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Big companies a welcome market, but supply firms look elsewhere.

Big companies a welcome market, but supply firms look elsewhere

The large mining and forestry operations of Northern Ontario are blessings for service and supply firms.

However, it is possible to have too much of a good thing.

If a smaller company becomes totally dependent on one or a few large customers, its economic health is no longer in its own hands. A downturn for the larger industry could be fatal for the supplier.

However, it appears Northern Ontario firms realize that potential dilemma all too well.

Even firms which are prospering along with large mining and forestry companies are keeping their eyes open for other opportunities.


Most of the work done at C&G Electrical Contracting Ltd. of Elliot Lake is in the mining sector.

However, manager Gerry Hall noted that the firm is branching out by doing transmission line work for Ontario Hydro and Great Lakes Power. It recently built a transmission line near Kapuskasing, for example.

C&G Electrical is also bidding for work on the recently announced hospital in Blind River. Hall said the company goes looking for work anywhere in Northern Ontario.

"We do what we have to do to make a living."

C&G Electrical has been in business for two decades. Hall said the company started small, by wiring houses, before moving on to apartment buildings and shopping centres.

However, it is in the mining industry that C&G Electrical has had its biggest projects so far.

Projects include work valued at $650,000 at Dension Mines in 1986, $2.5 million at the American Barrick gold mine near Kapuskasing in 1988 and $2.5 million at the gold mine in Hemlo in 1984 and `85.


J&J Machine Works in North Bay also tries to avoid being tied too closely to one industry.

"We have many clients," said Jim Hone, co-owner and president of the firm. "We're trying to stay diversified."

However, Hone pointed out that everyone deals with mining companies because it is a lucrative market. Mining companies account for 60 to 70 per cent of J&J Machine Works' business.

However, Hone said the company is trying to enter such areas as pulp and paper, even though mining will still remain its mainstay.

He realizes that dealing only with mining firms could be perilous in the event of a downturn in the sector.

"If you deal only with them, you're left holding the bag."

The company did a lot of work with the recently closed Sherman and Adams mines, along with the downscaled Rio Algom and Denison mines operations in Elliot Lake.


Ernie Weaver, president of Bristol Machine Works Limited in Sudbury, said larger customers in the mining, forestry, steel-making and construction fields are very significant for his business.

"That's our base," Weaver said.

More than half of the company's business is with major mining entities, he noted. "They've allowed us to grow to where we are."

The company currently has a broad product and service base and is using that foundation to expand its customer base.

Many manufacturing companies moving into Sudbury produce equipment for use in the mining industry all over the world, Weaver noted. "We want to be a support service to them."

Most of the firm's work is also done within a 200-mile radius of Sudbury, Weaver noted. "We're trying to expand that."

Bristol is participating in the Industrial Adjustment Service, a program jointly funded by the employment adjustment service of Employment and Immigration Canada and the Ontario Ministry of Labour.

A joint management/union committee was formed in 1988 to look at the future of the operation and a report was completed in March 1990.

In early June Bristol and its 45 employees moved to a new 30,000-square-foot location on Algonquin Road. The company, which has been in business for 25 years, had been in its former location since 1967.

The plant was replaced because new opportunities for the company to broaden its services and product line could not be taken advantage of in the old plant.


About half of Central Canada Equipment (Thunder Bay) Limited's business comes from four large forestry companies - Canadian Pacific Forest Products, Kimberley-Clark, Domtar and Abitibi-Price.

General manager Wayne Maunula explained that long-term orders from those firms allow Central Canada to stock supplies for smaller customers.

"We use them to supply products to local jobbers and farmers."

The smaller orders sell at a relatively higher price, he said, explaining that many businesses sell their products at a reduced price per unit for larger orders.

PHOTO : Workers at Bristol Machine Works Limited in Sudbury check out equipment moved in early June to the firm's new 30,000-square-foot shop.
COPYRIGHT 1990 Laurentian Business Publishing, Inc.
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Title Annotation:Manufacturing Report
Author:Bickford, Paul
Publication:Northern Ontario Business
Date:Jul 1, 1990
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