Paper and Wood Products Cluster - Communauté métropolitaine de

Transcription

Paper and Wood Products Cluster
October 2004
Paper and Wood Products Cluster
Pulp and Paper
Printing
Furniture
Construction Timber
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ISBN
ISBN2-923013-60-3
2-923013-25-5
(French
(French edition
edition ISBN
ISBN 2-923013-48-4)
2-923013-24-7 )
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Note to the reader
Through its Economic Development Plan, the Communauté métropolitaine de Montréal (CMM),
has adopted a competitiveness strategy centred on dynamic and innovative business clusters. In
the fall 2003, the CMM launched a cluster identification program for metropolitan Montreal.
This marked the first phase of a process leading to the development and launch of an integrated
economic development and innovation strategy.
For each of the sectors studied, the CMM wishes to join forces with all the territorial bodies and
economic stakeholders concerned. It means to concentrate its efforts on its own role of planning
and coordination and does not intend to take the place of existing players and decision-makers
in the field, whose role it is to agree on a development plan under the supervision of a relay
organization representing their sector.
This document is divided into two distinct sections:
• The first section presents a configuration of the paper and wood products cluster;
• The second section groups together the ideas of the main players of that particular cluster and
their thoughts on future development.
The cluster configuration was based on documentary research confirmed by stakeholders in the
cluster itself. Comments were then made by industry officials in the ministries concerned. This
first section describes the value chain of the cluster and goes on to identify the organizations or
infrastructure contributing to its development. Finally, as economic development transcends
administrative or political borders, potential links with other regions of Quebec are indicated,
taking into account the niches of excellence developed by certain regions under the ACCORD
(Action concertée régionale de développement) program.
While the first section of the document is inherently factual, the second is more subjective, since
it reflects the perceptions of the main players in each cluster. These thoughts were gathered in the
strictest confidence so as to produce a maximum amount of data. They are focused on two main
themes, the state of relational assets and growth strategies. Since we know that relationships
between stakeholders are the first source of innovation, it is necessary to identify the relational
flow between the various components of the cluster. In the same way, in order to set priorities, we
need to know which strategies for growth are favoured by the players in the field.
This document is thus intended as a catalyst for priority actions aiming to energize the strategic
process of the cluster and to give direction to its innovative thrust. The process will be carried out
in a spirit of openness and dialogue which will eventually enable the Montreal metropolitan area
to assert its distinctive capabilities among the world’s most innovative and prosperous cities.
Michel Lefèvre
Consultant – Economic Development
Communauté métropolitaine de Montréal
Paper and Wood Products•
Paper and Wood Products
Perceptions
Configuration
Towards Niche Markets 7
Pulp and Paper / Large presence in CMM
Industrial Chain Pulp, Paper and Paperboard Manufacturing Converted Paper Product Manufacturing Development Factors Research, Financing
Training, Structural Organizations
16
Printing / From the Very Large to the Very Small
Industrial Chain Printing Publishing Development Factors Research, Training
Financing, Financial Assistance Associations 25
Furniture / A Growing Industry Industrial Chain Furniture Development Factors Research, Training, Financing Associations, Structural Organizations 34
Construction Timber / A Difficult Situation Industrial Chain Construction Timber
Development Factors Research, Financing Training, Associations Interregional Links Elsewhere in Quebec Relational Assets Going Beyond Traditional Impulses Strategic Elements Product Differentiation and Innovation Avenues for Growth Niche Market or Delocalization? Appendices Sources Individuals Consulted Credits 41
19
20
22
23
27
28
30
31
32
36
38
39
43
45
46
49
56
60
64
67
69
71
Towards Niche Markets
The wood-based industries, namely pulp and paper, printing and publishing, furniture and
construction timber are all represented in Quebec, providing 10% of all jobs throughout the
province. More than half of those jobs are located in the Communauté métropolitaine de
Montréal (CMM).
The CMM is a major player in these mature sectors, involving 40% of Quebec businesses, most
of which are large companies. In the paper and paperboard sector alone, the area is home not
only to major producers such as Abitibi-Consolidated, Domtar and Norampac, but also to large
manufacturers such as Johnson & Johnson and Emballages Standard Paper Box.
Almost all major printing and publishing groups have offices in the city: Quebecor Média,
Transcontinental, Relizon Canada, Southam Publications and Bell ActiMédia. In the furniture
industry, there are El Ran, Bestar and Dorel. And finally, the construction industry is represented
by large companies such as Uniboard, Maax and EMCO Building Products.
Pulp and paper — Pulp and paper companies mainly focus on paperboard, packaging and
sanitary paper products – all of which are sold locally. Like stationery items, these products
are closely related to the printing industry and, despite the presence of large players, these two
sub-clusters are mainly composed of SMBs.
Printing — The local printing industry is being increasingly modernized. For example, a number
of major city newspapers have redesigned their looks, thanks to their new digital presses. Certain
niches such as catalogue and label printing are also growing steadily. In the magazine and book
publishing world, computer technology is enabling more and more SMBs to delve into the risky
pre-press industry.
Furniture — The furniture industry is also well represented locally. This third sub-cluster is
also mainly composed of SMBs, producing mostly added-value niche products in response to
the American furniture that has been flooding the market since the Free Trade Agreement was
signed.
Construction timber — Finally, construction timber is not as strongly represented in the
metropolitan area, but still carries significant weight, as construction is a major sector.
Construction material is mainly destined for use in the city, which is where the distribution
mechanisms are located.
In these highly competitive sectors, improvements in product quality and production technology
are key factors for success. Sectors that can are gradually turning towards niche markets by
strengthening their added value. More than 75% of patents handed out in Quebec for these
four sectors have gone to businesses in Montreal. It is fair to say that these businesses are quite
competitive.
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Employment1 by Borough and City, 2001 — Paper Manufacturing
Montreal Island East End
1,090 Laurentians Rivière-des-Prairies/Pointe-aux-Trembles/Montréal-Est 630 Blainville Anjou
215 Boisbriand Montréal-Nord
100 Mirabel Saint-Léonard 145 Sainte-Thérèse Saint-Eustache Montreal Island – Central Core
3,270 Saint-Jérôme (outside the CMM) Mercier/Hochelaga-Maisonneuve 1,270 Ahuntsic/Cartierville
125 Lanaudière Plateau Mont-Royal 210 Repentigny Rosemont/Petite-Patrie
170 Terrebonne Ville-Marie 900
Villeray/Saint-Michel/Parc-Extension 85 North Shore
Sud-Ouest 390 Côte-des-Neiges/Notre-Dame-de-Grâce 120
Montérégie – South Shore Beauharnois Montreal Island – West End
1,400 Boucherville Mont-Royal 305 Candiac Saint-Laurent 1,095 Chambly Châteauguay
Montreal Island – South West
835
Delson Lachine 260
La Prairie LaSalle 540 Léry Verdun 35 L’Île-Perrot Longueuil Montreal West Island
460
Mont-Saint-Hilaire Pointe-Claire 130
Saint-Bruno-de-Montarville Dollard-des-Ormeaux/Roxboro 30
Saint-Constant Dorval/L’Île-Dorval 55 Sainte-Catherine Kirkland 10 Saint-Hubert Beaconsfield/Baie-d’Urfé 235 Saint-Mathieu Varennes Montreal Island
7,055 Vaudreuil-Dorion Laval 350
Montreal Metropolitan Area
Quebec Canada 620
10
10
10
10
20
570
275
95
170
895
1,430
115
110
335
85
45
10
25
10
20
125
10
15
10
35
20
10
15
425
9,730
34,265
98,400
1. Individuals 15 years of age or older who have a regular workplace or who work from home. People who have no fixed address are not included.
N.B.: Figures were rounded to the closest multiple of 5; they may therefore not add up exactly to the sum of the components.
Source: Statistics Canada, Employment by Place of Work, 2001 Census – Figures on Paper Manufacturing represent NAICS code 322.
Employment1 by Borough and City, 2001 — Printing
Montreal Island East End 2,995
Laurentians Rivière-des-Prairies/Pointe-aux-Trembles/Montréal-Est 960 Blainville Anjou 940 Boisbriand Montréal-Nord 305 Bois-des-Filion Saint-Léonard 790 Deux-Montagnes Mirabel Montreal Island – Central Core
4,030 Sainte-Marthe-sur-le-Lac Mercier/Hochelaga-Maisonneuve 570 Sainte-Thérèse Ahuntsic/Cartierville 340 Saint-Eustache Outremont 50 Saint-Jérôme (outside the CMM) Plateau Mont-Royal 405 Rosemont/Petite-Patrie 400 Lanaudière Ville-Marie 880 L’Assomption Villeray/Saint-Michel/Parc-Extension 550 Mascouche Sud-Ouest 575 Repentigny Westmount 35 Terrebonne Côte-des-Neiges/Notre-Dame-de-Grâce 225 North Shore Montreal Island – West End
2,515 Montérégie – South Shore
Mont-Royal 245 Beauharnois Côte-Saint-Luc/Hampstead/Montréal-Ouest 15 Beloeil Saint-Laurent 2255 Boucherville Brossard Montreal Island – South West
1,360 Candiac Lachine 475 Châteauguay LaSalle 820 Delson Verdun 65 La Prairie Longueuil Montreal West Island
710 Mont-Saint-Hilaire Dollard-des-Ormeaux/Roxboro 45 Pincourt Dorval/L’Île-Dorval 215 Richelieu Pointe-Claire 280 Saint-Basile-le-Grand Kirkland 30 Saint-Bruno-de-Montarville Beaconsfield/Baie-d’Urfé 105 Saint-Constant L’Île-Bizard/Ste-Geneviève/Ste-Anne-de-Bellevue 10 Sainte-Catherine Pierrefonds/Senneville 25 Sainte-Julie Saint-Hubert Montreal Island
11,625 Saint-Lambert Saint-Lazare Laval 1,470 Saint-Mathieu-de-Beloeil Varennes Vaudreuil-Dorion 440
45
65
10
15
30
10
35
90
145
280
10
30
80
160
720
3,640
20
40
1,250
25
225
35
55
20
1,050
10
10
10
25
95
30
10
160
375
55
10
20
20
65
17,460
Quebec 27,770
Canada 89,145
Source: Statistics Canada, Employment by Place of Work, 2001 Census – Figures on Printing represent NAICS code 323.
Paper and Wood Products•10
Employment1 by Borough and City, 2001 — Publishers
385 Rivière-des-Prairies/Pointe-aux-Trembles/Montréal-Est
50
Anjou 155
Montréal-Nord
60
Saint-Léonard
120
Montreal Island – Central Core
7,415
Mercier/Hochelaga-Maisonneuve
50
Ahuntsic/Cartierville
155
Outremont
185
Plateau Mont-Royal 1,385
Rosemont/Petite-Patrie 240
Ville-Marie 4,895
Villeray/Saint-Michel/Parc-Extension 115
Sud-Ouest 125
Westmount 60
Côte-des-Neiges/Notre-Dame-de-Grâce 205
Montreal Island – West End
505
Mont-Royal
85
Côte-Saint-Luc/Hampstead/Montréal-Ouest 60
Saint-Laurent
360
120
Lachine 30
LaSalle 45
Verdun 45
Montreal West Island
295 Dollard-des-Ormeaux/Roxboro 15
Dorval/L’Île-Dorval
95 Pointe-Claire 105
Kirkland 30 Beaconsfield/Baie-d’Urfé 10
L’Île-Bizard/Ste-Geneviève/Ste-Anne-de-Bellevue
20
Pierrefonds/Senneville
30
Montreal Island
8,705
Laval 505
Laurentians Blainville Lorraine Sainte-Thérèse Saint-Eustache
Saint-Jérôme (outside the CMM) 260
25
10
35
90
100
Lanaudière L’Assomption Repentigny Terrebonne 165
25
30
100
North Shore
430
Montérégie – South Shore
Belœil Boucherville Brossard Candiac Chambly Châteauguay Delson Léry Longueuil Mont-Saint-Hilaire Notre-Dame-de-l’Île-Perrot Saint-Amable Saint-Basile-le-Grand Saint-Bruno-de-Montarville Sainte-Julie Saint-Hubert Saint-Lambert Saint-Lazare Vaudreuil-Dorion 830
35
110
90
10
20
90
20
10
170
10
10
10
35
30
30
35
55
10
40
10,465
Quebec
15,135
Canada
72,285
Source: Statistics Canada, Employment by Place of Work, 2001 Census – Figures on Publishers represent NAICS code 5111, specifically Newspaper,
Periodical, Book, and Database Publishers.
