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36
OPERATIONS

Coal Miner's Son

Inc. 500 CEO expands his safety equipment company abroad and changes his focus.
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Call it poetic justice. When Kenneth Vaughan was growing up in a Welsh coal-mining town, both his grandfathers died of black lung, and two of his uncles were killed in mining accidents. Today, Vaughan's Woodsboro, Md.-based Inc. 500 company has a plant some five miles from his birthplace -- making safety equipment for industrial workers.

Poetic or not, it's all coincidence, insists Vaughan, who originally came to the United States to make military radio systems. But when defense cutbacks in the mid-1970s eliminated the project he was working on, Vaughan began looking around for an industry that was growing. He eventually settled on safety equipment.

That proved a good move: Neoterik Health Technologies Inc., which Vaughan founded in 1981, grew 954% in five years, reaching sales of $1.72 million in 1986. Moreover, in 1987, revenues nearly tripled to $4.95 million. Encouraged by the company's success, Vaughan recently decided to build a European plant, and the incentives offered by the British government made his hometown too good to resist. He estimates that, through a variety of grants and tax breaks, he is receiving approximately $250,000 for locating his new plant in a depressed area in Wales.

Coincidental as all that may be, Vaughan admits his upbringing predisposed him to his current line of work. He cites "an almost inbred revulsion" to the idea of people getting injured while doing their jobs. But don't expect to see his battery-powered respirators in coal mines. No one there seems to want them. Vaughan says he once spoke with union leaders about selling his equipment to mining companies, and even they opposed the idea, fearing it might hurt their efforts to get black-lung compensation for all miners. So Vaughan has instead focused his marketing on asbestos-abatement, chemical, and industrial painting companies. "It's a weird world," he says.

-- Martha E. Mangelsdorf

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Last updated: Oct 1, 1988




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