Made in Canada: Innovative manufacturer takes on the world│BDC.ca
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A new kind of manufacturer takes on the world

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Young So

Many supermarkets have more than 40,000 items on their shelves, each vying for shoppers’ attention and dollars. The competition is such that 90% of all new food products in the U.S. will fail in the first year, according to Nielsen.

So it’s important for food packaging to entice consumers with vibrant, inviting images. It also has to keep what’s inside the package safe and tasty through rigorous distribution processes and a lengthy shelf life.

To do the job, today’s packaging requires a sophisticated mix of design, chemistry and printing to meet the exacting demands of food companies.

A big R&D effort

That’s why Flair Flexible Packaging employs seven professional packaging engineers and has spent more than $1.5 million on a R&D laboratory at its Calgary plant. Last year, Flair sold more than 15,000 tonnes of flexible packaging—bags and pouches—to food companies, including such giants as Hershey’s, Smucker Foods and Jack Links.

“We are essentially an engineering firm,” says Young So, President of Flair Flexible Packaging. “We offer global packaging technology to customers in North America and South America.”

So, who emigrated from South Korea with his family when he was 13, began Flair in his Calgary home in 1992 with just one employee, importing film and bags for food packaging from South Korea.

Rapid growth in sales and employment

By 2012, sales had hit $80 million, double their 2008 level. Flair now employs 150, including 90 in Calgary. Two years ago, the company opened a new manufacturing plant in Houston, Texas, to supply its growing business in Latin America. It also has distribution centres in Wisconsin and Washington state, as well as an operation in South Korea responsible for quality control for products made for Flair.

Flair, a client of BDC Financing, is an outstanding example of a new breed of Canadian manufacturers—companies that are linked to global supply chains and able to compete in international markets based on their innovative products.

Bright perspectives ahead

BDC Chief Economist Pierre Cléroux says Canadian manufacturing is far from a sunset sector. He has identified four trends in the world economy that are creating new opportunities for Canadian manufacturers.

1. Global value chains

Companies are buying components from around the world. “Even in China, 40% of their inputs are coming from outside China,” Cléroux notes.

2. A new middle class

Economic growth in developing countries is creating a new middle class that will be 1 billion strong by 2030.

3. More technology

Manufacturers are using more technology and automation to improve processes and products.

4. A narrowing cost gap

Costs are on the rise in China and other developing countries. This trend, combined with more efficient Canadian factories, means it’s more attractive to keep production at home.

In Calgary, Flair is positioned to benefit from these trends. It designs packaging for clients all the way from plastic composition to graphics. It then sends the specifications to South Korea, where suppliers are equipped to produce sophisticated plastic film and apply high-quality images with rotogravure presses.

Components from around the world

Flair brings the film to North America, where it cuts and forms it into various styles of bags, finishing them with zip locks from the U.S., valves from Switzerland and other attachments from Europe.

Flair it’s now moving into branded packaging, starting with a product called Titanium that’s ideal for large rice bags. The company also plans to begin producing its own proprietary film for its branded products in the near future.

So also wants to expand further into South America. “I’m a believer that if the concept and the platform are strong, the dollars will follow,” he says. “I’m interested in building a ship that can sail through any kind of storm. For me that’s the fun, the sense of accomplishment.”

How Canadian manufacturers can compete globally

Join global value chains

Seek to supply multinational corporations—not only in North America but also on other continents.

Produce more value

Move from being a maker of parts to being an integrator. Instead of selling a product, sell a system including advice, design, installation and maintenance.

Explore more markets

Future growth opportunities for many manufacturers will lie in developing countries in Asia, Latin America and elsewhere.

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