Employment1 by Borough and City, 2001 — Furniture
3,260
Laurentians Rivière-des-Prairies/Pointe-aux-Trembles/Montréal-Est
960
Blainville
Anjou
895
Boisbriand
Montréal-Nord
670
Deux-Montagnes
Saint-Léonard
735
Mirabel
Oka
1,720
Rosemère
Mercier/Hochelaga-Maisonneuve 460
Sainte-Anne-des-Plaines
Ahuntsic/Cartierville 135
Sainte-Marthe-sur-le-Lac
Outremont
10 Sainte-Thérèse
Plateau Mont-Royal 225
Saint-Eustache
Rosemont/Petite-Patrie 145
Saint-Joseph-du-Lac
Ville-Marie 165 Saint-Jérôme (outside the CMM)
Villeray/Saint-Michel/Parc-Extension 180
Saint-Placide (outside the CMM)
Sud-Ouest 250
Westmount 10
Lanaudière
Côte-des-Neiges/Notre-Dame-de-Grâce
140
Charlemagne
L’Assomption
900
Mascouche
Mont-Royal 175
Repentigny
Côte-Saint-Luc/Hampstead/Montréal-Ouest 30
Terrebonne
Saint-Laurent 695
Lavaltrie (outside the CMM)
North Shore
735
Lachine
190
LaSalle 535
Boucherville
Verdun 10
Brossard
Chambly
945
Châteauguay
Dorval/L’Île-Dorval 265
Delson
Pointe-Claire 505
La Prairie
Kirkland
95
Les Cèdres
Beaconsfield/Baie-d’Urfé 30
L’Île-Perrot
L’Île-Bizard/Ste-Geneviève/Ste-Anne-de-Bellevue 35
Longueuil
Pierrefonds/Senneville 15
Mont-Saint-Hilaire
Notre-Dame-de-l’Île-Perrot
Montreal Island
7,550
Saint-Bruno-de-Montarville
Saint-Constant
Laval 1,850
Sainte-Catherine
Sainte-Julie
Saint-Hubert
Saint-Isidore
Saint-Lambert
Saint-Lazare
Saint-Mathias-sur-Richelieu
Saint-Mathieu
Saint-Mathieu-de-Belœil
Varennes
Vaudreuil-Dorion
Quebec
1,320
55
275
10
160
15
25
15
10
55
95
10
585
10
1,040
10
90
50
150
700
35
2,355
1,450
340
25
50
40
15
30
10
15
245
35
10
105
40
10
70
230
10
35
10
10
20
35
10
25
13,210
34,905
98,785
Canada
Source: Statistics Canada, Employment by Place of Work, 2001 Census – Figures on Furniture represent NAICS code 337.
Employment1 by Borough and City, 2001 — Wood Products
305
Laurentians Rivière-des-Prairies/Pointe-aux-Trembles/Montréal-Est
160
Blainville
Anjou
50
Boisbriand
Montréal-Nord
35
Mirabel
Saint-Léonard
60
Pointe-Calumet
Sainte-Anne-des-Plaines
630
Sainte-Thérèse
Mercier/Hochelaga-Maisonneuve
50
Saint-Eustache
Ahuntsic/Cartierville
30
Saint-Joseph-du-Lac
Outremont
10
Saint-Jérôme (outside the CMM)
Plateau Mont-Royal
20
Rosemont/Petite-Patrie
60
Lanaudière
Ville-Marie
105
L’Assomption
Villeray/Saint-Michel/Parc-Extension
75
Mascouche
Sud-Ouest
100
Repentigny
Westmount
30
Terrebonne
Côte-des-Neiges/Notre-Dame-de-Grâce
150
Lavaltrie (outside the CMM)
1,245
190
315
135
10
20
225
170
15
145
425
Mont-Royal
45
Saint-Laurent
370
160
Lachine
45
LaSalle
75
Verdun
40
135
Dorval/L’Île-Dorval
50
Pointe-Claire
55
Kirkland
20
Montreal Island
1,655
Laval
405
North Shore
1,620
Beauharnois
Beloeil
Boucherville
Brossard
Candiac
Carignan
Chambly
Châteauguay
Delson Greenfield Park
La Prairie
Longueuil
Mont-Saint-Hilaire
Saint-Amable
Saint-Bruno-de-Montarville
Sainte-Catherine
Sainte-Julie
Saint-Hubert
Saint-Isidore
Saint-Lambert
Saint-Mathieu
Saint-Mathieu-de-Beloeil
Varennes
Vaudreuil-Dorion
1,755
45
140
75
80
35
30
110
45
370
10
10
330
60
45
55
60
25
15
70
10
10
60
25
50
5,440
380
40
90
10
220
10
Quebec
43,010
Canada
140,075
Source: Statistics Canada, Employment by Place of Work, 2001 Census – Figures on Wood Products represent NAICS code 321
Configuration
Sub-Cluster
Pulp and Paper
Large Presence in CMM
It may surprise some to learn that there are quite a number of pulp and paper companies located in
the CMM. Major producers such as Abitibi-Consolidated, Domtar, Kruger and Norampac all have
their head offices in Montreal. And with the Paprican Institute, the area’s research infrastructure
is the envy of many other major paper producing countries such as Finland, Sweden and Japan.
The pulp and paper industry is a mature and cyclical one, and highly competitive.
Canada remains a leader in pulp and paper and the top producer for newsprint, but its position is
threatened by growing capacity in South America and the Orient. There are few newsprint plants
in the city itself, as plants that have become outdated are closing and being relocated to countries
with low wages. The sector’s growth rate is estimated at 3.2% per year between now and 2015.
In the field of converted paper product manufacturing, Quebec has 10,200 jobs in some 175
businesses. The number of jobs in the sector increased at a constant rate by 80% between 1985
and 2001. With booming growth of 191% between 1985 and 2001, the sector’s production factor
was 9.4% of the gross domestic product (GDP) for Quebec’s entire manufacturing sector in 2001.
However, commodities exports are not high, mainly due to high transport costs.
Consumer products are mainly sold on the local market, except for Johnson & Johnson products
(sanitary napkins). The company employs a staff of 1,000 in Montreal’s East End and exports its
products to five continents. The sector’s base market is the Greater Montreal Area. In the long
term, sales of these commodities (toilet paper, napkins, etc.) tend to match demographic charts,
growing along with the population.
The paperboard and packaging sector more closely follows economic cycles, and is more
dependent on the strength of the economy in general. The outlook for growth is by far better for
added-value paper manufacturers, which find niche markets for their products both here and
abroad. As with consumer products, rigid paperboard and packaging is mainly produced for
regional markets.
Innovation – The key issue
In order to stand out in a more mature industry, companies need to find new ways to minimize
costs. As a result, R&D tends to focus on processes, automation and sales rather than on new
products. Canada’s traditional advantages of access to energy resources and costs have, over
time, lost their lustre. Today’s environmental laws also add costs. Access to virgin wood fibre has
become more difficult and industry use of recycled fibre is growing. Liberalization of global trade
has facilitated exports but also increased the production capacities of developing countries.
Montreal plants therefore enjoy a highly innovation-friendly environment, especially seeing as
it is absolutely crucial to the survival of the industry, with close to 80% of patents awarded to
sector businesses in Quebec going to companies based in the city, particularly Domtar, Johnson
& Johnson and Paprican.
In terms of technical innovations (with respect to product, function and appearance), the
paperboard and packaging industry is much more dynamic than expected. In the long term,
the growth of imports, as well as the relocation of a portion of industry activities to developing
countries, could weaken this sector.
Technological innovation, even with regard to simple products, also plays an important role.
Carrousel, in Boucherville, is an excellent example of this. The company has been manufacturing
paper bread bags since 1993 (main clients include Première Moisson, Cousins, etc). Towards the
end of 2002, the business purchased a press in France and another in Germany to produce better
quality products faster, and increase its client base in Canada and the United States.
Great need for consolidation
In the 1990s, an extensive consolidation movement began in forest products. Undoubtedly a
historic step in this cluster’s development, it was not a unique phenomenon, as other industry
sectors such as aeronautics, pharmaceuticals, textiles, communications, printing and publishing,
also began showing significant consolidation activities during the same period.
Various commercial, financial and
structural factors helped spur along the
movement. Among the most important
factors were low to nearly non-existent
growth in newsprint, the drop in kraft
packaging paper consumption, the arrival
of more high-performing products in
certain paper and paperboard categories,
the import of products from low-cost
producers pushing prices down, lower
profitability of manufacturing businesses,
etc.
The Ten Largest Paper and Paperboard
Producers in Europe and Worldwide in 2001
Production Capacity (000 MTA)
1. Stora Enso (Finland)
2. International Paper (U.S.)
3. UPM – Kymmene (Finland)
4. Georgia Pacific (U.S.) 5. Weyerhaeuser (U.S.)
6. Smurfit Stone Container (U.S.)
7. Nippon Unipac (Japan) 8. Mead/Westvaco (U.S.)
9. Abitibi-Consolidated (Canada)
10. M. Real (Finland)
15,200
15,000
11,600
9,400
8,700
8,700
8,600
7,700
7,600
6,500
Many pulp and paper sub-cluster links
were still fragmented in Canada as well
as throughout North America, which
gave the competitive advantage to certain
countries or regions elsewhere where Source: Finnish Forest Industries Federation – February 2002
these industries were more focused.
This often resulted in returns on investment being too low to make up for the capital costs and
financial risks. Consolidation remains on the agenda for this now mature sector.
Industrial Chain
/ Industrial Chain
Pulp and Paper
Pulp, Paper and Paperboard
Manufacturing
The paper manufacturing sector is divided into two major categories. The first includes pulp,
paper and paperboard mills, while the second comprises converted paper product manufacturing
businesses.
Pulp and paper — Pulp and paper mills are divided into mechanical and chemical pulp. There
are no market pulp plants in Montreal. There are seven chemical pulp mills in Quebec, the
largest being Domtar in Windsor (1,000 employees), Fraser Papers in Thurso (450 employees)
and SFK Pulp in Saint-Félicien (350 employees). Tembec in Temiscaming (350 employees) is the
only mechanical pulp mill in Quebec. It is important to note that together, Tembec, Canfor and
Domtar’s Canadian mills cover 21% of the North-American production market.
Paper and paperboard — There are 12 major paper and paperboard mills in Montreal. Many of
these plants have a diversified line of utility products such as toilet paper, paper towels, napkins,
etc. But most mainly produce various paperboard and containers: fibre-board, corrugated
paperboard, linerboard, tubes, rolls, cups. Norampac, with eight plants in Quebec, is one of the
top ten manufacturers of corrugated paperboard, linerboards and recycled paperboard in North
America.
