Seeing an opportunity to create packaging for the emerging fast-food industry, Huntsman left Dolco in 1970 to form the Huntsman Container Corporation with his brother, Alonzo Blaine Jr. (1936–2012), and others in Fullerton, California. Plants were constructed in Fullerton, California, in 1971 and in Troy, Ohio, in 1972. Since cash flow was an issue for the new company, Huntsman mortgaged his house and borrowed heavily from banks. In 1973 the company nearly collapsed when an Arab oil embargo cut off supplies of polystyrene, used to make expandable/expanded polystyrene (or EPS).
While the Huntsman Container Corporation's first packaging plant was being built in 1970, Huntsman joined the Nixon Administration as Associate Administrator of the Department of Health, Education and Welfare and later served as Special Assistant and Staff Secretary to President Nixon. Upon completion of the second Huntsman Container site in Troy, Ohio, in 1972, Huntsman left the White House staff to become President and CEO of Huntsman Container, while still serving – in a non-paid position – as a consultant to the Office of the President.