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The 80s in retrospect: the sensational six.



Despite the turbulence and uncertainty that dominated the 1980s, many Manitoba companies enjoyed outstanding growth and development during the decade. Small companies grew into large ones; large ones became larger. Six of them in particular shone brightly and if they weren't already, they are now among Manitoba's leading corporate citizens.


As the 1980s dawned, Comcheq Services was just beginning to find its niche. Growth through the '70s had been modest--"It took us the decade to set up our network of branches across Canada and establish ourselves in the computer payroll industry," says chairman Bill Loewen. "The '80s have definitely been very good to us."

Good indeed! Consider these facts: revenue in 1980 was $2.7 million; today, it approaches $24 million, a 789 per cent increase; the number of branch offices totalled just six in 1980, now there are 19, a 217 per cent rise; and employees are up from 60 ten years ago to 453 today, a 655 per cent jump.

"Ours is not an industry where companies experience massive growth from one year to the next," says Loewen. "We recognized this in 1979, so when we were planning for the '80s, a 20 to 25 per cent annual growth was our target."

Throughout the decade, Comcheq continued taking the lead by developing and introducing numerous innovations in the payroll processing field. In addition to being the first service bureau to offer cheque clearing as part of the payroll operations, other Comcheq firsts included: the Electronic Time Card, ETC Software, the Micropay System for in-house production of payrolls, "Quick-Pay" for smaller payrolls (1-30 employees), Cashex Terminals and numerous payroll deduction services.

Perhaps the riskiest venture, says Loewen, was the introduction in late 1984 of the TouchPay Bill Payment service. "This was something very new to the market, and it took a while for people to recognize its value. It is now finally beginning to take off the way we though it would."

Another significant highlight of the '80s was the company's move to its current headquarters on Garry Street in 1986. Comcheq purchased the old Freed Building, renovated it and turned it into one of Winnipeg's more outstanding heritage buildings.


When John F. Fraser assumed the presidency of Federal Industries in 1978, the company was not in the best of shape. Revenues at the end of the 1970s were a modest $113 million and earnings stood at a rather paltry $715,000.

"Our primary objective, as we began the 1980s was to stabilize the company by improving the balance sheet and embarking on a period of strategic planning," recalls Fraser.

It didn't take company executives long to decide on what course to pursue. "The recession that hit the country in 1982 made us realize that Federal's fortunes were too closely tied to the resource sector, and we recognized that our geographical and industry sector balance was not good."

Through adjustments to the long range plan, Federal began to make its presence felt in other sectors and in other regions of the country. A new, diversified and aggressive Federal Industries was born.

"Our accomplishments do not belong to the last couple of years alone," says Fraser. "The roots stretch back several years to our acquisition in 1986 of Canadian Corporate Management. At the time, there were many who thought we had paid too much for CanCorp. But, we were certain that it would make a substantial contribution in terms of balancing our essentially Western Canadian base of operations. We also believed there would be an impact on earnings and return on equity."

The returns were immediate: sales rose from $719 million in 1985 to nearly $1.2 billion in 1986 and net earnings jumped almost $10 million. But this was not the first time that long range planning paid off for Federal. "When we acquired Russellsteel in 1983, we questioned ourselves about the wisdom of moving into the steel service centre business at a time when the industry was so depressed," says Fraser. "But Russellsteel met our acquisition criteria and became a fine addition to our family."

A similar attitude was taken when the company acquired trucking giant CF Kingsway in 1988. "On the face of it, doubling our stake in the truck transportation industry seemed incongruous. Operational and regulatory problems had beset the industry, and the truck companies in our Transport Group had achieved less than spectacular returns. But, once again, we were looking three or four years down the road, and once again, we like what we see."

The phenomenally successful decade was capped off with the announcement in October that Federal Industries was taking over W.H. Smith Canada Ltd.'s chain of book and card stores in a $54 million deal that will ultimately push overall sales at Federal well in excess of $2 billion annually--a whopping 1,670 per cent growth in 10 years.


As the 1970s drew to a close, Investors Group realized that it was going to face stiff competition from the banks during the 1980s for its financial products. A decision was made, says president and CEO Arthur Mauro, to meet the banks head on, "with well-trained people selling and servicing a product line that was totally consumer oriented. We redefined our position in the market and our strategies were such that we would no longer be a product-oriented company."

This became evident as the '80s unfolded: "The constantly changing times challenged our abilities to accurately forecast and it required us to continually adapt to what was occuring," recalls Mauro. "The '80s were the most dramatically active 10-year period in the company's history."

New products and services were introduced regularly to meet challenging economic and taxation systems along with consumer needs and wants. Witness these developments: Investors' own disability insurance package along with custom-tailored term life was introduced; an expanded range of Guaranteed Investment Certificates and other related products were developed; 11 new mutual funds were launched during the decade, and each achieved growth beyond what was expected; Registered Education Savings Plans were introduced at the beginning of 1988; three new financial planning concepts came on stream, largely for retirement benefits.

The new products and services paid obvious dividends as evidenced by the statistical data on the company. In the first year of the decade, sales totalled $333 million. Current revenues stand at an impressive $1.5 billion--a 455 per cent growth during the '80s. In addition, the number of employees and representatives rose from 1,360 in 1980 to 2,550 today (an 87.5 per cent growth), and the number of financial planning centres across Canada increased from 48 in 1980 to 75 today. Company assets climbed 235 per cent to $9.7 billion and net income rose 153 per cent to $41.7 million.