The main plants generally belong to major conglomerates such as Cascades. With three mills in
Candiac (215 employees), Laval (100 employees) and Île-Perrot (43 employees), it is the largest
kraft or packaging paper producer in Quebec. Kruger has two mills in the city, one in Lasalle
(230 employees), and the other in Montreal proper (190 employees), as does Norampac, with one
in Montreal proper (215 employees), and a second in Lasalle (165 employees) as well. There are
also Smurfit-MBI (420 employees) in Saint-Laurent and Abitibi-Consolidated (115 employees)
in Senneterre.
But local businesses are not left out of the loop. EMCO in LaSalle produces paperboard for
building linings. In Chambly, Bennet Fleet (155 employees) produces consumer fibre-board and
packaging. And with only six employees, Montreal’s Papeterie Saint-Armand hand-produces
specialty paper. Spexel used to produce fine paper, but its mill in Beauharnois closed and has yet
to find a buyer.
In their field of uncoated fine paper, Domtar is third on North America’s top-ten list, with nearly
16% of the North American production. The company by far outstrips its main rivals, which
together make up barely 5% of North America’s production capacity.
Newsprint — Abitibi-Consolidated remains the main newsprint producer in North America,
with close to 34% of the market’s existing production capacity in 2001. If we add the other
Canadian businesses, headed by Kruger (7%) and Tembec (3%), this figure reaches nearly 47%.
Note that in terms of volume, North American production capacity for uncoated fine paper is
almost as high as that of newsprint.
/ Industrial Chain
Pulp and Paper
Converted Paper Product Manufacturing
In the second major category — Converted Paper Product Manufacturing — the NAICS lists
two separate sub-categories. The first is Paperboard Container Manufacturing, which includes
coated paper bag and stationery product manufacturing. The second is the Other Converted
Paper Product Manufacturing category, which covers sanitary paper products and all other
converted paper products. The entire sector is considered competitive, although it should be
noted that the challenged faced by stationery and paperboard manufacturers often differ.
Paperboard containers — Most sector businesses located in the CMM are in paperboard
packaging. About a dozen companies manufacture corrugated and solid fibre boxes, only one of
which is active in other sectors as well. Among the largest are Mitchel-Lincoln (350 employees)
in Saint-Laurent and Norampac (220 employees) in Montreal. Approximately twenty businesses
produce folding paperboard boxes, with the largest being Alcan Packaging in Baie d’Urfé, with 460
employees. There are also four other businesses with payrolls exceeding 100 people: Champion
(230 employees) in Baie-d’Urfé, Wilco (220 employees) in Candiac, Cascades Boxboard Inc
(205 employees) in Montreal and the previously mentioned Carrousel (100 employees) in
Boucherville. The “Other Paperboard Container” category involves around a dozen businesses,
of which the largest is Ross-Ellis Printing (230 employees) in Montreal, which manufactures
blister-packing.
Paper bags and coated paper — Some twenty Montreal businesses are active in the production
of paper bags and coated and treated paper. Four of them have over 100 employees, namely
De Luxe paper products, Canadian Technical Tape Ltd., Jonergin Division of Invesprint, Vibac
Canada and Smurfit-Stone Packaging. Domtar is the largest Canadian manufacturer of fine
coated paper products, with slightly more than 6% of the North American production capacity.
Stationery products — There are about a dozen companies in the CMM operating in stationery
product manufacturing. Most have no other activities. Of these, four have over 100 employees:
Centre de Transition Le Sextant, Innova Envelope (a division of Supremex), Centis and Supreme
Envelope (a division of Supremex).
Sanitary paper products — There are seven companies manufacturing sanitary paper products
in the CMM area. The largest is the Johnson & Johnson plant in Montreal, which employs 800
people. It is important to note that Cascades, with a plant in Candiac on the South Shore (200
employees) and another in Laval (100 employees), and Scott Paper, which has a plant in Crabtree,
in the Lanaudière region (600 employees) and another in Gatineau, are the two largest Canadian
manufacturers, respectively covering 6% and 4% of the North American production capacity.
Kimberley Clark’s plant in Saint-Hyacinthe is the fourth-largest producer in Quebec, with some
260 employees.
All other products — The “All Other Converted Paper Product Manufacturing” category
comprises some thirty businesses, most of which are active in several sectors. The only one with
more than 100 employees and focusing solely on one activity is Winpak Heat Seal Packaging, in
Vaudreuil-Dorion.
Development Factors
/ Development Factors
Pulp and Paper
Research
There are several players in the CMM who are actively seeking solutions to the problems facing
paper manufacturers. At the top of the list is the Paprican Institute (Pulp and Paper Research
Institute of Canada) which operates research laboratories and pilot plants in Pointe-Claire and
Vancouver, as well as a technology transfer centre in Prince George, B.C. Most of the major pulp
and paper businesses are members of the institute which, with its 340 researchers, is one of the
largest in the world.
The McGill University Pulp and Paper Research Centre, which is currently undergoing a transition
period, and the École Polytechnique de Montréal both participate in Paprican’s activities, which
have slowed down recently with these two institutions as well as in Pointe-Claire. The Pulp and
Paper Research Institute of Canada is also an educational institute that has developed training
programs for both McGill and Polytechnique.
Meanwhile, the interuniversity Groupe de recherche en écologie forestière (Forest ecology research
group – GREF) at the Université du Québec à Montréal focuses on forest ecosystems, particularly
the planting of new species. The GREF is the largest forest ecology research group in Canada and
one of the largest in the world.
While the paperboard and packaging industry is highly active in the CMM, it is not well represented
among these research organizations. The reason is that researchers are not sufficiently interested
studying recycled fibre, which would more closely meets the needs of this industry.
Financing
Private venture capital firms interested in pulp and paper are few and far between, while large
companies are usually financed via more traditional methods. Quebec’s Société générale de
financement (General financing corporation – SGF) is active in development capital and invests
in structuring projects carried out in partnership with the private sector, under the usual terms
for profitability. The Fonds de solidarité FTQ has a dedicated team in Montreal for the wood
products sector.
Meanwhile, Investissement Québec also awards grants under its FAIRE (Fonds pour l’accroissement
de l’investissement privé et la relance de l’emploi) private investment growth and employment
fund program. Recently, the new sawmill in Bowater, at Maniwaki, received up to $1.2 million.
The program was however replaced by the Strategic Support for Investment Program (PASI), the
terms of which will be made public shortly. Other grants are also available through industrial
recovery programs such as those in the so-called “Resource Regions” or in Gaspésie.
Pulp and Paper
Training
There are no specialized Cégep–level training programs in pulp and paper in the Montreal area.
Interested students need to go to Jonquière, Sainte-Foy or Trois-Rivières.
At the university level, the Université du Québec à Montréal (UQAM) offers graduate programs
in natural sciences, including a graduate diploma in sustainable forest resource management in
conjunction with the Université du Québec à Trois-Rivières. The École Polytechnique also offers
graduate degrees in mechanical, chemical and industrial engineering and the Université de
Montréal offers graduate studies in natural sciences.
McGill University offers undergraduate and graduate programs in biology, chemistry, chemical
engineering and mechanical engineering at its downtown campus. Its Macdonald College
campus in Sainte-Anne-de-Bellevue also offers a Master’s degree in Natural Resource Sciences.
Finally, Concordia University offers programs in natural sciences as well as mechanical and
environmental engineering.
Structural Organizations
The main structural organizations are located in Ottawa, Quebec City or Toronto. However, each
ministry has an office in Montreal. Surprisingly, there is no specific Pulp and Paper Sectoral
Workforce Committee, which is extremely highly useful in defining the training needs for a
given sector. The needs of the paperboard and packaging businesses are covered instead by the
Graphics Communications Sectoral Workforce Committee.
The head offices of several major associations are however located in Montreal: the Pulp and
Paper Products Council (PPPC), the Canadian Pulp and Paper Association, Pulp and Paper
Technical Association of Canada (PAPTAC). Every year, these groups, which target mainly
large companies, organize the World Pulp and Paper Week as well as the world’s largest annual
exhibition of industry technology (EXFOR).
It is astonishing that there is no provincial paperboard and packaging association in Quebec.
Meanwhile, the Packaging Association of Canada has its head office in Ottawa, with a secondary
office in Montreal. The Forest Products Association of Canada also has its head office in
Ottawa.
Sub-cluster
Printing
From the Very Large
to the Very Small
Printing and publishing is the seventh largest manufacturing industry in Canada, with close to
5,500 establishments employing over 135,000 in 2002.
In Quebec in 2001, there were 1,429 businesses in Printing and Related Support Activities
(NAICS code 3231), employing 28,620 people, with a production value estimated at $3.2 billion.
The Ontario market (close to $6 billion) is twice as large. Only 2% of industry businesses are not
Canadian-owned.
The printing industry is dominated by a small number of large players (Québecor,
Transcontinental). Only 4% of companies are medium or large businesses with at least 100
employees. In 1996, these firms represented over half of the jobs in the sector (52.9%). Of the
remaining 96% with fewer than 100 employees, 75% have fewer than 20, representing 26.6% of
all jobs in Quebec.
According to a 2002 study, one third of printing and publishing businesses had sales of $1 to $10
million, while 40% had less than $500,000. Most companies therefore do not generate enough
business to compete with the major players, whose clients are located in many large Canadian
and American cities.
Local and international markets
Small businesses distribute locally and cannot compete with the big companies for printing large
quantities of newspapers, flyers and magazines. However, many succeed in carving out a niche in
certain sub-sectors, such as pre-press activities, where the democratizing effect of the computer
age makes it possible to prepare visual or textual content with little initial investment, making
start-up that much easier.
Pre-press includes all activities prior to printing, such as data entry (text and images), page layout,
image handling, imposition, film and proof production and plate engraving. With changing
technologies, some of these activities – such as plate engraving – are in sharp decline.
Within the CMM, Montreal and Laval are responsible for 34% of employment in Quebec’s
printing industry (8,055 jobs), while Montérégie holds 24% (5,670 jobs). Not surprisingly, the
industry is highly linked to the media and communications sector, which is very well represented
in the city.
It is also important to note that the development of new technologies has not halted the use of
paper and printed materials.
Industrial Chain
/ Industrial Chain
Printing
Printing
The printing industry can be divided into three business sectors: 1) Commercial forms,
2) Newspapers, magazines, periodicals and books, 3) Other commercial printing.
The commercial forms sector represents 41% of the total and comprises businesses whose main
activity is printing sales receipt booklets, commercial forms, accounting books and other similar
printed products. The use of computers has not slowed consumption of this type of printed
documents.
Newspaper, magazine, periodical and book printing represents only 20% of the sector and
includes businesses whose main activity is printing (with or without publishing) of brochures,
catalogues, circulars, flyers, directories, newspapers, books, periodicals and magazines. Brochures
and catalogues are on the rise, while newspaper printing is stagnating or slightly on the decline.
Other commercial printing includes the 39% of businesses whose main activity does not fall into
the other two categories, i.e. cardboard packaging, calendars, greeting cards, labels, cheques,
money orders, painting reproductions and other prints and printed material.
Printing processes include offset lithograph printing (sheet-fed or rotary), flexography, silk
screen and digital printing. Flexography, which is mainly used for packaging, is on the rise. Silk
screen printing, mainly used for posters, clothing, displays, panels and kiosks, is also a growing
field. Digital printing, mainly used for micro publishing and variable content is growing steadily
as well.
Few businesses are specialized and the integration of several different steps in the production chain
varies considerably from one company to the next. The notion of sub-contracting is therefore
fairly hard to define. Businesses tend to integrate the various printing activities to differing
degrees. There have always been small local printers with high social value but little long-term
viability. The industry as a whole has become more complex, relying increasingly on the latest
technologies, with demanding professional standards, and the sector is highly competitive.
High urban concentration
The bulk of the printing industry is mainly concentrated in Montreal, which houses 60% of the
approximately 400 companies in Quebec. Next is Laval with some 50 businesses and the South
Shore with 13. The network consists mainly of SMBs, with two giants among them: Quebecor
World and Transcontinental Printing.
