If it were up to Charles Dutil, second-generation CEO of Canadian trailer manufacturing icon, Manac, the captivating story of the company’s initial public offering in 2013 and subsequent delisting in late 2015 will go down as a mere sidenote in the company’s long and proud history.
Back then, the Québéc-based OEM raised some $40 million in gross proceeds before alleged interest by foreign buyers raised concerns about the longevity of the company’s local manufacturing base – in turn prompting the founding Dutil family to summon a group of investors and reprivatise the organisation.
While the French-Canadian Chief Executive, who helmed the business both under private and public ownership, is still humbled by the success of the family’s equally bold and patriotic move, he says what’s truly important are neither equity ownership nor personal sentiment. Instead, it’s Manac’s long-standing value proposition to “represent Canadian manufacturing excellence in an industry far dominated by American corporations,” as he puts it. “That’s our legacy, not some short-lived IPO.”
Founded by Charles’s father, Marcel Dutil, Manac is best known for specialist trailers such as forestry equipment and flatbeds, and has established itself as one of the largest niche manufacturers in North America – a “big fish in a series of small ponds,” as it was once called on the trading floor in Toronto.
“We compete on all fronts – both with the largest players on vans and standard flatbeds and with the micro manufacturers in the niche segments – but the high-margin areas certainly form the foundation everything else is built-upon,” Dutil explains. “Since we took the company off the stock exchange, strengthening that foundation has been our first priority.”
But that’s not all that happened since the Dutil family took charge again. Behind the scenes, Manac proactively scouted the market for investment opportunities that would add to the group’s overall innovation base – both to add scale and to disrupt hitherto untapped markets.
In 2017, the company acquired a minority stake in Canada’s ABS Remorques, for example, a leading name in conveyor-style trailers that has the potential to give the company’s forestry division a distinct edge, Dutil reveals. But that’s not all. “Like with every technology, what’s really interesting is not necessarily what you’ve already accomplished, but where you can take it – and I believe ABS still has a lot of potential in that regard.”
In August 2018, Manac continued with the acquisition of Alutrec, a fellow niche OEM specialising in the design and manufacture of aluminium semi-trailers. Again, Dutil sensed a classic “one plus one equals three” scenario, where enabling technology exchange is the true Return of Investment. “The combination of Alutrec’s technical expertise in the aluminium flatbed market and Manac’s dominant position in the transport equipment industry has enormous potential,” he says. “We have well and truly arrived in the age of lightweight materials – even in an industry as conservative as trucking – so it’s a timely move.”
Having an “edge” in the aluminium space could not only prove beneficial in the flatbed market, he adds, but across multiple segments. “The Manac brand has and will always be known for pushing the envelope on the innovation front,” he says. “By adding these nimble, highly innovative names to our portfolio, we believe we not only strengthen our standing in the specialty equipment market, but also invest in a more complex knowledge base; a breeding ground for what’s to come down the line.”
In an exclusive Global Trailer interview, the ambitious CEO not only reveals what such a future could look like, but also reflects on the company’s historic homecoming and what it taught him about life, leadership – and letting go.
Q: When we last spoke in late 2015, Manac had just been delisted from the Toronto stock exchange and re-privatised under leadership of the founding Dutil family. Do you often think back to that milestone moment?
A: No, I don’t. There is simply no time, and arguably also no point in thinking about past events. Our mission statement is to provide customer-specific tailer solutions,and we do this in an industry far dominated by American businesses. We feel it is important for Canadian manufacturing to have a local equipment supplier able to meet their specific needs. So despite the ownership transactions, we remained the same company focused on the same long-term clients – Canadian mid- and small-size carriers throughout North America. That’s our true legacy, not some short-lived IPO. Sometimes you need to let these things go.
Q: Still, are there any key lessons learned during that time that still serve you well today? Is there anything you would do differently?
A: Lessons are learned every day. So yes, we did learn a few during that period – most of them positive. As for what would we do differently, we would most likely not take the company public in the first place.
