Canadian Plastics

The Whole Package

Some of the largest plastics companies in Canada were built on the backs of immigrant entrepreneurs, many of whom poured their technical skill and ambition into their once-fledgling corporations. Take...

May 1, 2008   By Umair Abdul, Assistant Editor



Some of the largest plastics companies in Canada were built on the backs of immigrant entrepreneurs, many of whom poured their technical skill and ambition into their once-fledgling corporations. Take the examples of Manfred Lupke, president of corrugated pipe equipment manufacturer Corma Inc., or Mike Schmidt of the ABC Group, or Bob Schad of Husky Injection Molding Systems Ltd. Lupke, who was last year’s recipient of the Canadian Plastics Industry Association’s Leader of the Year award, came to Canada in 1969 from Germany. Schmidt was born in Croatia and spent eight years of his life in Austrian refugee camps, emigrating to Canada in 1956. And Husky’s Schad immigrated to Canada after studying mechanical engineering in Germany for two years, with just $25 to his name.

This year, the CPIA will recognize Sajjad Ebrahim, president of Par-Pak Ltd., a Brampton, Ont.-based packaging firm. In many respects, Ebrahim falls into the same category: he emigrated to Canada in the 1970s, and now sits atop one of North America’s largest thermoformed packaging companies.

But the story of Sajjad Ebrahim is different in one significant way. Lupke was a qualified mechanical engineer, and built his first corrugator in 1970 for an employer before forming Corma in 1973. ABC’s Schmidt specialized in blow molding technology before creating ABC, a company that produces blow molded auto parts. Unlike many of the other success stories in our industry, Ebrahim didn’t cut his teeth at another company before taking the plunge.

At the age of 25, Ebrahim purchased Par-Pak from its founding partners. Ebrahim had never worked in packaging before, but he saw a lot of promise in his modest acquisition.

A ROUGH START

Ebrahim meets me in a boardroom at Par-Pak’s Brampton headquarters. The eastern wall of the room is covered with large company posters — pictures of a variety of baked goods in Par-Pak’s packaging, set against the unmistakable blue background that can be found in all of the firm’s signage.

Par-Pak’s extrusion plant on Victoria Crescent has a capacity of 100 million pounds, and the plant supplies extruded film to the company’s thermoforming division located just down the road. There, Par-Pak manufactures a wide range of packages primarily for the baked goods industry.

Ebrahim explains that the market accounts for nearly three-fourths of the company’s revenue, and Par-Pak supplies its packaging to a diverse network of retail and wholesale bakeries and manufacturers of pre-packaged food products. Outside of the baked goods market, Par-Pak is also a major supplier to the foodservice industry. For instance, if you’ve purchased a salad at a major fast food restaurant in Canada recently, you have probably seen Par- Pak’s handiwork.

The company as it stands today is a far cry from the company Ebrahim inherited. Born in India and raised in Pakistan, Ebrahim received an MBA from Columbia University in New York at the age of 21. Upon completing his education, he returned to Pakistan and spent three years working for his family’s textile business.

Finally, at the age of 25, he decided to immigrate to North America. He made Toronto his new home, and started looking for a business that met his three criteria.

“I wanted a business that was not very capital intensive, the technology wasn’t too sophisticated, and there were regular business volumes,” he explained. Industry veterans may scoff at the suggestion —the packaging business has become a very capital intensive and technologically sophisticated industry — but in 1977, Par-Pak fit the bill. At the time, the company was primarily working with cut-in-place contact heat thermoforming equipment.

The two partners in the company were looking to pursue other business opportunities, and they found a buyer in Ebrahim. But almost immediately, Ebrahim found himself in over his head.

“I thought I’d made a big mistake in the first year,” he remembered. “The company was not doing well at all.”

Par-Pak did turn a profit in its first year under Ebrahim’s control, but he notes that it was a small one. He had also expected the partners to stick around and help him take care of the business.

“During the first year, I even asked them if they wanted the company back,” he said.

Fortunately, Par-Pak began to gain momentum after a slightly rickety start. The company grew internally and at a reasonable pace — about 10 to 15 per cent a year, by Ebrahim’s s estimation — until the mid-1980s.

Then, in 1987, Par-Pak’s business grew by roughly 89 per cent in one year. The company had made a major breakthrough in the baked goods industry, and became leaders in the market.

“In 1984, a major supermarket chain was selling six muffins in bulk bins for $1.29,” explained Ebrahim. Par-Pak was able to offer them a container that cost just 12 cents to make. The supermarket started selling the muffins for $1.89 and saw their sales go up by 400 per cent.

More than 30 years after Ebrahim’s purchase, Par-Pak plays in a different league of manufacturers. In 1977, around the time he took over, the company employed 15 people and reported sales of roughly $500,000 a year. Today, Par-Pak employs nearly 500 people and reports sales upwards of $100 million per annum.

TAKING CARE OF BUSINESS

Instead of seeing his lack of technical knowledge and experience as a handicap, Ebrahim thinks having no experience in plastics actually helped him.

“For most businesses, the principles are really the same in terms of how you run a business,” he noted. “It’s the technical side of the business I was lacking, and I think that helped me a lot.”

In order to take care of the technical side of his business, Ebrahim delegated the responsibilities to a man he hired two weeks after buying Par-Pak. As technical manager, Dominic Didomizio was put in charge of making sure the plant’s day-to-day operations ran smoothly.