Quebecor World has 164 printing plants worldwide, 10 of which are in Quebec, with three
located in the CMM: one in Montreal (430 employees), one in LaSalle (300 employees) and one
in Laval (235 employees). In 2002, it posted income of $9.8 billion CAD. Its main challenges are
high competition and excess capacity. Although the company’s head office is in Chicago, it is
currently managed from Montreal.
Transcontinental Printing is one of the top ten commercial printers in North America and the
largest printer of flyers, books and newspapers in Canada. Of its 45 plants, 20 are located in
/ Industrial Chain
Printing
Quebec, 5 of which are in the Montreal area: one in Saint-Léonard (390 employees), one in
Boucherville (300 employees), one in Montreal (180 employees), one in Anjou (160 employees)
and one in Lachine (150 employees). The company posted income of $1.26 billion in 2002. In
2000, the Group signed a contract to print the daily newspaper, La Presse. A new plant was built
in Montreal’s East End, where production began in October 2003. Transcontinental plans to offer
its “turnkey” outsourcing service to several major dailies across Canada and the United States.
Quebecor World and Transcontinental are both aiming for strong vertical integration to become
the “one-stop shop” for all their clients’ needs. For them, as well as for industry SMBs, market
development is based on technological development.
There are many major local printers worthy of mention. Relizon Canada, of Boucherville,
employs 1,100 people in its form printing plant. Emballages Standard Paper Box employs 500
people, a number of which work in printing paperboard produced onsite. There is also Datamark
Systems (tickets, bar codes, etc.) which employs 530 people in its two LaSalle plants and its plants
in Laval and Boucherville. In Longueuil, Interchèques (Davis & Henderson) employs 160 people
for its cheque printing business.
Publishing
The metropolitan area has more than forty publishing companies issuing journals, newspapers,
magazines and other publications. Among the largest players are newspaper publishers: Gesca
(La Presse: 800 employees), CanWest Global Communications (The Gazette: 800 employees),
Quebecor (Le Journal de Montréal: 560 employees) and Transcontinental Média (Les Affaires:
350 employees).
Among the major magazine publishers there are Reader’s Digest (300 employees), TVA
Publications (Clin d’œil, Le Lundi. TV Hebdo, etc.: 150 employees), Rogers Media Publishing
(L’Actualité, Chatelaine: 150 employees) and Saint-Joseph’s Oratory (150 employees). As well, Bell
ActiMedia (800 employees) publishes telephone directories and CEDROM-SNi (100 employees)
publishes online directories and archives.
Major book publishers include Sogides, which employs 425 people through its various publishing
and distribution (Messageries ADP) companies and Chenelière-McGraw Hill which, together
with Graficor, has a staff of 300. Meanwhile, Transcontinental Publications has 165 employees
while Quebecor Communications employs 150.
Development Factors
Printing
Research
Printers generally assign very little importance to research and development. As a whole, the
Canadian industry posts very few expenses in R&D as compared to other manufacturing
industries, coming in 26th out of 27 sectors. However, the industry does benefit from the
innovations of companies that provide its manufacturing input.
Since 1996, Montreal’s QIGC (Quebec Institute of Graphic Communications) has been carrying
out advanced research, in particular on inks and paper printability. Techcom, the QIGC’s
technical department, offers printers complete printability expertise. Acting as an integrated
printshop from prepress to finishing, the Institute features a range of machines complemented
by ink, paper, printability and color laboratories equipped with latest generation technology.
The Institute also locates, collects, analyses and distributes technical, technological and economic
information through its watchdog, Vigicom. This information is disseminated in a number
of ways, such as conferences, press reviews, technological monitoring, market research and
publications for both technical specialists and managers.
Training
Professional training centres (PFC) offer various specialized programs at the high school level. For
example, the Calixa-Lavallée PFC in Montreal offers vocational diplomas (DEP) in printing and
computer graphics processes. The Verdun PFC offers a vocational diploma in computer graphics
processes and the Centre de formation Compétences 2000 offers vocational diplomas in printing
and finishing as well as in computer graphics processes. The Jacques Rousseau PFC in Longueuil
and Rosemount Technical PFC in Montreal also offer vocational diplomas in Printing.
Collège Ahuntsic offers complete programs in administration, design, pre-press and printing,
while Vieux-Montréal and Marie-Victorin Cégeps also offer collegiate level diplomas (DEC) in
graphic design.
At the university level, the École de technologie supérieure (ÉTS) offers an undergraduate
certificate in industrial production and graphic communications, and UQAM’s École de design
offers a Bachelor’s degree in graphic design.
Also, the Quebec Institute of Graphic Communications (QIGC) is a private establishment
offering additional training for graphics communications professionals. The QIGC is active in
graphic design, pre-press and printing, and also organizes public seminars in these fields.
Printing
Financing
As the printing industry generally involves large companies, financing is often achieved through
traditional methods, such as the stock market and banks.
In the written media sector, the Société de développement des entreprises culturelles du Québec
(Quebec cultural business development corporation – Sodec) offers a tax credit for book
publishers other written media operators aiming to increase press runs. Sodec also offers
working capital solutions for Quebec businesses that have been in operation for at least one
year and that can demonstrate commercial success for products with significant cultural content
(magazines, periodicals, weeklies, etc.). These funds cover financial risks related to activities
aimed at improving their positioning (larger press runs, increased subscriptions, advertising
sales, etc.) on target markets.
The Fonds d’investissement de la culture et des communications provides venture capital (in the
form of capital stock, debentures, investisments) to cultural businesses, including the written
press and publishers. Investments do not exceed 49% of the partnership and generally include a
share repurchase formula after five to seven years. The Société de développement des périodiques
culturels québécois (Quebec cultural periodical development corporation – SODEP) also provides
financial support for over sixty Quebec magazines.
Financial Assistance
Federally, the Department of Canadian Heritage has created three financial assistance programs.
The first is the Canada Magazine Fund, which has four components to it: Support for Editorial
Content (SEC), Support for Industry Development (SID), Support for Business Development for
Small Magazine Publishers (SBDSMP) and Support for Arts and Literary Magazines (SALM).
The second is the Book Publishing Industry Development Program (BPIDP), the objective of
which is to ensure choice of and access to Canadian-authored books that reflect Canada’s cultural
diversity and linguistic duality in Canada and abroad. This program also has four components:
Aid to Publishers, Aid to Industry and Associations, Supply Chain Initiative and International
Marketing Assistance.
Finally, the Publications Assistance Program (PAP) enables Canadian journals to be distributed
across the country at affordable cost. The program supports a variety of periodicals including
community newspapers and publications serving ethno-cultural, aboriginal and minority official
language communities.
Printing
Associations
The Association des arts graphiques du Québec (Quebec Graphic Arts Association – AAGQ),
located in Montreal, is affiliated with the Canadian Printing Industries Association. The
provincial-status AAGQ comprises manufacturing and service companies operating in the
graphic arts industrial chain and related sectors, oversees the promotion of the graphic arts
industry and offers member businesses informational and management services.
The mission of Quebec’s Comité sectoriel de main-d’œuvre des communications graphiques
(graphics communications workforce sectoral committee) is to encourage businesses to work
together in order to pinpoint training needs and determine the best tools to meet those needs. Its
website provides information on the job market as well as the committee’s action plan.
The CMM is also home to the Association des artisans d’art graphique de Montréal (Montreal
Association of Graphic Artists), which offers professional services to its members and organizes
events such as the Gutenberg Gala and the Semaine de l’imprimerie (Printers’ Week). The
Association des enseignants en imprimerie du Québec (Quebec Association of Printing Instructors)
offers links to technical and high school training programs.
The Ottawa-based Canadian Printing Industries Association is the national voice of the prepress, press and finishing sectors.
For magazines, there is the Montreal-based Association québécoise des éditeurs de magazines
(Quebec Association of Magazine Publishers) which, since its foundation in 1991, is dedicated
to promoting industry development as a whole and defending the interests of its members. There
is also the Canadian Magazine Publishers Association in Toronto.
For the past 10 years, the Annuaire des médias de la publicité au Québec (AMPQ – Directory of
Quebec Advertising Media) in Laval has offered networking services to its members, in addition
to publishing a magazine and daily online information. Finally, there is also the InfoPresse
magazine in Montreal.
Sub-cluster
Furniture
A Booming Industry
Despite the fact that most industry raw materials come from outlying regions, close to 40% of
all furniture manufacturing companies in Quebec, or just over 370 businesses, are located in the
CMM.
For industries upstream of furniture, the situation is similar to that of many traditional sectors:
many small- and medium-sized businesses working on a small scale, serving local markets.
Larger businesses with higher productivity levels use new technologies (computers, digitallyoperated machinery) that help to increase their output.
The trend towards consolidation
The furniture industry, which is highly sensitive to economic cycles, went through two recessions
in the past twenty years, leading to sector consolidation. In Quebec, the last recession in the early
1990s nearly halved the number of businesses in the sector (from 937 in 1990 to 519 in 1995).
With the 1993 abolition of U.S. trade tariffs on furniture, the industry began to redevelop into
what we see today: an increase in Quebec exports to the United States and greater specialization
towards mid- and high-range products.
In 2001, Quebec’s exports reached $1,782 million, as opposed to $270 million in 1992, representing
a growth of over 23% per year. In 2001, nearly 98% of Quebec furniture exports were destined
for the United States. Export markets now account for over 40% of Quebec’s furniture industry
shipments.
American manufacturers meanwhile saw their Canadian market share grow from 8.8% to 14.5%
over this ten-year period. These figures are not as high in Quebec, as the province’s furniture
industry is very strong in residential furniture, while the focus of American manufacturers is
mainly on office furniture, which in Canada is based mainly in Ontario.
The creativity advantage
Furniture manufacturers have seen positive development by specializing both in niche markets
and custom products. The sector is in a favourable position thanks to its long history and solid
know-how. The Montreal urban community provides a large market base, while its proximity to
the U.S. is good for exports.
Quebec’s industry players have a highly-developed sense of design and creativity that gives them
an edge at a time when the economy is moving more towards one of “choice” in which intangibles
— fashion, design, taste and customer behaviour — are increasingly important factors.
Industrial Chain
/ Industrial Chain
Furniture
Furniture
The largest employers are almost all located in Montreal’s suburbs. EL RAN Furniture, located
in Pointe-Claire, employs 650 people for its upholstered chairs and sofas. Dorel in Westmount,
and Meubles D&F in Saint-Léonard both have 350 employees. After that, the size of businesses
drops quickly as nearly 300 companies in the city employ fewer than 100 people.
The five major product categories for this sector are represented within the CMM: household
furniture, kitchen cabinets, upholstered household furniture, office furniture and institutional
furniture.
Wood Household Furniture — This sector exports close to half of its output. Although the
main leaders are located in the Mauricie region (Canadel, Dinec), the sector’s businesses are
considered competitive. Meubles D&F in Saint-Léonard employ a staff of 299 while Woodcraft
National Canada has 160 employees.
Wood Kitchen Cabinets and Counter Tops — The three largest manufacturers for this
sector are medium-sized businesses: Cuisine Expert, a subsidiary of Maax, located in Laval,
(390 employees), Bélanger Laminés in Boucherville (190 employees) and Cuisine Crotone in
Montreal (130 employees). The others have fewer than 100 employees.
Upholstered Household Furniture — Almost all production for this sector is concentrated on
the Island of Montreal. The sector is considered an industry leader, with strong development
potential. Besides EL RAN in Pointe-Claire, the largest include Jaymar Furniture in Terrebonne
(300 employees), Berkline in Anjou (185 employees), Woodcraft National in Saint-Léonard
(160 employees) and Rodi Design in Longueuil (150 employees). All other companies have fewer
than 75 employees.
