For many a Canadian, Wednesday, the 7th of October 2015, would have been just another brittle autumn day. For a select few, however, it went down in history as the day a local manufacturing dynasty regained control of a national icon.
Formally, what happened on the day was merely worth a side note – a Québécois trailer manufacturing company called Manac Inc. stopped trading on the Toronto Stock Exchange, a move not all too uncommon in the broking business. Behind the scenes, however, a deal came to fruition that would give Canada’s entire manufacturing sector a much-needed boost: After a total of two years as a public business, Manac was delisted and reprivatised under leadership of the founding Dutil family.
If you ask Charles Dutil, who helmed the business as Chief Executive both under private and public ownership, what drove his family to orchestrate the move, the response is therefore much more emotional than a simple equity deal would give reason to expect.
Although he doesn’t forget to point out just how rewarding the company’s short time in the public sphere has been for all involved, he can’t help framing the deal as an act of localism, driven by the wish to continue a proud family tradition. “I have to say there was a degree of personal attachment involved in the decision,” he admits freely. “My father Marcel founded Manac in 1966 and it has since played a pivotal role in our lives, so I feel a very deep and personal bond with the company and the brand.
“Even more importantly, though, I understand the harsh reality of our local manufacturing base and that certain nervousness that we have as a province about losing control over homegrown manufacturing operations like Manac, so I felt there was a need to secure the company’s long-term future here in Québec.”
In that sense, Dutil says bringing the brand back home wasn’t just a question of restoring family pride or saving the Dutil legacy. “I think the Manac name has become much larger than that,” he says. “It’s a symbol for Canadian manufacturing excellence in an industry far dominated by American-based companies, especially since the Global Financial Crisis brought down so many local businesses.”
It’s Dutil’s passion for trailer manufacturing and commitment to the Québec region that drove investors like the Fonds de Solidarité to back him on his quest to ‘reclaim’ the family business, says Executive Vice-President of Investments, Normand Chouinard. “Manac is considered a jewel in the manufacturing sector [so] we showed interest in the transaction with the goal of bringing back the ownership into the Québec family [and] keep manufacturing jobs in the province.”
To Dutil, who reinvested his shares in the transaction and remained at the helm of Manac after the October transaction, the company is now perfectly placed to continue building on his father’s legacy. In fact, he says given the rising competitive pressure in North America, the timing was ideal. “Long-term, the history of other publicly traded trailer companies shows that economic slowdowns can be very challenging periods in regards to the expectations of outside investors,” he says. “Managing through these periods as a private company should prove to be easier and enable the company to act faster on potential opportunities.”
Despite that newfound flexibility, Dutil says consistency will be key to successfully leading the company through the transition period, with stabilising the business at a sustainable growth rate his first priority. “For now, the plan is to cement our position as the largest manufacturer in the smaller segments of the industry. We compete on all fronts – with the largest players in vans and standard flatbeds and with the micro manufacturers in the niche segments – so we need to get the higher margin areas right first to create a stable base.”
With four manufacturing bases and a range of sub-brands that joined the Manac stable via acquisition (see breakout box), Dutil says experience is the key competitive advantage his company has over the competition from the US. But being Canadian may also prove helpful, he adds: “Canadian weight regulations are different to the US. We have higher payloads here, so the equipment has to be more durable. Our designs reflect that difference – we have a better understanding of the realities of harder road conditions and heavier loads, so our units are more rugged and reliable.”
In line with this ‘stability first’ mantra, Dutil is quick to point out the company’s new ownership situation and resulting ambitiousness won’t change anything for the consumer, though. “While we see plenty of room to grow in North America and look forward to taking on that challenge, the most important message to take away from the privatisation is that nothing will change for our North American customer base.”
If anything, he says there will be even more dedication to the product now that the Dutil family is driving the Manac strategy again. “To truly understand where we stand today, you need to go back all the way to 1966 when we first began building transport equipment,” he elaborates.
“Manac was always a business that combined entrepreneurship with a healthy dose of down-to-earthness. It started off in in a barn behind my father’s house and only managed to manufacture 11 units in the first year and we have now sustained growth for 50 years.
“My father’s first acquisition came as early as 1972, when he used Manac to buy Canam Steel, a company founded by his parents. It was very gutsy move at the time and I guess that attitude has remained the same since then.”
In the decades following, Dutil says the company set up plants in Ontario and Missouri before acquiring British Columbia-based Peerless for $14.75 million (€13.9 million) in 2014. With so much brand equity underpinning the umbrella corporation, he says Manac’s growth potential remains very strong – especially in the US, where it is now the seventh best-selling brand after Wisconsin’s Stoughton brand.
“With the size and scope of the US market, it’s clear that our growth over the next cycle will come more from the US side of the border, there’s no doubt there,” he says. “I believe the last two years have taught us a lot in that respect. By going public we’ve managed to raise the capital needed to strengthen the brand and future-proof it, and by taking it private again we have ensured the proud Canadian manufacturing tradition will continue into the future.
That’s why I’m convinced we are very well placed to play an important role in both niche markets and those areas of mainstream trailer building where larger companies are not nimble enough to react.”
According to Dutil, the vision for the company is to develop enough momentum to justify opening a fifth facility over the next ten years or so, and maybe even a sixth depending on demand. With production estimated to jump 13 per cent from 2014 to 8,500 units in 2015, the company is currently on a good way to make his vision a reality – potentially marking another historic moment in Manac’s proud 50-year history.
“The 7th of October certainly was an important day for us, but also quite tense for everyone involved. With our family now in a strong position and supported by solid partners. I hope we will be able to make our employees and the province of Québéc proud and continue growing the share of Canadian-manufactured trailers in North America.
“I admire the ability of some families to stay in business for close to or more than 100 years, and I believe we have the same potential. After all, we are already half way there.”