Fabricators take control

(From left) Travis Maksimovic, his father Zoran Maksimovic, and brother-inlaw Andrew Tieu have settled into their Ottawa location and have recently decided to expand both in size and capability. Maksimovic said the next step is to add more employees. Photo courtesy of Maks Fabrication.

Fabricating metal products is a booming business in Canada. According to a Canadian Industry Statistics 2016 Summary by Innovation, Science and Economic Development Canada (ISED), approximately 12,670 business are engaged in forging, stamping, forming, turning, and joining processes to produce ferrous and non-ferrous metal products. Of those 12,670, 96.2 per cent of businesses have fewer than 100 employees.

According to Statistics Canada, Yukon had a 72 per cent GDP growth in the fabricating metals products sector from 2015 to 2016, followed by PEI, which had a 6 per cent GDP growth. Newfoundland and Labrador’s GDP decreased 46 per cent in this sector, followed by Alberta that had a 21 per cent decrease. All remaining provinces and territories remained relatively steady.

Over the past year many fabricating shops have faced both periods of growth and suffered industry challenges. Here are some insights from fabricating job shops across Canada.

Canadian Fabricating & Welding: How has the fabricating and manufacturing industry been for you over the past six months?

Jason Fleming, director, BGM Metalworks Inc., Kingston, Ont.: We do not have a standard product, so we are a true job shop and offer versatility across a wide range of markets and skill sets. We provide support to Fortune 500 companies (local and out of country) as well as smaller local companies.

The last six months have been extremely busy for us. There have been a lot of major projects in our area, as well as shipping to the United States and overseas more and more. For the most part, manufacturing plants in Ontario have been busy and are investing in new processes and equipment. The local construction industry has had quite a few large projects on the go, which we provide support for as well.

Justin Copp, vice-president, Brunswick Steel, Winnipeg: We are a general-line steel service centre primarily focused on carbon products. We have seen a steady decline in HR sheet and HSS since the start of the year. The carbon bar stock and plate have been more stable, but recently the mills are also adjusting to demand and competitive pressures in these product groups.

Our Manitoba market is experiencing a slowdown, which seems to mostly be driven by a softening in agriculture equipment manufacturing. This is a really tough business. It’s very competitive and our customers have high expectations. We try to differentiate ourselves based on service, and we are working on an internal initiative to further reduce production lead times.

Travis Maksimovic, owner, Maks Fabrication, Ottawa: We are now located in Ottawa, but prior to our move, we were located in Brockville, Ont. This was a great location for us as it offered easy access to Montreal and Toronto, as well as Ottawa. However, over recent years industry began leaving the Brockville area. A lot of our big customers were located in Ottawa, so it seemed like a good fit for us.

We offer both CNC machining and fabricating and welding, whereas most shops in the Ottawa area focus on one or the other, so we have complete control of our manufacturing process and do it all in-house. This has made it easier for us to take on projects and work these past few months. Ottawa also offers a lot of access to customers in robotics, aerospace, military, automotive, construction, medical, and custom work for the city of Ottawa. So it’s been pretty busy for us.

BGM Metalworks owners Tyler Krawaitis and Jason Fleming have had a busy year and have invested in bringing their two locations together by building a new manufacturing facility that will house both segments with over 25,000 sq. ft. of floor space. Photo courtesy of BGM Metalworks.

Chad Link, owner, Titan Stainless, Regina: We are a CWB-certified custom metal manufacturing shop that works in all different types of metals. Currently we have eight employees and a 10,000-sq.-ft. facility. We supply mostly to commercial and industrial industries. We focus on prototyping fixtures and doing custom, one-off work.

We recently added a new fibre laser that has allowed us to turn around jigs and fixtures efficiently and quickly without needing to subcontract out our laser cutting. This has been a huge addition for us and our customers. We have spent the last year focusing on keeping all aspects of our work in-house. From AutoCAD services, design, material selection, and prototypes to laser, forming, welding, and assembly, we have been able to provide a service that not many other shops in this province can do. So it’s been rather busy.

CFW: What are some of the successes and challenges you’ve faced in this past year?

Fleming: We are currently working out of two locations with over 15,000 sq. ft. in total workspace. However, we recently decided to combine both our machining and fabricating divisions under one roof. We are currently in the process of building a new manufacturing facility that will house both segments with over 25,000 sq. ft. of floor space. We are expecting to move into this new facility in the first quarter of 2020. We have had a lot of focus on our new facility while trying to minimize the impact on production and day-to-day operation.