Office Furniture — The bulk of the Canadian officer furniture industry is located in Ontario
and faces tough competition by American manufacturers. The CMM is however home to Patella
Manufacturing, with 180 employees in LaSalle and Standard Desk Exception (100 employees)
in Laval.
Institutional Furniture — This is the sector with the largest number of businesses in the
CMM. The sector serves hotels and restaurants, banks, head offices, businesses and various
communities. The largest employer is located in Laval – The Corcan division of the Correctional
Service of Canada, which employs 550 people. In addition to wood furniture, the company also
manufactures metal filing cabinets and prints t-shirts and other products.
Next is Artitalia in Montreal (245 employees), Suss Woodcraft International in LaSalle
(200 employees), R-2000 Ebénisterie architecturale in Montreal (180 employees), Norclair
Woodworking in Boucherville (125 employees) and Delta Furniture in Saint-Léonard
(125 employees). All others fall below the 100 job mark.
Development Factors
Furniture
Research
There are no research organizations dedicated solely to furniture in the CMM area. The main
innovations in the sector focus chiefly on mechanics. However, there is a Centre de recherche
industrielle du meuble et du bois oeuvré (Industrial research centre for furniture and milled wood)
at the Victoriaville Cégep. And the industry is looking forward to the 2005 opening of a milled
wood processing centre at Laval University’s Faculty of Forestry and Geomatics.
Meanwhile, the Centre de recherche industrielle du Québec (Quebec industrial research centre
– CRIQ) has a team dedicated to studying wood properties and issues surrounding endurance,
resistance, veneer and particleboard, overlay and finishing for the development of equipment for
primary and secondary wood processing plants.
Training
In Montreal, Cégep du Vieux-Montréal offers a diploma in cabinetry. The École québécoise du
meuble et du bois ouvré (Quebec school of furniture and milled wood – EQMBO), based in
Victoriaville, has a branch in Montreal, with around 150 students. The school offers courses
in all basic aspects of production, as well as everything related to wood product finishing. It
has the equipment to allow students to work on private furniture projects as well as so-called
“architectural” furniture.
UQAM’s École de design offers a Bachelor’s degree in Environmental Design which trains
students in industrial design, which is often used in the manufacture of products for the home,
such as furniture. As yet, Quebec has no engineering programs in the field of furniture, but Laval
University is expected to fill this gap in the coming years.
Financing
Besides traditional sources of financing, furniture manufacturers are eligible for tax credits in
industrial design. Specialists in industrial design may be hired (or sub-contracted) to design
new products or processes. Manufacturers seeking to expand or to increase their export volume
also have access to Investissement Québec programs for SMBs, such as loan and line of credit
guarantees. Finally, the SGF may invest development capital in partnership with the private
sector.
Furniture
Associations
The Montreal-based Quebec Furniture Manufacturers Association (QFMA) is quite active,
with close to 200 furniture and furniture parts manufacturers, covering over 85% of Quebec’s
production in the home, office and institutional furniture sectors. The Association provides its
members with assistance in promotional marketing, exports, credit information and continuous
education, and also finances sectoral studies. In 2003, the QFMA organized an industrial
efficiency diagnostic program with the participation of 25 businesses.
Quebec City is home to the Association des fabricants et distributeurs d’armoires de cuisine du
Québec (Quebec association of kitchen cabinet manufacturers and distributors – AFDICQ).
Founded in 1981, the AFDICQ is an association of approximately one hundred manufacturers and
distributors of kitchen and bathroom cabinets, whose combined production volume represents
75% of the industry’s annual shipments.
Structural Organizations
The Comité sectoriel de main-d’œuvre des industries des portes et fenêtres, du meuble et des armoires
de cuisine (workforce sector committee for the doors and windows, furniture and kitchen cabinet
industries) has its offices in Montreal. Its mission is to analyse job market trends in order to
direct strategies for balancing labour supply and demand in the sector.
Meanwhile, the Centre d’information et de valorisation du meuble de Louiseville (Louiseville
furniture business information centre), carries out technology watch activities on behalf of
manufacturers in the Mauricie region.
Sub-cluster
Construction Timber
A Difficult Situation
Of the nearly 1,700 businesses in Quebec, the Montreal metropolitan area represents one
tenth of the construction timber industry. Most milling and primary processing activities are
located outside city centres, although there are several large sawmills within the CMM, such as
Goodfellow, General Woods & Veneers Ltd. and Simon Lussier, as well as veneer manufacturers
such as Commonwealth Plywood and Kott Lumber.
These businesses are experiencing increasing difficulties as resource-rich regions are actively
developing value-added products at lower cost, while urban manufacturers have to deal with
higher overhead costs.
While there is an increasing trend towards plastic and metal products in building construction,
construction timber is still a high priority. For example, installing an aluminium or vinyl overlay
still requires a wood frame. And even if the structure is made of concrete, wood is needed
for pouring it. Any time the metals industry is tapped, the timber industry is also an indirect
beneficiary.
The real estate market has been highly active in the metropolitan area for the past five years
at least, and the industry has benefited. The CMM is home to almost half of the 1000 Quebec
businesses operating in the sale and distribution of construction material, which also includes
plastics, brick and metal parts.
The construction industry
The construction industry has been flying high for the past few years. The Montreal metropolitan
area provided 61,178 jobs in 2003, up 8% from 2002. The area represents over 55% of all
construction in the province. Approximately 22,000 individuals work in Montérégie and 24,000
in the North Shore area (Laval, Lanaudière, Laurentides).
The area’s major construction projects are demonstrable proof of the strength of the industry
and of the economy in general. That strength should continue in 2005, with the completion of
the international finger at Montreal’s Trudeau Airport ($350 million), the renovations made to
the Montreal Metro system installations ($342 million), the upgrades done at the Petro-Canada
refinery ($245 million), the expansion of the Port of Montreal ($224 million) and the construction
of Concordia University’s new engineering complex ($172 million).
In all, residential, commercial and industrial construction activities generated sales of $11.3 billion
in 2002, which works out to close to 5% of the provincial GDP. That same year, construction
provided work for 170,000 people, an increase of 28.1% over 1999. However, it is important not
to forget that the industry is highly cyclical.
Construction is also an SMB industry, where only a minority (4%) of businesses have incomes
that exceed one million dollars. Most (80%) companies have incomes of less than $250,000. In
the long term, the ones that remain make up a key group of skilled workers.
Industrial Chain
/ Industrial Chain
Construction Timber
Construction Timber
Construction timber is used in various forms, depending on the phase of the building
construction. Lumber is used for building the frames and formwork that serves as the skeleton
of a house. Veneer and plywood is used for carpentry and woodwork, floors and other items that
add to the usefulness and comfort of a home. These latter are increasingly factory pre-assembled
(millwork), which considerably speeds up construction of the building.
Lumber — Lumber is one of Quebec’s best resources. Its production doubled between 1990 and
2000, going from 3.69 to 7.70 billion foot board measure (fbm). The industry has however little
representation within the CMM, which has only 14 businesses that fit fall under NAICS code
3211, which covers sawmills as well as shingle, shake and wood preservation mills.
The largest mill in the CMM is Goodfellow (350 employees). Located in Delson, it is the third
largest mill in Quebec. General Woods & Veneers, the seventh largest, is located in Longueuil
and has 285 employees. In Blainville, there are 125 employees working at Simon Lussier.
Veneer and plywood — The field of Veneer, Plywood and Engineered Wood Products (NAICS
code 321210) also has little representation in the CMM. There are however a few major players,
such as Commonwealth Plywood, in Sainte-Thérèse, with 235 employees and Kott Lumber in
Boisbriand (140 employees), which manufactures wood frames. There are also Bois Expansion
which employs 65 in Montreal and Seatply Products with a staff of 60 in Saint-Laurent.
Millwork — The situation is not much different for millwork and prefabricated wood homes
and buildings, which fall under “Other Wood Product Manufacturing”. There are 58 companies
operating within the CMM, most of which have fewer than fifty employees.
There are four millwork companies in the CMM that stand out with over 100 employees each.
Groleau in Belœil has a staff of 325 employees manufacturing hardwood flooring and Uniboard
Surfaces (200 employees) in Laval, a subsidiary of Uniboard Canada, manufactures laminated
flooring. Next is Sefina Industries (160 employees), in Saint-Laurent, which manufactures doors
and windows as well as interior wood trim and Colonial Elegance in Montreal (100 employees),
which manufactures stairs.
Prefabricated homes and buildings — In the prefabricated wood homes and buildings sector,
only one company has more than 100 employees: Industries Bonneville, in Belœil, with a staff
of 120.
Other construction products — There are two companies that stand out within the CMM:
Industries Hamelin in Boisbriand, with 120 employees manufacturing wooden spools and reels,
and Seatply Products in Saint-Laurent, with 100 employees, which manufactures moulded
plywood as well as seats and backs for chairs and sofas.
Development Factors
Construction Timber
Research
Forintek, Canada’s Wood Products Research Institute, has two centres – one in Quebec City and
one in Vancouver. Forintek was established in Montreal in 1914 in temporary quarters at McGill
University. At the time, it was known as Forest Products Laboratories. The Quebec government,
which has been a partner of Forintek since 1986, has recently awarded the institute a $720,000
grant to continue its research in improving wood product manufacturing processes, such as
wood seasoning (drying), sawmilling and protection.
Other researchers are not as interested in sawmill efficiency as in developing new, less energyconsuming construction technologies. In Montreal, there is Concordia University’s Centre
for Building Studies – the only one of its kind in Canada. The Centre carries out research on
acoustics, light, air quality, heating, natural ventilation, renewable energy sources as well as wind
load on buildings.
Sadly, the Centre d’études et de recherche pour l’avancement de la construction au Québec (Quebec
research centre for advancements in construction – CÉRACQ), an issues table that also performed
experiments and R&D, closed its doors at the turn of the 21st century.
Financing
Aside from traditional sources of financing, GE Capital Canada Equipment Financing also offers
targeted loans for construction companies seeking to purchase equipment or real estate.
Alter Moneta is a financial institution created as a result of a partnership between the Caisse
de dépôt et placement du Québec and the National Bank of Canada. The company specializes
in industrial loans through lease financing. The company’s head office is in Longueuil, and has
additional offices in Ontario and New York State. It mainly deals with purchases of concrete
mixers, tractors, bulldozers and other heavy construction equipment.
The insurance brokerage firm, Willis Canada, which has an office in Montreal, offers risk
management services to construction contractors. Tools offered by the firm include advisory
services on how to find more flexible financing solutions and on better managing the company’s
human and physical resources.
Finally, the Fonds de solidarité FTQ, financial partner of several projects in Quebec, is also very
present in Montreal, with a Vice President responsible for the construction and real estate sector.
And the SGF may invest in development capital in partnership with the private sector.
Construction Timber
Training
In Montreal, the Centre technique de Montréal technical centre offers courses in architecture
and industrial design. At the Cégep level, Vieux-Montréal offers a diploma in interior design
and another in building renovation and supervision. Collège Ahuntsic offers attestations of
collegial studies (ACS) in building construction, buildings and structures, as well as in building
renovation and supervision.
Bois-de-Boulogne and Lévis-Lauzon Cégeps offer training courses in residential construction
management for people seeking to obtain a permit as a general contractor, and André-Laurendeau
Cégep offers an ACS in building construction.
At the university level, McGill, Concordia and École Polytechnique all have civil engineering
programs, while the École des technologies supérieures (ÉTS) offers programs in construction
engineering.
Forintek also offers training resources to member businesses, as well as a correspondence course
on sawmilling.
Associations
The main wood processing industry associations have their head offices in Quebec City.
