Inside Track: Nonprofit MDI has revival underway in St. Paul

  • Article by: NEAL ST. ANTHONY , Star Tribune
  • Updated: August 11, 2012 - 8:51 PM

MDI employees Denise Pietsch, front, and Phoua Xiong working on the shrink-wrap line in St. Paul.

Photo: , Submitted photo

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A St. Paul nonprofit business that shed workers, including its big-spending CEO in 2007, has executed a revenue-and-employment turnaround.

Minnesota Diversified Industries (MDI), with plants in St. Paul, Grand Rapids and Hibbing that make plastic containers for the U.S. Postal Service and other business customers, was turned over to a restructuring firm in 2007 after laying off about 300 workers, amid a downturn in business.

The board also fired CEO Mark de Naray, who arrived in 2003 talking about dramatic growth. De Naray, who made up to $340,000 in compensation, left during the business swoon tied to lower orders from the Postal Service and after the Star Tribune reported that he took executives and spouses on a company junket to a casino.

MDI, founded in 1964, employs many disabled and disadvantaged workers who make corrugated plastic tubs, recycling bins and packaging. It also provides assembly services for business customers nationally.

Peter McDermott, a former CFO of Blandin Paper who also worked in economic development for Grand Rapids and Itasca County, was hired in 2008 by MDI's board.

McDermott said revenue has grown from $10 million in 2010 and a workforce of 120 to what should be $25 million this year and a workforce of about 425, including 250 recent hires who are transitioning from employment agencies to full-time employment. MDI jobs pay up to $9.25 an hour plus benefits after 90 days with the company.

McDermott, 61, who was paid $160,000 last year, said MDI had a surplus each of the last three years and paid down $6 million in debt since 2011.

The Postal Service, which still accounts for three-quarters of MDI's business, has increased orders of plastic tubs, after a study showed they last five times longer than cheaper cardboard tubs for sorting mail. And McDermott's sales team has added customers, such as Minnesota-based Fastenal and Andersen Windows.

"We're working hard to grow commercial-plastic sales, so we were able to mitigate some of our Postal Service dependence," McDermott said.

"We're selling through office supply catalogs and a distributor system. We just have to adjust and diversify. Our mission is to train and employ people with disabilities and help some of them move to even better jobs. MDI is living proof that individuals with disabilities are and can be productive members of the community."

NEAL ST. ANTHONY

The era of the hand-scrawled doctor's prescription is ending in Minnesota. The state now leads the nation in electronic prescriptions, according to a new survey by Surescripts, a Virginia-based company that operates the nation's largest e-prescription network.

Minnesota officials credit a 2008 state law that set a 2011 deadline for doctors, pharmacies and pharmacy benefit managers (companies that process and pay prescription drug claims) to start using a computerized system. In 2008, about 57 percent of Minnesota pharmacies were processing and filling prescriptions by computer, according to Minnesota Department of Health figures. Today 91 percent have gone digital.

Research shows that medication error rates are reduced sevenfold when clinicians use an online form to type up the prescription information.

Computerized records allow doctors to see all of the patient's medications, helping avoid dangerous drug interactions. And pharmacists don't have to read illegible scripts, which can lead to errors or time-costing clarifications with doctors. At the U.S. Department of Veterans Affairs, electronic prescriptions saved taxpayers $4.64 billion between 1997 and 2007 in reduced hospitalizations and clinic visits, according to government reports. Minnesota jumped from No. 11 on the Surescripts list to No. 1, unseating Massachusetts. State health officials say there's more work to be done. While pharmacies were early adopters, last year just 68 percent of clinics, 39 percent of hospitals and 3 percent of nursing homes were using an electronic prescription system.

Nearly $700,000 in cash will be awarded to 147 health care clinics in Minnesota for lowering costs and improving treatment for people with diabetes, vascular disease and depression.

The Minnesota Health Action Group, a nonprofit coalition of government and corporate interests, based its "Bridges to Excellence" awards on clinical data reported to the state and focused on chronic diseases that put the biggest drain on the health care system.

The group was formerly known as the Buyers Health Care Action Group. Corporate members are Best Buy, Carlson Companies, Medtronic, Target, 3M, U.S. Bank and Wells Fargo. The Minnesota Department of Human Services and the University of Minnesota also are members, as two health plans: the Southwest/West Central Service Cooperative and the State Employee Group Insurance Plan.

JACKIE CROSBY

Toro is celebrating 50 years in the irrigation business. Bloomington-based Toro is probably most recognized for its turf management products for professional and residential markets but it has been making irrigation products since 1962.

Fifty years ago this month Toro purchased a company in Riverside, Calif., called Moist O'Matic that was the foundation of the company's irrigation business.

Toro has made additional acquisitions in the irrigation business since then including: Hardie Irrigation (1996); EICON Industrial Controls (2001); R&D Engineering (2003); Rain Master (2007) and Turf Guard (2008).

The Toro Co., which got its start in 1914, has annual sales of $1.88 billion. Toro's irrigation business has grown to approximately 18 percent of the total business, or $354 million annually.

Toro owns over 225 irrigation patents and its irrigation products include sprays, nozzles, rotors, valves, controllers, sensors, software, services and more.

PATRICK KENNEDY

•The 450 employees at the Red Wing plant of Capital Safety got a nice little bump in their paycheck earlier this month.

The manufacturer of safety equipment gave each of its Red Wing employees a $2,200 bonus reflecting the company's sales and earnings growth over the last four years under the ownership of Arle Capital Partners.

"This bonus reflects the hard work, commitment and dedication our employees show every day to our customers," said CEO Stephen Oswald. Capital Safety, which was acquired by KKR in January, plans to move its London headquarters to the Twin Cities next month.

•Count the Minneapolis marketing firm Haberman as another recipient of Outdoor Magazine's "Best Places to Work" list. Haberman came in 91st out of 100 companies selected by the magazine.

Haberman joins Minneapolis ad agency Colle+McVoy on the magazine's honor roll.

DAVID PHELPS

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