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Recession capitalized on by NorFab to negotiate an affordable expansion.

Recession capitalized on by NorFab to negotiate an affordable expansion

Hard times are here again.

For some, having struggled through the good times, surviving a recession is doubtful and the decision to close up shop is a grim reality. For others, an economic downturn is a time to rethink strategies and pursue new opportunities.

For Mel DeGagne, owner of NorFAb Building Components of Fort Frances, the latter is true.

"Our business is cyclical. Housing and commercial development are volatile markets directly influenced by the economy," he states. "We seem to ride that roller coaster of boom and bust by following the flow and taking advantage of opportunities."

An example of DeGagne's philosophy was the purchase of Precision Trusses of Thunder Bay on Oct. 1 of this year.

"The owner made a decision to sell based largely on the impending recession, and our decision to purchase was due to the fact that economic conditions allowed us to negotiate a price we could afford."

DeGagne has no plans to change or expand the Thunder Bay business. The plant, which employs three people, will help NorFab give better service to its clients that extend from Manitouwadge to the Manitoba border.

NorFab's main product is engineered truss rafters, which account for 80 per cent of sales. Manufactured prefab buildings and utility sheds make up another 10 per cent, while prefabricated house and cottage packages account for five per cent.

DeGagne expects this year's sales will exceed $1.2 million.

"Although our major sales are truss rafters for homes and commercial buildings, our other manufactured products really help us get through tough times," he says.

"When housing starts and commercial development projects are booming, we concentrate on their needs, but when the economy slows down and people decide to build a cottage, garage or even a utility shed rather than a larger project, we've got the product. It fills the gap and keeps sales up."

DeGagne opened NorFab Building Components in the spring of 1984 in a small warehouse in Emo, Ont. He operated there with two employees until the fall, when he moved to his present location at the west end of Fort Frances.

NorFab's 10,000-square-foot plant employs 20 people. The company's components are purchased by independent lumber yards and major chains such as Beaver Lumber and North American. These dealers account for 50 per cent of sales, while 40 per cent goes to private contracting firms and 10 per cent is sold direct from the warehouse.

Through a state-of-the-art component saw, NorFab can cut an average of 1,800 truss component parts per day from stock sizes of two- by two-inches up to two-by 12-inches. The two-person saw operation will handle component lengths ranging from 10 inches up to 24 feet.

DeGagne, who now divides his week between the Thunder Bay and Fort Frances manufacturing facilities, said that his recent expansion was one of two plans he was implementing to survive the recession. The second will be the unveiling of a new product next spring.
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Title Annotation:NorFab Building Components
Author:Hopper, Jim
Publication:Northern Ontario Business
Article Type:company profile
Date:Dec 1, 1990
Words:503
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