However, the Quebec Pallet and Container Manufacturers Association is located in Laval and
the head office of the Association provinciale des constructeurs d’habitation du Québec (Provincial
association of home builders) is in Anjou. In Montreal, we have the Association de la construction
du Québec (Quebec construction association) and the Commission de la construction du Québec
(Quebec construction commission).
Industry Canada has also created the Trade Team Canada Building Products, whose mission is
to share information on target markets, business opportunities, trade missions, trade shows and
matching events with business members of the Team Canada network. The federal ministry also
has a business service centre in downtown Montreal.
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Interregional Links
Interregional Links
Elsewhere in Quebec
The wood products industry, in particular the pulp and paper, printing, publishing, furniture
and construction timber sectors, represent 10% of all jobs in Quebec. The CMM is home to
more than half of these jobs, and over 40% of all industry businesses, the main one being AbitibiConsolidated, Domtar and Norampac in production, Johnson & Johnson and Emballages
Standard Paper Box in manufacturing and Quebecor World in printing. The other regions in
Quebec have productive and innovative primary and secondary sectors, thereby contributing to
the industry’s competitive edge.
Pulp and paper – An extensive sector
Mills in the rest of Quebec generally produce pulp and certain paperboard products in forest
areas such as the Laurentians, Outaouais, Abitibi-Témiscamingue, Mauricie, Saguenay–LacSaint-Jean and Côte-Nord regions. Primary wood processing is most often performed close to
the primary resource, which is quite far from the CMM.
Over two-thirds of towns in the corridor that exists along the Saint Lawrence River have at
least one mill, while 8 out of 11 towns have several (Hull, Lachute, Montreal, Drummondville,
Kingsey Falls, Trois-Rivières, Quebec City and Matane).
Along the north shore of the river, there are mills in the Outaouais region (Masson, Thurso,
Lachute), in the North Shore area of the CMM (Saint-Jérôme), in Lanaudière (Crabtree, Joliette),
in Mauricie (Louiseville, Trois-Rivières, Shawinigan, Grand-Mère), near Quebec City (Portneuf,
Saint-Raymond, Pont-Rouge, Quebec City, Donnaconna, Limoilou, Beaupré) and in Eastern
Quebec (Clermont, Baie-Comeau, Port-Cartier).
On the river’s south shore, mills are found in Montérégie (Vaudreuil, Beauharnois, Candiac,
Chambly), in the CMM itself (Montreal, Laval), in Bois-Francs (Drummondville, Victoriaville,
Kingsey Falls) and in the Lower Saint Lawrence region and the Gaspé Peninsula (Cabano,
Rivière-du-Loup, Matane).
As part of a larger $80-million project, the province is currently trying to consolidate all pulp
and paper research and training activities offered by the Université du Québec à Trois-Rivières
(UQTR) and Cégep de Trois-Rivières. Besides transferring the assets the two institutions, the
new Centre intégré en pâtes et papiers (Integrated centre for pulp and paper – CIPP) in TroisRivières will also receive equipment from Groupe Laperrière Verrault and a $23 million grant
from the Quebec government.
The future of paper in Mauricie — The region is quite active in the “added value paper and
associated technologies” niche, which has enabled it to develop products based on new fibres,
to manufacture a type of paper with high added-value and to transfer new technologies
for commercial use. Mauricie has world-class prime contractors and a large number of subcontractors. The region also benefits from the presence of the Centre de recherche en pâtes et
papiers (Pulp and paper research centre – CRPP), the UQTR’s Centre d’excellence sur l’utilisation
optimale des copeaux de bois dans les procédés papetiers (Centre for excellence in the optimal use
of wood chips in paper production processes), which also has a Chair on value-added paper,
the Centre international de couchage (International coating centre – CIC) in Trois-Rivières
Interregional Links
and the Laboratoire des technologies électrochimiques et des électrotechnologies (Laboratory of
electrochemical and electrotechnological technologies – LTEE) in Shawinigan. With the Accord
program, Mauricie is well set to become a “leader” in the field.
The Accord (Action concertée de coopération régionale de développement) program was created
jointly by the Société générale de financement (SGF) and the Ministry of Economic and Regional
Development and Research (MDERR). The program aims to establish a regional production
system that is competitive in both North American and world markets, by identifying and
developing preferred markets of excellence in each region that can become those regions’ mark
of distinction.
Centre-du-Québec opts for specialized products — Under the Accord program, the Central
Quebec region intends to explore the “emerging niche” of “decor paper and specialized paper.”
Decor paper is mainly produced for the furniture and reconstituted wood, while specialized
paper is used for specific technical applications, such as photography paper and paper used for
digital imaging.
Drummondville is one of the main centres of the North American décor paper industry. The
region has also developed substantial expertise in specialized paper thanks to the previously
mentioned modern infrastructures in Mauricie.
Laurentides: Wide diversity of tree stands to be developed — The Laurentians is considered
to be a “key partner” in the “mixed forest use and processing — value-added products” niche
under the Accord program. The area focuses its strengths on the development and integration
of forest management R&D, marketing, distribution and primary processing activities, as well
as workforce training and regional business networking. The region enjoys a wide diversity of
tree stands as well as a well-developed road system providing access to major U.S. and Ontariobound highways.
Outaouais – Leader in hardwood processing — This region is considered a “leader” in the field
of “hardwood production and processing” under the Accord program. The region stands out in
this field for its well-developed forest industry, the availability and quality of its natural resources
and the presence of a large labour pool. It ranks fourth in North America in terms of location
quotient in its industry.
The region also benefits from the presence of organizations promoting the sector, such as the Plan
d’action Forêt Outaouais (Outaouais forest action plan), the Agence régionale de mise en valeur
des forêts privées de l’Outaouais (Outaouais regional agency for private forest development),
the Corporation de gestion des forêts du Pontiac (Pontiac forest management corporation) and
the Institut québécois d’aménagement de la forêt feuillue (Quebec institute for hardwood forest
management).
Côte-Nord – A solid base and sought-after product — Under the Accord program, the CôteNord region is considered a “key partner” in the “Boreal forest use and processing” niche. It has
ten major sawmills (representing 11.29% of Quebec’s softwood lumber production), 32 small
sawmills, several secondary processing mills, businesses specializing in the development and
management of forest resources and one pulp and paper mill. Black spruce and balsam fir, found
locally, have highly sought-after characteristics.
Research is carried out by the Centre d’enseignement et de recherche en foresterie de la Côte-Nord
(Côte-Nord centre for forestry research and teaching) and the Carrefour de recherche et de
Interregional Links
développement forestier de la Côte-Nord (Côte-Nord forum forestry research and development).
There are also several high school and Cégep-level programs offered in forestry.
Nord-du-Québec promotes cogeneration — The Northern Quebec region is considered
a “leader” in the “cogeneration, reuse of forest waste and primary wood processing” niche.
Cogeneration is defined as the simultaneous production of electricity and other useful thermal
energy (such as steam, hot water or combustion gas) from the same fuel source (e.g. natural gas,
wood chips). The area contains twenty sawmills, two cogeneration plants (steam and electricity),
one pulp and paper mill and one engineered lumber mill, providing employment for nearly
2,200 people.
Although it does not have an R&D centre, the region is home to one of the most technologically
advanced sawmills in Canada. Furthermore, the proximity, quantity and specific characteristics
of its resources make the Northern Quebec region highly attractive in terms of forest
development.
Furniture – An export sector
The Montreal region is home to 27.3% of all furniture industry businesses in Quebec (which
includes 38.7% of Quebec shipments and an even higher proportion of large businesses). This
percentage is considerably lower than its demographic weight would imply.
Regions that stand out are Montérégie (14.8%), Chaudière-Appalaches (12.5%) and Centredu-Québec (9%). The Chaudière-Appalaches region produces 19.8% of Quebec shipments and
Montérégie produces 13.29%. With two industry leaders – Dutailier for residential furniture and
Lacasse for office furniture – the town of Saint-Pie de Bagot, near Saint-Hyacinthe, is a classic
example of this highly decentralized sector, which is focused on exports to the United States.
The CMM has 39 businesses operating in the upholstered furniture segment, which is not as well
represented in neighbouring regions, where Central Quebec and Montérégie each have about
ten, while Mauricie, Lanaudière and the Laurentians have about two or three each.
Lanaudière – Furniture export champion — Located close to Montreal, the Lanaudière region
has plenty of ports and airports as well as major roads that make it easy to export furniture. This
is a key activity for the region, as 74% of its production is sold elsewhere in Canada or to the
United States. The region’s flagship store, Jaymar Furniture (Shermag), has 305 employees.
The region is home to the Cité industrielle et internationale de Terrebonne (Terrebonne international
industrial park) and four industrial parks in the Joliette regional county municipality. Training
is provided by École polyvalente Pierre-de-Lestage comprehensive high school, the Centre
professionnel des Moulins (Des Moulins professional training centre) and the Lanaudière regional
Cégep. Under the Accord program, Lanaudière is therefore considered to be a “key partner” of
the Montreal region in the “Furniture — Secondary and tertiary processing” niche.
Chaudière-Appalaches – Furniture and upholstery of all kinds — Along with Central Quebec
and Lanaudière, the Chaudière-Appalaches region is seen as a “key partner” of Montreal in the
furniture niche. The region produces mostly residential and institutional furniture (for schools,
hotels, restaurants and other public institutions) as well as office furniture and accessories. There
are 71 furniture companies, of which 75% have fewer than 50 employees (approximately 3860
employees in all, or 2% of the region’s employment).
Interregional Links
The main businesses are AP Industries (330 employees), South Shore Industries (515), Meuble
Idéal (255), Le Meuble Villageois (234), Meubles Morigeau (216), Scotstown Div. of Shermag
(204), Laurier Furniture (170), Teknion Roy & Breton (123) and Meubles Beaucerons (120). The
region benefits from a skilled labour pool, a good transportation network, a strong capacity for
innovation and proximity to the American market.
Under the Accord program, the Chaudière-Appalaches region is perceived as a “leader” in the
“Wood Finish and Imitation Wood Products” niche. This includes treated wood for outside
use, siding, decorative elements, mouldings, door and window components, floor covering and
furniture. The region is home to about 200 businesses in the field, of which 71% have fewer than
50 employees.
The largest companies are: Bonneville Windows & Doors (509 employees), Donat Flamand (440),
Maibec Industries (403), Boa-Franc (350), Laflamme Doors and Windows (335), Daaquam
lumber manufacturer (275) and Matériaux Blanchet (220). The industry represents 4.4% of
regional employment or close to 8,600 jobs.
Construction timber – A major sector outside the CMM
Abitibi-Consolidated, the largest company in the industry, operates 24 mills in Quebec, all outside
the CMM. Of these, 17 are sawmills, which makes it the sixth-largest lumber producer in North
America. Tembec ranks tenth, with seven mills in Quebec, six of which are sawmills.
Uniboard Canada, with four particle board mills in Quebec, is the fourth-largest producer of
medium-density fiberboard (MDF) panels in North America. Tafisa (325 employees), in LacMégantic, is the sixth-largest particle board producer and Norbord (Tembec), with four mills in
Abitibi, is the ninth-largest MDF panel producer in North America.
The only private wood products research centre is Forintek, in Quebec City. Its mission is to help
the forest products industry optimize manufacturing processes, extract the maximum value from
available raw materials and meet the expectations of clients in terms of product performance,
durability and cost.
The leader in the processed wood and sawmills niche is Saguenay–Lac-Saint-Jean, thanks to
its accessibility to the required resources and the presence of businesses specializing in the
manufacture of wood processing equipment. The region has a well-developed training network,
with the Université du Québec à Chicoutimi, two Cégeps and a professional training centre.