“He was a remarkable individual, I haven’t seen another person like him,” said Ebrahim. “I used to spend a lot of time at the company, and he would spend 25 per cent more time than I would. He was very dedicated to the well-being of the company.”

Didomizio passed away in 2000 after an off-road vehicular accident, and Ebrahim says it was a huge loss for the company. The company established a scholarship program in his memory, with eight scholarships a year of $3,000 each going to employees’ children.

Having Didomizio on his team allowed Ebrahim to hone in on the company’s business objectives. “It made sure that I relied on somebody else, and that gave me time to grow the business,” he explained.

GROWING THE COMPANY

In recent years, Par-Pak has grown to become a global supplier. The company runs a plant in Houston, Tex., and a location in California was recently converted into a distribution centre. Ebrahim notes that having an established presence in the U. S. was an important step in serving the American market.

“I think it is important in the U. S. to be a local supplier, and also freight-wise it made more sense,” he explained.

Additionally, Par-Pak has a subsidiary in the United Kingdom, which helps the company serve the European market. The firm had been supplying salad packaging for a major fast food restaurant in Europe, and the company was invited to the company’s packaging supplier conference in 1994. There, Ebrahim discovered that Par-Pak was the only North America-based supplier in the mix.

“We decided at the time that if we didn’t become a European supplier, we would lose that business,” he said.

Over the last two years, Par-Pak has also worked to add capacity at its two Brampton locations, and much of that capacity hasn’t been sold out yet. For instance, five state-of-the-art Kiefel machines were recently added at the company’s thermoforming plant.

“You cannot go to a customer and say I’m going to start supplying you this product in nine months or a year d
own the road,” said Ebrahim. “In this business, you have to have capacity before you can go out and sell it.”

Ebrahim is particularly interested in expanding the company’s market share in the U. S., where Par-Pak is a relatively small player. He thinks the company can differentiate itself by picking up where some of its bigger competitors leave off.

“We are not in the commodity type of products we will go for the niche business,” he explained. “We can supply something that our competitors can’t, such as embossing a product or making a specialty tool for a particular item.”

According to Ebrahim, Par-Pak’s size allows the company to be more flexible than its larger counterparts. Although the company’s annual sales make it one of the larger packaging firms in North America, Ebrahim and his team still operate as a very small company.

“I think that is one of the things that I have always found in North America: you have to careful of your overheads. If you don’t control your overheads a profitable business will become unprofitable very quickly,” he argued. “I had a customer once tell me that the day you think you have it made, that’s the day things will start going downhill…I think we need to keep the organization as flat as possible.”

Although Ebrahim’s first year on the job was a tough climb, he noted that the last year has been the hardest in his tenure. He candidly speaks about the impact of high raw material costs, and the added pressure of a high Canadian dollar.

“The dollar is not helping because we export forty per cent of our production from [our Brampton locations] to the U. S.,” he said. “And many of the customers who we supply locally export their products to the U. S., so their margins are very squeezed as well.”

Par-Pak is now in what Ebrahim calls “survival mode,” and the management team has been looking at every part of the company to see if there is any room for cost reduction.

“I think it’s not in the big picture, it’s in the details…we have to look at every small cost and see how we can reduce that,” he said. “We have the latest technology, and if we eliminate the waste in our system we could become a leader…that’s the goal we are striving for.”

DEFINING LEADERSHIP

Near the end of our conversation, I ask Ebrahim how he defines leadership.

“I think a leader is a person who can inspire people, who people look up to not because of his position but because of his character and the way he goes about leading his life,” he explained. “And somebody who isn’t only profit-driven, but also involved in other areas like community involvement.”

In addition to supporting several hospitals through Par-Pak, Ebrahim has also been involved within the Canadian plastics industry. Ebrahim sat on the board of directors for the Canadian Polystyrene Recycling Association, and even served as the board chair from 1996 to 1997.

Additionally, Ebrahim is a firm believer in treating people with respect and dignity, and calls it one of his guiding principles in doing business.

For example, he explains that many of his employees immigrated to Canada, and may only get to see their families every four or five years. He says he understands how hard it can be to be far away from your family: Ebrahim’s mother still lives in Karachi, Pakistan, and his two daughters settled in the Dubai after getting married.

“We try to give them more time,” he said. “Going after four or five years and only staying for two weeks, that would be a hardship. We try to accommodate them as we much as we can.”

Although the industry has seen some significant changes since he took the helm at Par-Pak, Ebrahim still sees a lot of opportunities in the industry. For young upstarts like him who are just getting their start in the industry, he can distill his business philosophy down to two main points.

“If you go into business, my advice would be to, number one, look after your customers, and number two, look after your employees,” he said. “The rest of the things will fall into place.” CPL

———CPIA to hon our award winners in May

The 2008 CPIA Awards Dinner will take place on Wednesday, May 21, at the Westin Bristol Place Toronto Airport Hotel.

Ebrahim will receive the Leader of the Year award, becoming the 38th person since 1977 to be granted the award. CPIA will also hand out a Lifetime Achievement Award to an industry member who has made outstanding achievements, and CanPlast awards to people who made a significant contribution to the betterment of the industry.

Full details about the CPIA’s awards dinner, along with registration information, can be found on the association’s website. Additionally, full coverage of the Lifetime Achievement and CanPlast award winners, as well as the awards ceremony, will be available on the Canadian Plastics website later this month.

———

During the first year, I even asked them if they wanted the company back.”

———

I think a leader is a person who can inspire people,

who people look up to not because of his position but because of his character and the

way he goes about leading his life.”


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