Cardboard boxes, cardboard angles, cardboard pallets or honeycomb cardboard, the range of products offered by LM Emballages has been in great demand in recent months.
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“All my customers who were already selling online before the crisis saw their sales explode”, remarks Frédéric Jean, Chairman and CEO.
This is particularly the case with clients like Cook it, a ready-to-cook company, the manufacturer of South Shore Furniture, or MAAX, a manufacturer of baths, showers and shower doors.
If in 2019, LM Packaging’s turnover was around eight million dollars, Mr. Jean estimates that this number will reach ten million in 2020. “This increase is attributed to the increase in online sales. This is where it was played out and it is still playing out. ”
An increase that started in the second half of the year. When the pandemic hit, sales were plummeting. “Anyone who was not selling online or was not recognized as an essential service stopped their operations. There really was a difference between companies that were already online and those that were not. ”
The big jump
In 2018, LM Emballages made “the big leap” by investing two million dollars for equipment that would allow them to manufacture honeycomb cardboard from A to Z, or in the industry jargon, honeycomb cardboard.
The result: a 275-foot machine that unwinds six rolls of paper at a time and thickens, glues and then cuts. Each roll weighs 2.5 tonnes and comes from the Kruger plant in Trois-Rivières.
“Honeycomb cardboard fills spaces in furniture and inside boxes to protect goods and prevent parts from moving. As for ready-to-eat, the honeycomb cardboard inside the box has insulating properties, ”explains the CEO.
Previously, LM Emballages bought the honeycomb panels, folded them and cut them. But when their sales became too high, the Saint-François plant acquired this impressive equipment to be more flexible in their offers.
Made from 100% recycled materials and fully recyclable, honeycomb cardboard was therefore “a product of the future”. Because the alternative to honeycomb cardboard is styrofoam. A non-recyclable material that sorting centers do not want, he says. “We knew that with the new generation, styrofoam would be frowned upon. While to manufacture our packaging, we do not cut any trees, ”he says.
The company, founded in 1992, now relies on cellular cardboard for its growth. And also to stand out against its competitors. Because of the suppliers of standard cardboard packaging, there are several on the market, but much less for honeycomb. “It’s our flagship product. This is what we are working on and pushing for sales. We have good growth and it is thanks to this product. ”
According to the CEO, this product has already opened the doors to them in the Maritimes and Western Canada market.
Eyeing the United States
While LM Packaging’s sales are primarily Canadian, the company recently began door-to-door sales in New York State and New England to solicit new customers.
“We already have customers in the United States, but the proportion remains very marginal compared to our turnover. ”
Within two years, the CEO hopes to achieve half of his sales in the United States, and the other half in Canada. A “realistic” perspective according to him. “American businesses are much bigger than Canadian businesses, but they have the same needs. ”
Despite the greater number of cardboard packaging suppliers in Uncle Sam’s country, Mr. Jean relies on his high-performance, state-of-the-art, automated equipment with impressive speed of execution. “I think we can be competitive even in a market that is already well served. ”
In the past, LM Emballages’ main customer was for a long time the furniture manufacturer Morigeau, located in Saint-François. A company that had been founded by four brothers and sisters, including Frédéric Jean’s father.
At the request of their parents, the eight siblings created Emballages LM to help Meubles Morigeau source cardboard boxes for deliveries to their retailers.
“We were trained so that one day we could take over the furniture factory, which never happened, because it closed in 2008 because of the economic crisis,” adds the CEO.
But one thing led to another, the offspring were able to find new customers. “Even though Meuble Morigeau is no longer there, we are riding our bump very well. ”
The former factory of the company is now occupied by LM Emballages operations. Due to its growth, LM Emballages now owns a second factory in Saint-François, across the street.
From business to politics
Frédéric Jean has not only been CEO of LM Emballages, but also mayor of the village of Saint-François-de-la-Rivière-du-Sud for three years already. “I had given myself that challenge. Because managing a municipality is not the same as managing a business. But I managed to bring my color. ”
Very involved in his community, the latter was recently elected economic personality of the year 2020 by the Chamber of Commerce of Montmagny. “I am a native of Saint-François, I live there, and I intend to die there. ”
Very aware of what is going on in his region and in his municipality of 1,650 inhabitants, the mayor notes that COVID has not affected this farming community too much. The biggest challenge, both for his company and for the municipality: the shortage of labor. The three manufacturing companies of the village together, namely LM Emballages, the tool maker Garant and Products Metallic Roy, have 50 positions to fill as day laborers, foremen, in marketing… but very few candidates.
“What will make me decide to set up a factory elsewhere is the workforce,” says Mr. Jean. LM Emballages is currently looking for ten employees, but recruitment remains difficult. “Our worst competition is the Canadian Emergency Benefit [PCU] », He believes. The latter adds that they have tried to recruit from abroad, but the deadlines to bring in these workers take a little over a year. “A year in the manufacturing sector is huge. ”
“If there had not been the shortage of manpower, we would have been able to produce more and achieve greater turnover,” said the CEO.
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