Centre-du-Québec opts for milled wood — The Centre-du-Québec region is also considered
to be a “key partner” of the Montreal region in the “Furniture and Milled Wood” niche, which
accounts for 100 businesses and close to 6,000 jobs in the area. Region specialities include
products such as veneers, mouldings and wood components, coffins and cabinetry. The region’s
proximity to a specialized industrial pool and the presence of the École du meuble et du bois
ouvré (Quebec school of furniture and milled wood – EQMBO) and the Victoriaville Centre
d’aide technique et technologique EQMBO-Entreprises (EQMBO business centre for technical
and technological assistance) also help strengthen the region’s position.
Interregional Links
Abitibi-Témiscamingue captures the market in self-help housing — Under the Accord
program, the region is considered to be “leader” in the “Wood Construction Systems” niche, as a
result of the convergence of the engineered wood, panels, prefabricated systems and lumber subsectors. This is because of the growing trends in self-help housing and the increasing demand
for engineered wood. Businesses such as Tembec and Norbord in part help ensure the secondary
and tertiary product distribution system.
Estrie – A privileged position in an integrated industry — Estrie considers itself a “leader” in
the “Imitation Wood and Composites” niche. That said, at the time of writing, there has been no
agreement made under the Accord program.
The region benefits from its geographic proximity to the United States and is less affected by the
surtax on softwood lumber, due to the large number of border companies that are jointly run by
both Canadian and American nationals. This is the only region with mills in all activity sectors,
which demonstrates to what extent the local industry is truly integrated.
Printing and publishing – A divided sector
As mentioned, the printing and publishing sector is extremely fragmented, with only 3% of
businesses having 100 employees or more, leaving synergies considerably reduced. This allows
two groups – Quebecor World and Transcontinental Printing – to carry out approximately 50% of
Quebec’s production in this field. These large groups are also responsible for the nearly constant
mergers and acquisitions that characterize the sector.
The sector’s SMBs rarely have the means to grow by purchasing other businesses. The more active
among them try to solidify their position through specialization and technological innovation.
Businesses in the CMM and – to a lesser extent – those in the Quebec City area tend to dominate
the market.
In terms of training, the Beauce-Appalaches Cégep offers a diploma in Printshop Management
Techniques. Meanwhile, the Sainte-Foy, Sherbrooke and Rivière-du-Loup Cégeps offer a diploma
in Graphic Design. Laval University also offers a Bachelor’s degree in Graphic Communication.
Perceptions
Relational Assets
Relational Assets
Going Beyond Traditional Impulses
The entire cluster of wood and wood derivative products is characterized by the coexistence of two
very different groups of stakeholders in each sub-cluster: a few large companies and numerous
SMBs. The latter generally demonstrate a substantial amount of individualism. Encouraging
intra-sectoral relations would be a good starting point in trying to bring the advantages of
industrial cluster processes to these mature sectors.
Encouraging dialogue on all levels
Below are several concrete examples of areas where improved dialogue between the various
cluster stakeholders appears to be needed. In all the sub-sectors, comments from the various
professionals and experts interviewed displayed considerable overlap. They spoke of “a tradition
of individualism,” “a culture of every man for himself ” and “a fairly closed environment, where
members jealously guard their strategic plans and vision.”
Enough said. The players remain unconvinced and even unaware of the advantages of stronger
intra-sectoral relations. While businesses are now being passed on to the next generation, with
some early positive signs of change as a result, the sector remains ripe for advocates of business
networking and strategic alliances to do their work.
Promoting the creation of professional pulp and paper associations
There is no professional association for paperboard or converted paper manufacturers (such as
paper bags, cups, etc.), although their production has become a major link in the city’s industrial
chain.
The success and excellent organizational skills of market leaders such as Cascades merely serve
to hide the disparity among sector players, who are confident in their individual strengths as
entrepreneurs but who would benefit from the creation of a network for meetings and dialogue
– a necessary ingredient in establishing a group dynamic.
These professional associations could promote a strategic reflection process adapted to each subsector. As the paperboard and packaging industries often include printing activities, the highly
active Comité sectoriel de main-d’œuvre des communications graphiques du Québec (Quebec
graphic communications Sectoral Workforce Committee) would gladly assist in employment
and training activities for these two fields.
However, the industrial logistics of the paperboard and packaging sectors is not the same as
that of printing in general. Encouraging the creation of a professional association encompassing
these two sectors would make it possible to provide them with economic analyses tailored to
their own needs.
Relational Assets
Keeping SMBs informed
The existence of major paper mills and printing giants tends to make people forget that the
sector is first and foremost a world of SMBs. While the major players have the size and the means
to easily stay afloat, small businesses, determined as they are to survive, lack potentially useful
information – often without even knowing it. To improve their performance and survive in the
long term, we will need to make it a goal to provide them as much information as possible.
As noted by the Canadian Printing Industries, while the printing sector may be the top
manufacturing employer in the country, it is still dominated by SMBs, with 75% of its businesses
having fewer than 20 employees. Among paperboard and converted paper manufacturers, there
are proportionally fewer small businesses, but there also appear to be fewer opportunities for
dialogue and exchange than in the printing sector.
Fostering meetings and exchanges
Many people interviewed who had had the opportunity to observe Accord project meetings,
mentioned the positive aspects of this approach, where people from the same sector, who had
previously not been in contact with each other, met and discussed various issues and points
of view – often for the first time. The dynamic discussions led by some, especially those of the
younger generation and other natural leaders had a positive effect on the group and its motivating
drivers.
Opening up new fields of research
Developing research on recycled fibres and paperboard – Traditionally, the main research
efforts in Canada focus on softwood fibres and its uses. The hardwood, recycled fibre and
paperboard sectors are under-represented or not represented at all in research led by institutional
organizations. With respect to paperboard, Cascades dominates the sector and conducts its own
mixed research activities ranging from fundamentals to products, leaving other paperboard and
packaging industry players with no research support to help them remain competitive.
Developing research on furniture – This is a field that has not, up until now, interested researchers.
Given the overall strength of the furniture sector, developing research on its primary input factors
would be a useful investment. Sector stakeholders would also like to see the development of a
design-oriented reflection process, even if that is not what is usually meant by “research” in the
industrial world.
Improving dialogue between businesses and researchers
Everyone interviewed stressed, to varying degrees, the difficulties involved in maintaining
dialogue between businesses and researchers. Business leaders criticised university research
centres for being cut off from the realities of the business world.
Business people often use the term “research” when what they are really thinking of is “innovation.”
If they are seeking to improve their processes, they are often tempted to “shop around” for new
technologies that are already available rather than support a project from start to finish, which
means waiting until it is ready to market. Most often, however, they prefer to find a new product
that they can market quickly.
Relational Assets
Small and medium-sized businesses have little or no means to devote to research. Meanwhile,
large companies – and this is particularly true for pulp and paper businesses – are doing less and
less research in-house.
In this context, universities appear to be in a privileged position, as research is a natural part of
their function. However, universities have a tradition of fundamental research, and even though
they have made great strides in bringing themselves closer to businesses (as they are constantly
seeking private funds to support their projects) there is still a gap between the two visions, which
inevitably leads to a sense of mutual dissatisfaction.
Managing an image problem
The various sectors of the cluster all suffer from an image problem. Except for a few sectors of the
printing industry (e.g. graphic design software, digitization), which have attracted the interest of
many young people, most of them feel that jobs in these industries involve hard labour in a noisy,
dirty environment.
The fact that this image is no longer accurate, given the changing technology in the various sectors
(widespread computerization, precision monitoring, etc.), does not make much difference. The
cluster has not succeeded in creating the necessary “relational assets” that would enable it to
attract young people, which seriously affects employment (see Strategic Elements).
Promoting better relations between suppliers and product manufacturers
Dialogue between forest managers, sawmills and fibre producers on the one hand and converted
product manufacturers – either paperboard or furniture – on the other, has never been easy.
However, these relationships are considerably better today than they have been in the past.
It would be worthwhile to continue along this vein. Dialogue between the various sectoral
players — from furniture manufacturers to forest managers — would make it possible to ensure
supply stability and synchronization with industry needs. Rapid development in certain Asian
countries is already affecting access to fibres, especially with respect to recycled paper, where
China has cornered a growing part of the market. As time goes on, the need for joint action can
only increase.
Strategic Elements
Strategic Elements
Product Differentiation and Innovation
This portion of our analysis reveals the same division into two very distinct groups: large
companies and SMBs. However, even industry giants, which operate on a volume scale, have
their own product differentiation policies and try to stay ahead of their competitors through
innovation.
Working towards product differentiation
The various specialists interviewed are relatively unanimous in their descriptions of the major
strategic orientations for the sector. They differentiate between the larger players and the other
stakeholders. The former are able to influence prices and ration their operating costs as much
as possible in order to strengthen their margins. Those who are restricted to following market
prices also curb their costs as much as they can, and try to gain on volumes.
The entire sector aims to develop value-added products. This trend extends even to newsprint,
among other items, with noticeable developments in specialized paper production, and
paperboard and converted paper manufacturers continually coming out with new products.
Maintaining a level of constant innovation
Of course, there is only so far that paper mills can go in terms of innovation, as they often have
no choice but to maintain the status quo. However, comments from this sector echo those of
many in the other sectors: innovations in manufacturing processes are welcomed for improving
productivity, while product innovations (as we will see in the next section) are perceived as the
main avenue for growth.
Developing the “Just-in-time” approach
This is where those interviewed demonstrated varying positions. Those for whom it was
commonplace tended to consider the approach old hat, and that it was no longer a problem.
Others saw the value in it, but were afraid of not having the means to get into it. It appeared that,
given the wide diversity among the sector’s SMBs, a “Just-in-time” approach and a reorganization
of production processes should continue to be on the front burner of concerns among those in
charge of increasing the vitality of the cluster, if they wanted to improve its productivity.
Developing management and marketing know-how
Many people contacted indicated that business leaders often had better manufacturing skills than
management or marketing know-how. This was mainly the case with small family businesses.
However, observers agreed managers were generally better today than twenty years ago.
Supporting specialized training
While the training available today is fairly solid overall in the pulp and paper and printing sectors,
there is a lack of training programs especially designed for paperboard and converted product
manufacturers in general.
Strategic Elements
Similarly, the furniture industry complains that there is still not engineering training available
to them. It would also like to see design integrated into furniture education as it contributes to
the series renewals by heightening the fashion effect. Furniture is the sub-cluster most subject
to complaints by entrepreneurs having difficulty finding qualified workers. Rightly or wrongly,
they feel that training establishments still focus too much attention on churning out cabinet
makers, rather than the specialized technicians they need.
Preparing the next generation
Massive retirements have not yet hit businesses, but they have caused concern with respect to
difficulties in ensuring future replacements. These concerns are linked to the sector’s image
problems, which have an effect on the training programs that young people are attracted to.
Upgrading and modernizing paper mills
Major pulp and paper mills grew up in the “resource region” mentality, applying the classic “Cash
Cow” model popularized by the Boston Consulting Group in the 1960s. Today, this is generally
considered an out-dated industrial tool. Upgrading these mills to continue with traditional
production output – which has often become just another commodity that can be manufactured
more cheaply elsewhere in the world – is not necessarily an attractive option for paper mills.
It is possible, however, to modify a mill’s production facilities to produce value-added paper.
That is what Kruger did for its Wayagamack mill, with the final results being doubled daily
production and an increase in the number of employees. Public watchdogs could encourage this
type of conversion wherever possible, thereby helping to protect the local economic fabric.
Attracting paper production equipment suppliers
Although it is the fourth largest producer of pulp and paper in the world, Canada has only one
major industry equipment supplier, G&LV. Attracting and supporting the activities of equipment
manufacturers and suppliers could be a good move, strategically, as a main source of innovation
(along with the chemicals industry) in pulp and paper mills.