Other significant achievements during the decade were the construction of the new $40-million headquarters building in 1987, which acts as the western anchor of the North Portage redevelopment project; the purchase in 1987 of a 40 per cent interest in Scholarship Consultants of North America Ltd., the leading distributor of pooled Registered Education Savings Plans; and the 1988 purchase of Bentax Limited, Canada's second largest tax preparation service company.


Palliser president Arthur DeFehr describes his furniture manufacturing company as "a comer" 10 years ago. A regional supplier at the start of the decade, Palliser was doing about $33 million in business, 85 per cent of it going to Western Canada.

"Our major objective was to break out of the mold of being a regional manufacturer only," he says. "As such, we had a very steady push outward during the decade."

Palliser was the fourth largest furniture manufacturer in Canada in 1980, but thanks to its aggressive marketing and expansion programs, it is now number one, having entered world markets with its products. Sales today top $150 million annually, an increase of 355 per cent.

Palliser's first move away from Western Canada dependence came in 1981 when it entered the United States market with the opening of a subsidiary in Fargo, North Dakota. "Our product has always been styled for major urban centres," says DeFehr. As such, the company now has agents in New York, Chicago, Los Angeles and several other large U.S. cities.

Having established itself in the lucrative American market, Palliser next turned its attention to product development. To this end, the company started a $14 million, five-year expansion program in 1986. The expansion and modernization called for setting up a separate, larger facility for the company's particleboard furniture operation which frees up space in the Vulcan Avenue plant, which in turn allows for reorganization and growth in the wood furniture division.

Now employing upward of 1,800 people (nearly a threefold increase since 1980), strategies at Palliser for the 1990s are such that "we will focus on being the best at what we do in North America, not necessarily the largest furniture manufacturer," says DeFehr.


It was a decade, says Triple E chairman Phil Ens that was both "unpredictable and exciting. The early 1980s with the high interest rates and sluggish economy had a major effect on us. Our market dropped sharply in 1982, and with just $13 million in sales, this was the only year in the company's history where we lost money."

But the economic downturn proved to be a blessing in disguise because it triggered a move toward consolidation of Triple E's operations outside Winkler. "Our RV manufacturing plants in Lethbridge and Gimli were moved to Winkler in 1982," says Ens. "We did, however, open our housing division in Lethbridge and the end result was a dramatic turnaround in sales and profits in 1983."

The company's main objective of becoming not only the largest manufacturer of Class A motor homes but the best in the industry never wavered, says Ens.

Several accomplishments and achievements highlighted the decade past: successful new models were introduced in 1985, "that blew the doors off the industry"; a move, in the same year, to Yellowknife which has since become an integral part in the company's overall growth both in RVs and in land development and home building; the van conversion plant, which opened in Guelph in 1979, was moved to Winkler in 1987; in 1988 Triple E won the most prestigious of its many awards, the Canada Gold Award for Business Excellence in recognition of outstanding cooperation between management and labor; a new division, Triple E International, was formed in early 1989 and located in Sweden. Expected to increase export sales into the 20 per cent range, the new firm was prompted by the success of Triple E's earlier distributor in Norway, Triple E Scandinavia, and by the interest and enthusiasm of the four Scandinavian representatives.

Sales in 1989 approached $70 million, three-and-a-half times that of 1980, and Ens is confident that Triple E will top the $100-million mark early in the new decade.


Ten years ago, Winpak Ltd. was a mere fledgling of a company. Less than three years old, it was having a tough time establishing itself. In fact, it had dropped about $5 million in its initial two years of operation, and the future was clouded. "Our goal for the '80s," says president Bob Lavery, "was clear. Strengthen our balance sheet so that we could go public and firm up our technology so that we could be in a position to become an industry leader."

The process took some time, but by 1983, Winpak showed a modest profit of about $1 million, a key turning point in the decade, recalls Lavery. "We got over the hump that year and we continued to improve every year thereafter, and by 1986, we were able to go public with the company. We cleaned up all our outstanding debt and became a solid force in the industry."

The following year, Winpak moved into the "big leagues" with the acquisition of Flex-On Inc. of Georgia, which immediately took annual sales from $47.5 million to $84.7 million. However, more importantly, it gave the company the much desired and much needed United States manufacturing base. "With 75 per cent of our sales in the U.S., we had been searching for an American acquisition since 1984," says Lavery.

Currently, just five companies control nearly 75 per cent of the North American flexible packaging material market, and four of them are from the United States--the other is Winpak. Their products are used to package food as well as for industrial and medical applications. Lavery expects that within five years, the industry giants will control up to 90 per cent of the market. Given that the competing products do not differ greatly, Lavery says Winpak's objective is to become the low-cost producer.

The company has already captured a 15 per cent share of the North American market and has recorded a compounded annual growth rate of 33 per cent. Lavery sees technology as the key to continued growth and development through the 1990s. To this end, the company has committed itself to a $21-million internal expansion program over the next three years.
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Title Annotation:Comcheq Services Ltd.; Federal Industries Ltd.; Investors Group Inc.; Palliser Furniture Ltd.; Triple E Canada Ltd.; Winpak Ltd.
Author:Bain, Don
Publication:Manitoba Business
Date:Jan 1, 1990
Previous Article:No. 4 Rescom Ventures Inc.
Next Article:Executive of the Year: Jack Fraser.

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