Too-rapid expansion bankrupts Profine Molds
In a development that may offer lessons to the moldmaking industry, Oakville, Ont.-based moldmaker Profine Molds Inc. entered financial receivership on August 15 and has shut down its 60-employee oper...
In a development that may offer lessons to the moldmaking industry, Oakville, Ont.-based moldmaker Profine Molds Inc. entered financial receivership on August 15 and has shut down its 60-employee operation.
The shutdown comes at the end of a period of rapid expansion for the company. Profine Molds, which manufactured injection and blow molds for the automobile, consumer products, packaging, medical and cosmetics industries, was started by moldmaker Manuel Gomes in 1994 with two employees.
By 2003, the company had expanded into a 22,000-square-foot (sq. ft.) plant in Mississauga, Ont., and a nearby 5,000 sq. ft. research and development centre. In summer 2005, Profine Molds relocated to a 60,000 sq. ft. facility and opened a sales office in Hong Kong. The company opened another sales office in Sao Paulo, Brazil in March 2006.
Wayne Stoddard, Profine Molds’ marketing manager since June 2005, attributed the company’s shutdown in part to this rapid growth.
“Out of Profine Mold’s expansion came a slew of new customers, who would not have been attracted to us before,” he said. “But the things that made you different when you’re a small shop are the things that can potentially hurt you when you suddenly have to put out 200 or 300 molds a year. Typically, we’d get money from customers at day one and not see any more for 90 days after that, which led to problems.”
Stoddard also drew some lessons for the moldmaking community at large from Profine Molds’ fate.
“When you get bigger, you have to change the way you do business; you have to look at your revenue and where it’s coming from, you have to understand business, marketing, optimization and repeatability,” he said.
“There are still tremendous opportunities out there for moldmakers, but you have to pay as much attention to the business side as to making a great mold. The message to the market in what happened to Profine Molds is not to allow entrepreneurship to overrule business.”