2009 Minnesota Business Hall of Fame

How does a family-run box-making business become a nearly $500 million global firm selling health care equipment and high-tech machining tools? As Mike Fiterman, president of Liberty Diversified Industries, told a Twin Cities Business reporter three years ago: “Consider our name.”

Liberty Diversified Industries, based in New Hope, had entered a new phase of diversification when that interview took place in 2006. The company (which officially becomes Liberty Diversified International this fall), had set a goal of reaching $600 million in consolidated sales by 2010.

It’s closing in on that goal, having grown from $77 million in sales back in 1983, when Fiterman, a third- generation leader of the privately held family business, took over.

LDI began as a corrugated packaging maker. It still is one. But as Fiterman says, it’s also a “portfolio management company.”

“We are different from a venture capital company, which buys companies to sell them,” says Fiterman, an affable man who looks younger than his 61 years. “We buy them to run them.” Liberty brings to its acquisitions the needed expertise in operations and in “how to go to market,” he adds.

His grandfather, Jack Fiterman, founded Liberty Carton in 1918 to refurbish industrial burlap bags and wooden boxes for reuse. Mike worked for his father, Ben, on weekends as a teenager, back when Liberty Carton was on Third Avenue North in downtown Minneapolis. By 1970, when Mike became Liberty’s purchasing manager after graduating from the University of Minnesota, the company was in larger quarters in Golden Valley, having become a successful manufacturer of corrugated boxes and promotional packaging.

Already then, Liberty was looking toward diversification. “My dad saw that if we were just in the corrugated packaging business, we’d be like a lot of people,” Fiterman recalls. “Whereas, when we started combining substrates together”—combining paper with plastic and aluminum and wood—“we could not only provide superior solutions . . . but we could differentiate ourselves,” no longer a “commodity” business but a “solutions” business.

Among the company’s biggest sellers in the 1970s were U.S. Postal Service mail totes (which LDI still produces). It made them from corrugated paperboard, adding a plastic bottom and wire rims. Then, Fiterman recalls, “we discovered that there was this product, corrugated plastic,” that provided a sturdier substrate.

Soon Liberty was buying and building “substrate” companies to enhance its core box-making business. “We still own a large plastic extrusion company,” Fiterman says. “We do a lot of wood fabricating, we do foam fabricating and metal fabricating.” These businesses also have their own customers and products. In 1972, the Fitermans created a holding company for all their operations, Liberty Diversified Industries.