Planning to be the best
In this age of instant gratification, instant communications and instant millionaires, it's refreshing to find someone like Serge Gagn with a long-term outlook and the patience to stick to a plan. Ga...
In this age of instant gratification, instant communications and instant millionaires, it’s refreshing to find someone like Serge Gagn with a long-term outlook and the patience to stick to a plan. Gagn has built a highly successfully injection molding and moldmaking company with planning, determination and patience.
Although he began in the plastics industry as a machinist, Gagn has emerged as one of the industry’s consummate businessmen, one that knows how to position his company, Groupe G.L.P. Hi-Tech Inc. (St.-Jean-sur-Richelieu, Qu.) as a leader in a niche (high technology molding) and keep it there.
“We stick to our vision,” says Gagn, president and majority owner of G.L.P. Hi-Tech. “For example, we just finished business planning for the next three years. In my experience, not many companies plan this far ahead.”
The mission statement from this year’s business plan: to be the standard in Canada for development and manufacturing of high-tech parts.
Planning, investment in technology, pursuit of new products through research and development, retention of employees through challenge and compensation — these are the management ideals that Gagn applies throughout his businesses. His management and his company’s success have been recognized by many organizations over the years, with the most recent being the Canadian Plastics Industry Association. CPIA named Gagn Industry Leader for 2000.
“Serge represents the typical entrepreneur in the plastics industry,” says Pierre Dubois, CEO of CPIA. “He built a company from humble beginnings, rapidly becoming a factor in the industry due to his innovative products.”
Vision and determination pay off
“CPIA could not have set their eyes on a better guy,” states Jacques Lemoine. Lemoine has been general manager of G.L.P. Hi-Tech for 11 years.
“Serge has been successful because he’s very determined, he works hard and he has a good understanding of the plastics industry,” explains Denis Tougas, a partner with the accounting firm Raymond Chabot Grand Thornton, which has handled G.L.P. Hi-Tech’s audits since Gagn became owner in 1976.
When Gagn bought G.L.P. Hi-Tech, it was a division of American Biltrite, making molds for rubber injection. He soon switched to the plastics market, bought a larger building and moved the shop to St. Jean-sur-Richelieu. “From there he has expanded many times,” says Tougas. “He decided early in the company’s history to focus on molds and injection molding for technical items. There is a high cost of entry in this field so it was rough for a few years.”
The high cost of being a technical molder and moldmaker is not a one-time, start-up cost. G.L.P. Hi-Tech continues to invest heavily in R&D, and insists on keeping up with new technology.
“All of our injection molding machines are less than five years old,” says Lemoine. “Our name is Hi-Tech, and to be able to do that we need equipment that is modern and up-to-date. We believe the most economical operating years of a machine are the first five. In addition, the new equipment gives the staff a chance to keep up with new technologies. For example, the Nissei distributor En-plas Ltd. says we were the first in Qubec to have an all-electric press.”
The strategy of maintaining a modern shop is another example of Gagn’s long-term outlook.
“As a private company, we can make the best decisions for the long term. Public companies can’t do that, they have to look at the short term and shareholder interests,” he explains.
“I do long-term market research and business development for the company. I believe that is the president’s job. My general manager takes care of the day-to-day operations.”
A hands-off leader
“Serge has a good vision for the company. He works on medium and long-term business development. I run the operation, and he doesn’t interfere very much,” says Lemoine.
Although Gagn is described as a determined man with a good vision, Lemoine says “he’s not a slave driver by any means.” This is supported by the fact that there’s very little staff turnover at G.L.P. Hi-Tech. Lemoine attributes that loyalty to a couple of policies: staff are well compensated; continually challenged; and given the power and responsibility to do their jobs. “We try to keep them active, give them mobility, keep them challenged, and give them new goals to achieve,” says Lemoine. In addition, he says Gagn is “very receptive to ideas for employee recognition.”
“He has a talent for picking a good team,” says Tougas. “And he knows it is important to let these people play their roles.”
One distinctive characteristic of G.L.P. Hi-Tech is the company’s emphasis on engineering and technical support. “This is where we differentiate our business,” says Lemoine. “We are renowned for our technical support.” There are seven engineers among the staff of 80 to back up that reputation.
In-house moldmaking capability is another component of the design and engineering package that G.L.P. Hi-Tech provides for medical, electrical and transportation markets. As well, the company is certified to ISO 9001.
Helping the industry
Gagn has shared his talents and opinions with CPIA-Qubec for years, and is now chairman of the management committee. This position also gives him a seat on the board of CPIA at the national level.
Pierre Dubois notes that Gagn generally offers strong opinions and creative suggestions.
Gagn’s concern for long-term growth also shows through in his work with CPIA. “I don’t participate in CPIA because I think I will get any benefit from it,” he says. “But if I can help make the association stronger, then the whole industry will benefit.”
One of CPIA’s current projects is a training initiative at the university level. Laval University in Qubec City will offer a plastics curriculum within the engineering department, leading to a standard engineering degree with specialization in plastics. To help financially support the program, CPIA is coordinating an effort to raise $2 million dollars a year for five years from industry contributions.
An electrifying success
First used by Hydro-Qubec, G.L.P. Hi-Tech’s insulators for electrical distribution lines are now exported to 40 countries worldwide. “Sales have grown 400 percent this year,” says Serge Gagn, company president and the inventor of the all-plastic insulators. “But we still need further market penetration for this product,” says Gagn.
Developing new models for use in different countries is a challenge because testing is costly and extensive.
Gagn’s design consists of a polyester rod overmolded with a thermoplastic elastomer. It is lighter than traditional insulators made of ceramic, silicone and rubber. The development process for G.L.P. Hi-Tech’s breakthrough product took several years and cost $1.4 million.
Hydro-Qubec, the provincial electrical utility, signed the first major contract for the insulators in 1997. This permitted G.L.P. Hi-Tech to create a new division and build a new facility dedicated to molding and assembling the insulators.