Business Profile: ISE Metal

ISE Metal of Sherbrooke, QC is a large, yet small company.

It is always fascinating what goes on behind closed doors.

Quebec’s ISE Metal Inc. is a very interesting family-owned company. Founded in 1934 as a single factory, its name was synonymous with its function, Industrial Stamping Enterprise (ISE). The company’s main products were stamped components for the auto and appliance industries. According to ISE’s business development/sales manager, Jared Henderson, his father Robert bought the company in 1992. “He was a businessman/entrepreneur, and prior to acquiring this business he had no history with metal fabrication.”

The company was still stamping out parts for cars and appliances, but in the late 1990s those industries started to disappear from Quebec and the business had to reinvent itself.

“That is why we began laser cutting. In the mid 2000s we got our first laser cutter, a TRUMPF laser,” says Henderson. The 35-year-old joined the family firm in 2006. “I studied business and marketing at Bishops University, and when I graduated I wanted to get into the family business. I started in a sales position, and I wanted to increase the gross sales, however we were not very developed at that point as a true laser cutting company,” he says.

“We were doing mainly skate blades for Easton, CCM and Nike. We were basically making skate blades for all these companies, and the lasers were running long runs.”

But as it happens the lucrative skate blade making contracts dried up when the skate manufacturing businesses moved overseas. “The skate blades production is now done overseas except for the Bauer replacement blades. And we do packaging for them as well,” notes Henderson.

“Skate blades are a very small part of the business now. We were forced to react quickly.” They now supply parts for machinery in the food processing, agriculture and lighting industries. “The latter is interesting because we can cut very thin gauge material quickly,” he explains.

While managing change for a small company is difficult, the effort at ISE Metal Inc. was enormous because although its offices are located in a relatively modest 45,000 square foot industrial building not too far from the centre of Sherbrooke, Quebec, the setting does not convey the magnitude of the whole ISE operation.

This is a large company with nine plants. Six are located in the Sherbrooke area, there is one in Cambridge, ON, one in Piqua, OH and one in Saltillo, Mexico. Managing change of such a large and diverse company takes a great deal of work. “The transition from long runs of making skate blades to short runs has been a long process. It means getting the team coordinated and working toward a common goal,” says Henderson. “We are now light years ahead of where we were even a year or two ago. What has been crucial to achieving this progress is stronger management and leadership in the company.”

The bending machine area in ISE’s Plant 2.
PHOTO: NESTOR GULA

The bending machine area in ISE’s Plant 2. PHOTO: NESTOR GULA

The original plant in Sherbrooke is still stamping some parts for the automotive sector. “Electrolux and Bombardier are some of the customers, but there is much less work now than there used to be,” he says. The company’s headquarters is Plant 2, which houses four laser cutting systems, two brake presses and a plating line. The 30,000 square foot Plant 3 is the Lennox assembly plant for machinery used in the pulp and paper industry. It is here that they also process and package the skate blades.

The nearby town of Waterville is the home of the 15,000 square foot Plant 4 that houses an assembly shop and a conventional machine shop. Plant 5 in Sherbrooke is a machine shop with CNC machines and is about 5,000 square feet. The 50,000 square foot Plant 6 in Magog is an assembly plant.

“It assembles one of our own products, the Aquanox water slide-gates. We sell these to different communities that need to regulate water flow and water levels,” explains Henderson.

Plant 7 in Cambridge services the area west of Toronto, and it’s a laser cutting shop that also does some assembly for the forestry sector. The Mexican Plant 8 performs stamping for the auto industry, while at the Piqua location, Plant 9 is a production plant that also makes parts for the auto industry.

“It is a massive amount of management,” says Henderson. “All the plants came as a way of acquisition to add value for the customer. If you could laser cut a part and then add value with additional services such as machining and assembly, service purchasers, and serve other businesses by providing a turn-key operation.”

It seems ISE Metal is always working to expand and innovate. “The goal is to start creating end-user products and generate our own demand,” says Henderson. Besides their Aquanox business (www.iseaquanox.com) they have just recently embarked on a new venture of designing and building storage lockers that will fit in the parking spaces of condominium dwellers.

“Aquanox was released two years ago. This is the first ISE-owned product. We were approached by two people with this business opportunity,” he says. The locker idea was his. “I lived in a condo and came up with the idea because storage in a condo is always a problem. Called Consto (www.consto.ca) this unit has a price point of about $2,000 and is more cost effective and convenient than renting a storage space.”

“One of the biggest challenges in this business is filling up all your capacity and that is my job,” he says. Depending on the demand, they will run up to three shifts at their nine plants. “When we reach 100 per cent capacity we’ll buy more TRUMPF lasers,” he says with a laugh.

Henderson says that they are quite up to date on their lasers. He notes that all the lasers and brake presses are TRUMPF except for one. “We are very happy with the machines and the service,” he says. “The fiber laser allows us to cut twice as fast. If you invest in your company and as a result you are able to achieve almost double the output, it helps serve our customers. Slow production just doesn’t cut it,” he quips.

Jared Henderson in front of a
TRUMPF Laser in the 45,000 square foot Plant 2. PHOTO: NESTOR GULA

Jared Henderson in front of a TRUMPF Laser in the 45,000 square foot Plant 2. PHOTO: NESTOR GULA

He says that keeping up with the technology is important because the speed and accuracy improvements can make a big difference to the bottom line. “We have some older machines that were purchased 10 years ago, but now technology does develop so fast there is a wide gap in terms of cutting speeds that effects production in laser cutting.”

He recognizes that there is a noticeable speed difference when cutting thin gauge on the older lasers and the newer ones. “There is less of a difference when you are cutting thicker material, but there is a big difference when you are cutting very thin gauge.” He says they frequently cut 18- to 22-gauge material. They will also cut up to one inch on the lasers.

Henderson says that it takes a great deal of foresight to stay competitive. “We remain a service-oriented company. We are willing to work with our customers in achieving their goals. We develop relationships which increases customer loyalty.”

He is bullish on the robustness of the Canadian economy. “I believe that on the whole manufacturing can bounce back given the recent changes in the exchange rate, and that allows us to compete a lot more for the U.S. demand,” he says. “Foreign competition does exist, but the quality issue still exists and you don’t have the same relationships with your suppliers as you do over here.”