman
The Cincinnati Enquirer

[IMAGE] Beverly Collins of Florence and Deborah Durstock of Covington package hand sanitizer for shipment to China at the Chester Labs plant on Section Road in Roselawn Monday morning.
| ZOOM |
A 40-foot container housing about $50,000 worth of hand sanitizer will reach Hong Kong next week. Six weeks ago, the liquid was mixed and bottled at Chester Labs Inc. in Roselawn.

While the last two months in China were plagued by SARS, those months at Chester Labs were spent filling orders for hand sanitizer to be sent overseas.

Chester Labs, a privately owned medical-product manufacturer, produces more than 200 items ranging from hand soaps and shampoos to enemas and soap dispensers. The company markets its products through national and international distribution firms, which then find buyers among hospitals, physicians, nursing homes and hotels.

For distribution in Asia, Chester employs E. Tu Associates, a small international trading company in Oakley.

Through E. Tu, the company has shipped about a total of $100,000 of sanitizer. The sanitizer has a high alcohol content of 62 percent, which makes it very effective for killing germs.

1939: Chester Eaton opened a manufacturing plant in Erlanger called Thermocor Co. and produced canned heat for soldiers to use in the field during World War II.
Mid-1940s: The demand for canned heat lessened following the war so the company manufactured and sold pottery around the country.
Late 1940s: Thermocor began to produce medical products such as lotions and enemas.
1950s: Chester's vinyl one-piece enema tube design, still used today, was patented.
Late 1960s: Chester Eaton passed away and the company was sold to Rufus B. Smith, who also owned a distributing firm, Crocker Fels.
1973: Thermocor won a contract to produce enemas solely for Armour Pharmaceutical. The same year, the company was divided into two companies. Thermocor made pottery and Chester Labs manufactured enemas.
1980: Chester Labs was incorporated and the medical line expanded to include soaps and lotions. Thermocor ceased to exist.
1986: Smith retired and sold Chester Labs and Crocker Fels to his son-in-law, John Armstrong.
1994: Chester Labs moved to its current location in Roselawn.
1998: Introduction of rinse-free peri-wash brought growth in business.
2001: The company was awarded the Novation contract, a contract for ultrasound gel with a nationwide hospital buying group. This represented its first national contract in health care.
2002: Named Manufacturer of the Year for 2001 by Abco Dealers Inc. out of 200 member companies.
There had been no interest in sanitizer in Asia prior to the outbreak, Stuart Hyde, vice president of marketing for Chester Labs, said.

"As soon as the incident with SARS happened, we got lots of calls," he said.

While the jump in sanitizer sales did not greatly affect business, Hyde said the sales helped spread the Chester Labs name throughout Asia.

Sara Kaufman, regional manager of the Hong Kong and Southeast Asian markets for E. Tu, agreed and said she expected growth in the market for dispenser refills. She has also worked to market sanitizer and other Chester products in Taiwan, Japan and Malaysia.

"We won't see the huge volume that we have seen in the last six to eight weeks," she said. "But I think that this might get their name out there a little more and get a little more business."

While Chester values its Asian market, it will rely on the American market this July when the company introduces a line of soft wipes. According to Hyde, Chester will be one of the few American companies to produce wipes; the product is usually imported from overseas.

The new line will eventually replace rinse-free peri-wash, a product often used by nursing homes for patients who are incontinent. Peri-wash brought a spike in business in 1998 when the number of cases shipped jumped from 50 to 3,000 a month.

Hyde said Chester's business has always depended on replacement of old products with new ones.

Sales of shampoo, conditioner and body wash were slow when sold separately, but when the company made an all-in-one product, sales jumped significantly.

"Even that product is going to evolve and turn into something else at some point," he said.

Since 1994, when Chester Labs moved to its current location, the company has doubled its business.

In January 2002, Chester Labs was named Manufacturer of the Year by one of the largest medical cooperatives in the country, Abco Dealers Inc. Abco distributes medical products from over 200 companies to smaller regional distributors in the United States.

The award represented 30 percent growth from 2001 to 2002 at a time when the health-care industry was growing 6.5 percent, Dave Rose, managing director of Abco Dealers, said.

"I certainly attribute their success to good products, good people and flexibility to meet the needs of health care; to adapt if you will," he said.

Employees of the company attribute the company's success to their ability to work as a team.

"We all work together. When we have an idea about something, we'll speak up and say what we think," Mary Ann Sullinger, a production worker who started at the company 39 years ago, said.

When she began at the factory in its prior Erlanger location, only six employees ran the company, and products not in stock were made to order.

Jack Armstrong, vice president of sales under his father John, the president and CEO of the company, said the company is unique because it is small and responsive. It is also resilient to the faltering economy because health care is often a priority when making spending decisions.

"Those baby boomers are moving to an age where they need a little more health care and that's driving the growth a lot," he said.

Success of the coming wipes line could mean expansion for the company, but Armstrong said the company still has room to grow in Roselawn.


SARS scare boosts sales
Pickups, SUVs drive U.S. vehicle sales in May
Fed chief likes outlook
Martha Stewart faces possible charges
PEALE: What's the Buzz?
GM improving in a difficult year, chairman says
Shares of IBM fall at news of SEC probe
Mortgage rates go even farther into basement
Tristate summary
Business digest
Morning memo