Creating a Sectoral Workforce Committee for pulp and paper
It may seem surprising, but there is no Sectoral Workforce Committee for the pulp and paper,
paperboard and converted paper product manufacturing industries.
Helping SMBs work with paper mills
SMBs that could provide equipment and innovations to pulp and paper mills need to have
one obstacle in particular to overcome. The innovation cycle for this sector is extremely long,
occasionally up to ten years. Most SMBs do not have the means to wait for their products to
go through all the intermediate stages before becoming marketable, which is a barrier to the
development of sub-contractors. Some equipment suppliers – speaking naturally for the benefit
of their field – would like to see government assistance offered to pulp and paper mills, so that
they would be more amenable to stopping a machine or two to allow testing to be carried out.
Strategic Elements
Acquiring cutting-edge printing technologies and equipment
Innovation and research fall not so much under the responsibility of printers but rather machinery
and ink suppliers. Every four years, they gather in Düsseldorf to attend an, enormous trade fair
that will determine industry trends for the next four to eight years.
The most recent fair was held in May 2004. The most active innovation occurs in the field of
pre-press. There is little change in terms of rotary printing, but the growth of offset sheet-fed
printing shows no signs of slowing down.
According to industry experts, digital printing will be a major factor in the next twenty
years. Market “newcomers” such as Xerox and HP are joining the field alongside traditional
manufacturers such as Heidelberg.
Avenues for Growth
Avenues for Growth
Niche Market or Delocalization?
Niche markets are the logical next step in a product differentiation policy. All cluster stakeholders
are working to secure their business relations as much as possible, by offering specialized products
to specialized markets. This market policy inevitably leads these businesses to the problem of
delocalization, which has become a major obstacle to growth.
Melding niche markets and innovation
Innovations in the product field, as mentioned earlier, affects the vitality of businesses in their
markets. Paperboard and converted product manufacturers operate on regional markets (which
may include a portion of the United States), while furniture producers often ship to far-off and
more diversified destinations.
Without a professional association or a Sectoral Workforce Committee, there can be no “collective
discourse” on the importance of innovation in the pulp and paper and converted product
industries. Meanwhile, the reflection and debate processes are well entrenched in the furniture
sector, mainly thanks to the work of the Quebec Furniture Manufacturers’ Association.
The growth conditions that the QFMA insists upon seem to be applicable to a large number of
SMBs within the cluster. The Association would like to focus on the ability of businesses to pursue
its niches of excellence, while targeting higher-end products. SMBs need to take advantage of the
flexibility that their size and organizational structure affords them to gain rapid turnaround.
They need to stand out from products currently available on the market and to free themselves
from having to compete over price. “The key,” says Jean-François Michaud, QFMA President
and CEO, “is innovation on all fronts, in design as well as in production.”
Delocalizing where necessary
Delocalization of a portion of a business’ activities is the result of the arrival of products from
other countries – mainly China – on the market, and the attraction of cheap skilled labour in
developing countries (such as India for IT and call centres).
Those interviewed were eager to address the issue of China as a threat. Many repeated several
times that we were underestimating the impact China would have in the future. Furniture industry
stakeholders have travelled to Asia to gauge what to expect. According to some, what they found
completely changed the way they saw their industry. They were however more discrete about the
activities they sub-contract to Asian and Latin American countries. The threat to Canadian jobs
– and loss thereof – as a result of delocalization makes it a delicate subject.
A third category of business owners decided to take the idea of delocalization to its fullest extent.
An excellent example of this is Touch Industries. Although its head office is in Sherbrooke, the
company manufactures its paper matches in China. For company President, Gervais Morier (Les
Affaires, August 21, 2004), the strategy of choosing which activities to sub-contract to developing
countries may be somewhat passé. He says that sub-contracting a portion of his production to
China enabled his company to remain at the same level as his competitors. However, in order
Avenues for Growth
to get ahead of the competition, he decided to have everything manufactured there. Touch
toothpicks, coffee stirrers and skewers are all made in two Chinese plants that together employ
300 people. The company’s sixteen other employees work in Sherbrooke, at the head office and
in the warehouses.
These are three possible approaches to the issues of delocalization and competition, but all have a
major impact on the vitality of the clusters. If this trend continues, geographical factors will have to
be revised. Paradoxically, the agents of the knowledge economy – i.e. the brains behind the works
– are those who remain here, dependent on the cluster’s physical environment, advantageous or
otherwise. With Touch Industries, its production activities no longer depend on it at all.
Banking on exports
A similar logic can be applied to all cluster activities as a whole. With the exception of commodities
aimed at the local market and protected from imports by their value or volume (such as toilet
paper), the cluster’s industries are all turning towards value-added products, for which the local
market does not always offer a sufficiently large outlet.
The more companies continue to seek a competitive advantage in product quality or originality,
the more important it will be to find markets outside the CMM or even the province. Encouraging
companies to innovate therefore means we also have to help them export.
Appendices
Appendices
Sources
Studies
L’industrie des produits forestiers au Québec, Gros plan sur les forêts. [The Forest products industry
in Quebec: Highlights on the Forests] MRNFP, 2003.
Gros plan sur Montréal : Les forêts. [Highlights on Montreal: Forests] MRNFP, 2003.
Canada’s Paper Product Industry: Industrial Outlook. Conference Board of Canada, August
2004.
Forestry and Sawmilling
Le marché de l’emploi dans l’industrie forestière. [The Forest Industry Job Market] Emploi-Québec,
Outlook 2003 to 2007.
Profil des produits forestiers, deuxième transformation. [Profile of Secondary Forest Products]
CRIQ Report, November 2003.
“Un souffle nouveau” [A New Wind]. Quebec Forest Industry Council. Fibre expression, Vol. 1,
No. 1, 2003.
“L’industrie forestière et les régions du Québec” [The Forest Industry and Regions of Quebec].
Fibre expression, Vol. 1, No. 3, 2003.
Guide : Cycle de vie des produits forestiers, [Guide: Life Cycle of Forest Products] MRNFP, May
2003.
The Forest Industry in Canada. Forest Products Association of Canada, 2002.
Pulp and Paper
Profil de l’industrie Pâtes et papiers en Mauricie [Profile of the Pulp and Paper Industry in
Mauricie], Emploi-Québec. Mauricie, François Hallé, 2000
L’industrie des pâtes et papiers : bilan et perspectives [The Pulp and Paper Industry: Overview and
Outlook]. Pulp and Paper Products Council, 2004
Tendances de l’industrie des équipements pâtes et papiers [Industry Trends in Pulp and Paper
Facilities]. Samson Bélair Deloitte & Touche, 2003.
The Outlook for the Canadian Pulp and Paper Industry in 2000. FPAC, January 2000.
Map of Quebec’s Pulp and Paper Mills. Pulp and Paper Technical Association of Canada, 2004
Appendices
Taking Pulp and Paper Further: What we make, how we make it, and where we sell it. FPAC,
2004.
Printing
Diagnostic de main-d’œuvre et de développement industriel [Labour and Industrial Development
Diagnostic]. Comité sectoriel de main-d’œuvre des communications graphiques du Québec,
Mars 2004
Répertoire des formations au Québec [Directory of Training in Quebec]. Comité sectoriel de
main-d’œuvre des communications graphiques du Québec, 2003
Profile 2002, Industry Canada (Innovation), Commercial Printing Industry
Profile of the printing industry in Canada, CPIA, 2003
Furniture
Portrait de la fabrication du meuble au Québec et Stratégie de développement [Portrait of Furniture
manufacturing in Quebec and Development Strategy]. UQAM, 2002
Diagnostic des besoins de main-d’œuvre dans le secteur des portes et fenêtres, du meuble et des
armoires de cuisine, 2002-2003 [Diagnostic on labour needs in the doors and windows, furniture
and kitchen cabinets sector]. Comité sectoriel. August 2003
Eléments de problématique de la main d’œuvre en emploi, Meubles et articles d’ameublement
[Workforce Issue Factors in Furniture and Furnishings Employment]. Emploi-Québec, 20042005 Update.
The Residential Furniture Industry in Canada, Industry Canada, March 2004
L’industrie québécoise du meuble depuis l’entrée en vigueur de l’ALÉ [The Quebec Furniture
Industry Since the Start of the FTA], MDERR, September 2000.
Appendices
Websites
Canadian Printing Industries Association – http://www.cpia-aci.ca
Association des arts graphiques du Québec (AAGQ) – http://www.aagq.qc.ca
Pulp and Paper Technical Association of Canada – http://www.paptac.ca/english/layout/index.htm
Quebec Forest Industry Council – http://www.cifq.qc.ca/html/english/index.php
Centre de recherche en pâtes et papiers (CRPP), UQTR – http://www.uqtr.ca/crpp
Wood Manufacturing Council (WMC) – http://www.wmc-cfb.ca
Centre d’information et de valorisation du meuble (CIVAM) –
http://www.civam.qc.ca/Sites/Comite
Pulp and Paper Products Council (PPPC) – http://www.pppc.org/en/1_0/index.html
École québécoise du Meuble (EQMBO) – http://www.ecolenationaledumeuble.ca
Forintek Canada – http://www.forintek.ca
Ministère des Ressources naturelles de la faune et des parcs –
http://www.mrn.gouv.qc.ca/english/home.jsp
Paprican – http://www.paprican.ca/engl/index.htm
Technical Support from the Ministries Involved
François Rouleau, Department of Forest Products Industry Development, MRNFP
Individuals Consulted
Roger Gaudreault, Director, Research and Development, Cascades.
Hugues Simard, Vice President, Development and Planning. Quebecor World.
Martin Frappier, Project Manager, Comité sectoriel de main d’œuvre des communications
graphiques.
W. Robert Wood, Executive Director. Pulp and paper technical association of Canada.
Robert Légaré, Department of Forest Products Development. Ministère des Ressources
naturelles.
Jean-François Michaud, President and CEO, Quebec Association of Furniture Manufacturers.
Appendices
Denise Julien, CSRE Forêt, Hautes Laurentides
Michel Vincent, Directeur du service Economie et marchés. Conseil de l’industrie forestière du
Québec.
Pierre Gélinas, Vice-Président Technologie du papier. GL&V.
Patrice Gervais, Président. Meubles Dinec.
Gilles Dontigny, Vice-président Fabrication. Kruger.
Claude Daneault, Directeur. UQTR, centre de recherche sur le papier
Michel Deveault, Président. Canadel.
Stéphane Deveault, Coordinateur, veilleur. CIVAM.
René Réjean, Directeur. Ecole Québécoise du Meuble et du bois ouvré.
Claude Laperrière, Directeur général. CIPP.
Appendices
Credits
Editorial Director Michel Lefèvre
Research and Alain-Marie Carron
Copywriting
Research Assistants Jean-Pilippe Meloche
Charles-Albert Ramsay
Julie Ranger
Language Editing Frédéric Simmonot
Dominique Chichera
Graphic Design Pascale Detandt
Metropolitan Cluster Technical Committee
Michel-Marie Bellemare
Economist – Regional Policy,
Ministère du Développement économique et régional et de la Recherche
Daniel-Joseph Chapdelaine
Advisor – City Planning and Institutional Relations,
Ministère des Affaires municipales, du Sport et du Loisir
Yves Charette
Coordinator – Economic Development,
André Gagnon
Advisor – Industrial File Development,
Ministère du Développement économique et régional et de la Recherche
Michel Lefèvre
Advisor – Economic Development,
Christine Phaneuf
Advisor – Local and Regional Development,
Ramata Sanogo
Economist – City Planning and Institutional Relations,
Francine Rivard
Director – Regional Development Coordination,
Société générale de financement du Québec

Paper and Wood Products Cluster - Communauté métropolitaine de

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