Q: Speaking of going public – it’s annual report season in North America, and early signs indicate 2018 was as an exceptionally good year for the local trailer manufacturing market. According to industry sources, the top 25 manufacturers saw a collective production plus of more than 15 per cent. How did Manac fare during that time?
A: Like many manufacturers in our region, 2018 was a record-breaking year for Manac, too. Every plant and product segment saw solid improvements when compared to 2017.
Q: Which product lines performed best – and why?
A: I wouldn’t isolate one product line. With a solid economy and favourable level in the US/Canada exchange rate, 2018 was just an overall good year for us. Due to a solid backlog, that will likely also be the case in 2019 as well, but growth will not be as sharp this year.
Q: With that in mind, were there any unexpected developments on the production level? In our last interview in 2015, you started to notice bottlenecks in material availability and cost, as well as labour – have these issues since materialised?
A: Yes, but these are on-going challenges and they are not limited to our sector of the economy. The labour challenges are more pronounced in eastern Canada, but we find ways to compensate. We now have over 70 of our employees in our main plant that are from Central America.
Q: Trailer manufacturing has historically been a distinctly cyclic industry and loosely followed GDP growth. With US media now reporting a fourth consecutive year of production figures north of 300,000 units, would you say it might be time to announce the end of that era?
A: No. I think it would be a mistake for someone to think trailer manufacturing is less cyclical than before. The last downturn was much deeper, and this positive cycle is certainly longer. If we do not see a slowdown in the next 24 months, I might change my opinion, not before that.
Q: Do you think Manac is well placed to weather a downturn? Back in our 2015 interview, you specifically mentioned that going private would allow you to manage economic volatility more easily…
A: I think we are. We have solid shareholders with a long-term view and loyal business partners. Going through a severe downturn is never easy and hard decisions need to be taken. Doing this with a long-term view is indeed somewhat easier.
Q: Especially in an evolving marketplace, where rising output from Mexican OEMs or those with manufacturing facilities in Mexico is shaking up traditional dynamics. How does Manac experience this development?
A: It affects every manufacturer, directly or indirectly. I think when tariffs are imposed on key components like steel and aluminium while no tariffs are imposed on trailers, it is a side effect that could be expected – but we are looking at ways to minimise this.
Q: And that is only the beginning. There were several attempts from European and Asian companies to push into the North American market recently, some also in categories you serve, such as heavy haulage. Did that make an impact on you at all?
A: From units made overseas and sold here, no, we do not see this. From Asian companies shipping parts and assemblies here, or to Mexico for final assembly, yes, there is a noticeable impact.
Q: Beyond that “geopolitical” dimension, which technology trends do you think will shape the industry in the years to come – and where does Manac see potential to continue innovating?
A: Every year the speed of change increases, every year it affects our products. Our R&D team does a good job of staying ahead of the curve. Connectivity and data management to improve unit efficiencies are the main trends in our view.
Q: And from a volume perspective? In which industry segments do you see the most potential for growth for the years to come?
A: Our product offering is most likely the widest in North America, so our plate is full as is. That also means our focus will remain firmly on North America – we have no plans to directly cover other regions at this point.
Q: Does that mean we won’t see a Manac truck body any time soon? After all, the so-called ‘final mile’ market is gaining massive momentum all around the world. Does it fit into the portfolio at all?
A: As I said, our portfolio is incredibly broad, so you might be surprised – there are many things we do that we do not share with the media. We actually delivered to the truck body segment in 2018, and many other, similar projects are in process as we speak.
Q: Final question – let’s fast forward to 2026 for a moment: Where do you see Manac in the North American OEM ranking when you celebrate the brand’s 50th anniversary?
A: Our goal is to be the partner of choice to our clients. We do not aim to be the number two or three in any volume-based ranking. What we want is to be number one in the “who is your trailer manufacturer of choice” ranking.