The decline in wood product exports (down 21.4 percent compared to year-ago levels), coupled with our rising dollar’s effect on this sectors profit margins (from 14 percent in 2004 to -0.3 percent in 2007), have prompted many manufactures to focus on the European, Japanese and Asian markets instead.
Even those manufacturers who focus solely on the domestic residential market are taking a closer look at alternate sectors in anticipation of a Canadian housing slowdown. Housing starts are expected to slow to around 210,000 units in 2008, falling back from the decade high levels of close to 230,000 seen in the last two years, says economist Pascal Gauthier, in a report written for TD Financial Group.
Despite economists warnings, many manufacturers refuse to be paralyzed by negative forecasts. Instead, ingenuity and a compulsion to succeed have propelled some Canadian wood producers to make the moves needed not only to survive during challenging economics times, but to thrive despite them.

Here, three manufacturers share their stories about the skills they’ve developed and the strategies they’ve implemented to help drive their company forward.
nstead, ingenuity and a compulsion to succeed have propelled some Canadian wood producers to make the moves needed not only to survive during challenging economics times, but to thrive despite them.
Here, three manufacturers share their stories about the skills they’ve developed and the strategies they’ve implemented to help drive their company forward.

Marketing Know-how
Dan Briggs, founder of Plaster Rock, N.B.-based Briggs Engineered Wood Products has become something of a marketing whiz after launching his unique line of Puzzle Floor hardwood flooring three years ago. Because the flooring’s tile sized, puzzle-shaped pieces are so unique, he knew a tremendous marketing effort would be required to sell the concept to architects, designers and to homeowners.

His marketing efforts began with a prototype of the product, a small booth and some literature at the 2004 International Woodworking Machinery & Furniture Supply Fair-USA (IWF) in Atlanta. Encouraged by the positive response, Briggs decided to develop a full package of literature, a sample program plus a website so people could see the product at their convenience. To assist with his promotional plans, he hired a marketing firm in Montreal, and on their recommendation hired a PR firm as well. He then launched his product at the 2005 Surfaces flooring show in Las Vegas, and received a great response.

His marketing efforts have paid off. Over the past three years, the Puzzle Floor line has received exposure in nearly 200 publications and was broadcast on HGTV’s network show, I Want That. In addition, Briggs has discussed his products on radio programs in cities across North America. “The single best response we got was from that 90 second clip on HGTV,” says Briggs. “The next morning I received 200 emails from people requesting information and wanting to talk about the product. And some eventually purchased floors.”
For a $3 million company that employs around 25 people this is an outstanding accomplishment. “You can have a great idea and bring it to fruition as far as getting a product made, but at the end of the day it has to be put in front of people in such a way that they are interested in buying it,” he says.

Briggs advises others who may be considering launching a new product to make use of online adword campaigns so you can see if there’s interest in the product before going through the investment process. He also recommends fighting the urge to cut marketing especially during slower economic times. “If anything,” he says, “you should turn it up.”
 

Strength in Numbers
How do you take your business to the next level if you’re a small shop? Two east coast wood manufacturers believe they have found a solution. 

By forming a cooperative, two companies — Centreville, Nfld.-based, New Wood Manufacturing, a mouldings, flooring and components fabricator, and Blanchard’s Cabinet Doors, located in Bishop’s Falls, Nfld. —  have found a way to cut costs, bolster their buying power and maximize their marketing efforts. Last June, New Wood and Blanchard’s teamed up with recreational watercraft manufacturer, Platinum Builders, and Superior Waterproof Coatings to form the Central Newfoundland Manufacturing Cooperative.

Although only two of the companies are wood manufacturers, all four have common goals and expenditures that can be offset by pooling their resources. Their first shared expenditure was hiring a consultant to help implement lean manufacturing, and their second was hiring a consultant to assist with export readiness.

While each of the four businesses employ fewer than 20 people, teaming up has given them the clout needed to negotiate better deals. “The big benefit is going after shipping rates, and sharing our buying power,” says Shane Noble, sales manager at New Wood Manufacturing. Other benefits include sharing fees for safety training, cheaper insurance rates and hiring a person to represent them on trade missions.

Both woodworking companies are extremely busy at the moment, and according to Noble the region is in the midst of an economic boom. Forming the co-op has also helped. “You can’t be all things to all people, but if I’m making the components for kitchens, and Blanchard’s is making the doors, then this allows us to grow both lines together.”

(Information about forming a co-op, can be found on the Canadian Co-operative Association’s website at coopscanada.coop.)
 
Diversification,
Modernization and Teamwork
Entrepreneurs are a tenacious lot who don’t fold easily under pressure, and Lac-Mégantic, Que.-based Bestar, is no exception. Over the 60 years this company has been in business it has survived the ups and downs of a changing economy as well as a series of harrowing events including a fire at a major supplier’s facility. While surviving these challenges hasn’t been easy, it has taught the company how to pull together as a team and focus on finding solutions.

So in the face of its most recent challenge — offshore competition — rather than batten the hatches and hope for the best, the company rallied its 250 employees and implemented a new game plan that saw sales increase over 30 percent in 2007. “We’re a tough little company,” says vice president of sales, Michèle Tardif who works alongside brother Martin, and father Paulin in the business. “To keep on going you have to have a strong vision about what it is you want to achieve.”

After dedicating itself to manufacturing ready to assemble (RTA) office furniture for the past several years, Bestar chose to increase sales by diversifying into component manufacturing. This allowed them to cast a wider net and gain footholds into several new markets including the residential furniture, kitchen cabinet and storage furniture sectors while maintaining their traditional market base.

“The transition into component manufacturing wasn’t that big of a challenge because we picked a sector that utilizes our key strengths, and people already know us and what we can do,” says Tardif. “We also knew there was a need for component manufacturers because in the past we’d faced the problem of sourcing them ourselves many times.”

To meet the needs of their existing and expanding customer base, the company also implemented an equipment modernization plan, investing $3.5 million in new machinery.

Although equipment modernization and diversification are key components of Bestar’s revised business plan, operations manager, Martin Tardif, is quick to point out the value of their employees. “Talking to our employees is always the first step,” he says, Michèle agrees. “We told our employees we want to stay alive, we want to stay here and we are going to be here. And they got on the boat with us and said, “Let’s go! Let’s work for it!”
 Dedication, adaptability and an undying belief that you are doing the right thing is the fuel that drives these companies through the obstacles all businesses face. As Martin says, “Staying in business is a constant challenge and takes constant reinventing. The market will always move, we just need to move faster than the market.” WW

Christine Honeyman is an Ontario-based freelance writer. She can be contacted at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it