IPL restructuring pays off with improved profitability in Q3 2006

The increased profitability of Saint-Damien, Que.-based injection molder and extrusion manufacturer IPL Inc., as shown in the company’s third quarter 2006 report, is the result of recent management restructuring, Serge Bragdon, IPL’s president and chief executive officer (CEO), said.

“Our profits definitely had something to do with our restructuring, because overall there are about 35 fewer people in our administration, and we have been refocusing our remaining administrative people around productivity and efficiency,” he said. “The restructuring is starting to bear fruit. Before, there were too many chiefs in the organization.”

According to its third quarter results, IPL’s earnings before interest, taxes, depreciation and amortization (EBITDA) before non-recurring items almost doubled, from Cdn.$4.4 million to $8 million. The company also reported net earnings of $1.9 million for the third quarter, excluding non-recurring items and a future income tax adjustment.

In September, 2005, IPL’s executive vice president and general manager Jean-Yves Bacle left the company, followed in May 2006 by Frederic Cote, the firm’s vice-president of finance and administration, and chief financial officer. (See Canadian Plastics , May 2006) Last month, IPL announced several senior management appointments, including Eric Doyon as vice president, finance and chief financial officer; Denis Pageau as vice president, research and development; and Pierre Fradette as vice president, human resources and communications.

And the changes are not finished yet, Bragdon said. “Our new executives will look into their own departments and make sure we have the right people in place. There will be more restructuring in the future,” he explained.

As part of the company’s ongoing effort to increase profitability, management intends to adopt the Lean Six Sigma methodology for all operations, Bragdon continued. A combination of Lean and Six Sigma process improvement methodologies, the Lean Six Sigma approach is structured around a statistical formula used to identify and improve key processes in order to eliminate waste and variations in manufacturing. “We want to use Lean Six Sigma to run as efficiently as possible,” Bragdon said.

IPL currently employs 1,100 people in its four plants in Quebec and New Brunswick.