HOUSE OF PAIN
Jointly organized with the Toronto-based financial consulting services powerhouse Ernst & Young Orenda Corporate Finance Inc., the frank and lively exchange of views and opinions served up by some of Canada’s leading packaging industry insiders—including prominent manufacturers, designers, distributors and end-users—suggests that although there is still plenty of pain for the industry to endure in the short-term, there is enough of a built-in pain threshold to at least ensure survival for those companies that wisely used the recent good times to raise their manufacturing prowess and productivity levels to truly ‘world-class’ standards.
“In the short term there is obviously going to be some more pain, consolidation and restructuring,” stated Serge De Paoli, vice-president of marketing and business development for Kirkland, Que.-based pharmaceutical and specialty packaging manufacturer Alcan Inc. “In the longer-term, the whole answer is really about sustaining competitive advantages in the markets in which we choose to participate.
“I think it’s really important that as the margin pressures keep increasing,” De Paoli explained, “there will be some new offshore entrants in some areas of manufacturing, so therefore the answer is really for Canadian operations to focus on whatever it is where they can sustain a competitive advantage—to serve the right market segments where there is a value proposition vis-a-vis the competition, be it from the U.S. or offshore.
“A lot of this depends on what we’re manufacturing, with some products obviously being more transport-sensitive than others. To use our blister-packaging products as an example, this stuff is shipped so easily that we’re basically dealing with competitors worldwide,” said De Paoli, stressing the need for larger-sized Canadian manufacturers “to have a global perspective, not just a Canadian one.”
Said De Paoli, “For a company like Alcan, which has operations on all continents, we need to have a global approach to business because we have many different competitors and customers on all of these continents, so we certainly look at places like China and India not just as competitive threats, but also as vast markets that are growing rapidly, with big opportunities for us.
“I think that ultimately the answer to Canadian manufacturers staying in business in the future really lies in expanding our horizons a bit,” De Paoli reasoned. “As for smaller manufacturing companies doing this, when I was on a Canadian trade mission to India last year, I could not believe the number of small entrepreneurial companies that were out there not just looking for business, but actually already doing business.”
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