Canadian Plastics

IPL management shake-ups part of broad restructuring plan (March 28, 2006)

Canadian Plastics   

Canadian Plastics

IPL Inc. has lost another member of its senior management team the third in the past six months however, it was...

IPL Inc. has lost another member of its senior management team the third in the past six months however, it was necessary for the firm to realize its long-term objectives, the company’s president and chief executive office, Serge Bragdon, said.
Saint-Damien, Que.-based IPL announced the departure of Frederic Cote, the firm’s vice-president of finance and administration, and chief financial officer, last Wednesday. IPL manufactures injection-molded and extruded plastic products.
Until a replacement for Cote is found, Bragdon will take over the financial management of the company.
Bragdon joined IPL in early January after Julien Metivier stepped down last December. Metivier remains a member of IPL’s board of directors.
The first member of the the ranks of the recently-departed was Jean-Yves Bacle, IPL’s executive vice-president and general manager. He left the firm last September.
Bragdon said the numerous changes in IPL’s upper management are a part of the company’s efforts to streamline operations.
“We’re working on a cultural change; we’re working to make the organization more ‘lean,'” Bragdon explained. To realize this objective, IPL needed to make some changes in its management roster, he added.
However, lean manufacturing can’t be implemented overnight and to ensure an effective cultural change, IPL is investing considerable time in educating its employees.
“Communication is the key,” he said. “We’ve been having meetings with all of the employees as well as the administration to tell them exactly how this organization has to change; it has been received very positively.”
The move towards lean management was driven by the need to offset high raw materials costs and the strong Canadian dollar, both of which are impacting the bottom line, Bragdon noted.
The relatively high Canadian dollar reduced IPL’s consolidated sales by $1.3 million in the first quarter (Q1) of 2006, the company reported in February.
Overall, however, IPL’s sales in Q1 2006 increased marginally to $48.8 million from $48.4 million in Q105.
IPL credited the packaging products division for the increase; it grew by 15.3 per cent to $25.3 million, which offset the 11.1 per cent decline in industrial product sales to $23.5 million, which was primarily due to the reorientation of IPL’s product lines for the automotive sector, according to the report.
“However, higher taxes and expenses resulted in negative profit margin of 2.2 per cent for Q106, compared to a positive profit margin of 0.2 per cent for the corresponding period a year earlier,” IPL reported.
To further increase its chances of success, IPL is investing heavily in robotics to automate some manufacturing processes, improve product quality and reduce overall costs — an effort the company says is paying off.
“In light of market conditions that remained difficult in recent months, the first quarter results gives us some confidence that initiatives taken to optimize our operations and improve profitability are beginning to yield the desired results,” Bragdon said. “It would appear that the robotization program introduced two years ago now, and our ongoing, company-wide efforts to cut operating costs, are beginning to bear fruit.”
This combined with the revamping of its product lines for the automotive and materials handling markets are translating into operating gains, he added, further increasing the firm’s competitiveness.
“Meanwhile, recent inroads by the packaging division into the U.S market are proof that the distinctive quality of the company’s products assures it a place among North American leaders in its industry, regardless of market conditions,” Bragdon said.
Despite the current market woes, and management shake-ups, Bragdon remained positive about IPL’s prospects; he singled out environmentally friendly packaging as one area where much growth, and thus opportunity, lies.
IPL currently employs more than 1,000 people in its four plants Saint-Damien, Saint-Lazare and Lawrenceville, Que. and Edmundston, N.B.


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