Insulation maker looks north
Atlas Roofing opens plant in Delta, B.C.
VANCOUVER — Atlanta, Georgiabased Atlas Roofing Corporation is bucking the trend by opening a manufacturing plant in Delta, B.C. But there are good reasons for foreign companies to set up shop in B.C., even if not many are doing it.
Atlas is coming for a number of reasons, most prominent among them to be closer to its customers and closer to a port to export to Asia and Alaska. Building factories closer to customers is a move many companies are making to cut down on transportation distances, minimizing delivery times and costs.
The company makes insulation sheets that are used on the exterior of commercial and residential buildings. Ninety per cent of Atlas’s business, though, is commercial, and 80 per cent of what they sell is roofing insulation.
It’s a high-quality product that meets Canada’s energy code and building standards, the company’s vice-president of commercial sales and marketing, Tom Rowe said.
As a result the company has an established market in the Lower Mainland, which they service from Denver, Colo.
By opening a plant here, the company expects it will be able to increase its business “two-fold or three-fold in a short period of time,” Rowe said.
That growth will come from new local clients as well as additional business that can be exported from the Vancouver area.
The key is being closer to the consumer so that the material can get to them faster, Rowe said. That also cuts transportation costs, which Atlas paid.
Typically a customer orders the material when he needs it, Rowe said. Until now that customer would have to wait two or three days for the product to be shipped from Denver. With a plant in Delta “we’re talking about taking an order on Wednesday and shipping it on Thursday.”
For customers who want the product as soon as they order it, “the logistics — being able to get it there so the project can move forward — become as important as the quality of the material,” Rowe said.
Atlas’s decision to open a plant in B.C. is not part of a noticeable trend, said Peter Jeffrey, division vice-president of Canadian Manufacturers & Exporters. While some companies that have gone offshore for manufacturing in the past are coming back, there are as many going in the other direction. One of the drivers is logistics, getting closer to customers
More and more companies are going to “just-in-time” operations, which means only making or ordering products as needed rather than stockpiling as carrying inventory is expensive, Jeffrey said. So rather than stockpiling product to ship out when ordered, more companies are waiting for the orders to come in before making the product.
If the supplier is in China, the customer has to build in the time it takes for the manufacturer to make that product and then ship it, which can take weeks.
“So I want someone who can deliver a part to me tomorrow or the next day, not in a month’s time,” he said.
And that means a local supplier. And for B.C. customers that may mean some companies would move here.
“But I can number just as many going the other way to get closer to the customer base over there,” Jeffrey said.
Robin Silvester, president and chief executive of Port Metro Vancouver was pleased to hear that Atlas was opening a local factory.
While Silvester is unaware of other examples of companies moving here, he said there were a number of trends that would support the idea that they might be, the main one being the strong growth in containers being exported from Vancouver-area ports.
Last year while the number of import containers remained steady, the number of loaded containers being shipped out was up 6.2 per cent.
“So in aggregate we’re seeing this trend,” Silvester said. “It’s really noteworthy to see a case like this where you see not just the trend, but the granular example, which is really positive.”
And with $9 billion having been spent on the Pacific Gateway — to improve the transportation network at, to and from the ports, that’s what Silvester would expect to see.
Port Metro Vancouver is the fourth largest port in North America and it has the infrastructure and transportation network that few other ports have and “that really create this sort of opportunity for businesses like Atlas,” he said.
The B.C. plant will be Atlas’s eighth and its second in Canada (there is one in Toronto). At full capacity, the highly automated facility will employ a maximum of 50 people and produce in excess of $50 million of product. The company expects to be producing its first sheets of insulation by late April or early May.
In 2011, B.C.’S manufacturing industry employed 160,000 people making up about seven per cent of workers in the province.