The History of Blue Diamond

BLUE DIAMOND

Blue Diamond Industries, headquartered in Lexington, Kentucky, is a privately owned company, organized as an LLC by its shareholders in 2004. The company produces high density polyethylene (HDPE) conduit and corrugated drainage pipe at three manufacturing plants and currently employs approximately one hundred people.

THE HISTORY

Blue Diamond is well-known in the regional plastic pipe industry. In 1965, Roy Frost founded “Blue Diamond Plastics, Inc.” in his hometown of Middlesboro, Kentucky. Soon thereafter, Frost started the very successful Frost Plastics Company in Pell City, Alabama. Meanwhile, he and his brother, David, operated Blue Diamond as a separate entity until 1997. That year in an asset transaction, Moore Diversified Products of Lexington, Kentucky, acquired the Blue Diamond Plastics Company. Moore Diversified was then a manufacturing company focused on products used in telecommunications; primarily metal enclosures that were often sold to customers in the cable television industry.

Moore Diversified’s sales grew to nearly $70 million by 2000. Much of that growth resulted from the purchase of Blue Diamond Plastics. Soon after, the market declined sharply as the ‘internet bubble’ burst. Moore’s sales declined about 40%. As was often the case in the aftermath of the telecom market crash, investors chose to cut their substantial losses. Key employees at Moore, however, purchased some of the ‘Blue Diamond’ assets, primarily the Middlesboro, Kentucky pipe manufacturing plant. In a very smooth transition, Blue Diamond Industries, LLC was formed and the plant began operating again on April 28, 2004.

Subsequently, end use markets for company products have slowly returned to a more normal pattern. Supported by pipe industry production statistics, recent industry analysis and newspaper articles suggest ‘the glut’ of network infrastructure has been consumed. On March 3, 2006, Blue Diamond Industries’ owners closed on the purchase of Plastic Tubing Incorporated (PTI). Now contributing profitable volume to the company, PTI has been smoothly integrated into Blue Diamond Industries. The corrugated pipe product line also has the strategic benefit of market diversification. The corrugated polyethylene pipe products are used in a wide variety of applications related to the general construction industry. The leading manufacturer in this product category (HDPE for drainage applications) had 2005 sales of $1.0 Billion.

THE FUTURE

The companies’ three manufacturing facilities are conveniently located in the active southeastern United States. The BDI management team believes that further expansion opportunities in either or both product lines are possible.The current management at Blue Diamond has never lost focus on its customers nor on its fundamental management principals. The roller coaster of events has been good training for all.

Blue Diamond is “customer friendly and easy to do business with” and we strive to maintain our reputation for loyalty and integrity with our customers.

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