Copp: Over the last 12 to 18 months, we have made substantial investments in production and IT. Another one of our successes is that we’ve totally redesigned our shop floor, added a new fiber laser, and implemented a new ERP software, which has been a significant improvement.

Maksimovic: Our current facility is roughly 3,000 sq. ft. However, we’ve actually just signed on for an additional 1,800 sq. ft. located right next to our current location. So overall, we will have just under 5,000 sq. ft. of shop floor space. We will be moving our fabricating, grinding, and welding to our new facility, which will help streamline our processes and make our work flow more efficient.

Another big success for us has been our work with engineering firms, and even with the city of Ottawa. These customers have come to us with a project in mind, and with our engineering background, we are able to design and produce a product or develop a project that is better than the original concept. A lot of our focus has gone into the robotics and military side of things, particularly as these industries ramp up. But also because our specific skill set and situations have made these industries and the projects they are looking for an ideal fit for us.

One of the big challenges we’ve encountered is dealing with products coming out of China. Some customers have reached out to us with a product they have seen online and are looking to replicate it at a cheaper price. That’s not usually the case, though. We’ve really spent a great deal of the last year tempering customer expectations when it comes to competing with China.

Link: We look at success as our ability to help clients meet their own goals. We’ve recently noticed a bit of a slowdown. However, clients are really being pushed to complete projects even faster and cheaper than ever before. We have really cut down our turnaround times, making our processes faster and more efficient. I believe this is because of new technology we’ve integrated on the shop floor.

Some of the challenges we’ve noticed have been that we have had to contend with very competitive pricing and extremely tight deadlines. But we have been able to mitigate this through investment in new equipment.

Justin Copp, vice president, Brunswick Steel, says that being a general-line steel service centre can be a challenge in Manitoba, especially with the slowdown in the agriculture market affecting business. Photo courtesy of Brunswick Steel.

CFW: How has the tariff situation affected business?

Fleming: The tariffs really affected the availability of material and caused significant price fluctuation. Suppliers were hesitant to hold as much stock, and material pricing changed daily. We have seen a little stability recently and hopefully it stays that way.

Copp: More than anything the tariffs forced temporary changes to where we buy our steel. With less competition, prices were pushed up from domestic mills. In some product lines we saw a sharp rise in offshore products that weren’t traditionally cost-competitive in the prairies.

Maksimovic: The tariffs on material have certainly been a roller coaster ride. It has made quoting much more difficult, and we had to adjust in order to deal with the increase in price for materials. This forced us to shop the material market more. We weren’t able to rely solely on our existing suppliers. We were constantly looking for the best rates to give our customers the best deal we could. We support local and focus on shopping locally. But with an increase of 30 to 35 per cent over a six-month duration, it was hard to tell that to customers. However, we were pleasantly surprised that most of our customers didn’t bat an eye and totally understood the situations.

There still seems to be some fluctuation here and there, but for the most part it has steadied and customers are happy.

Link: In most aspects, the tariffs have not affected us, and their removal won’t make any difference to our day-to-day business.

CFW: What do the next six months look like for your company?

Fleming: The next six months will be extremely busy for us. Like I previously mentioned, our new facility will be finished in early 2020, and the move will need to be planned very well with overlap between all three locations to not affect timelines and customer needs.

Copp: For us, the remainder of the year will be focused on internal improvements and efficiencies as we try to realize the investments made over the past year and a half.

Maksimovic: We are in a period of growth and expansion. We expect that the remainder of the year will be busy for us, whether that’s with work from the new LRT transportation system being implemented in Ottawa or custom fab work for monster trucks. The custom work has really enabled us to broaden our horizons and shop floor capabilities. In order to compete, we expect to add new skilled workers to the shop floor as well as run new machines, especially with the addition of our new floor space.

We’ve really grown from a tiny shop with limited equipment to a good-sized, two-building shop, and we think we will continue to expand in the future.

Link: We are looking to expand our business and our services, so we are very excited for this next year.

Associate Editor Lindsay Luminoso can be reached at lluminoso@canadianfabweld.com

BGM Metalworks Inc., www.bgmmetalworks.com

Brunswick Steel, www.brunswicksteel.com

Maks Fabrication, www.maksfabrication.ca

Titan Stainless, www.titanstainlessltd.ca