“We don’t do what we do without partnerships.”
It’s a familiar refrain of Scott Runté, president and CEO of Launch Lab, a regional innovation centre that pairs entrepreneurs with its team of experienced business owners in Eastern Ontario to help them grow and scale.
“Across our region, economic development partners have always been valuable partners for us because they are well connected in the regions they serve,” Runté says. “Right across Eastern Ontario, they have their finger on the pulse of companies and industries that are important in their region, companies that are growing and companies that are facing challenges.
One such fruitful partnership is with the St. Lawrence Corridor Economic Development Commission, an organization that was launched five years ago by a group of municipalities between Kingston and Cornwall. Its goal is to promote economic growth by attracting investment in the industrial and commercial sectors in this region.
“And through that attraction, we want to create quality jobs for Eastern Ontario,” says Charlie Mignault, who heads up the commission and who also serves as a member of the board of Launch Lab.
The Commission focuses first on attracting mature companies, often global ones, to Eastern Ontario. Its secondary focus is to help support high-growth firms that have scaleup potential. Mignault’s job includes helping scaleup firms identify possible capital, whether through angel investors, traditional banks or venture capitalists.
“I’m meeting with businesses to better understand their challenges and opportunities,” explains Runté regarding the complementarity of the two organizations. “When we meet with clients, we want to connect to partners such as the commission, because it has a mandate to identify programs and provide support to help clients grow and scale. The St. Lawrence Corridor Economic Development Commission is a valuable partner for us in understanding the industries and companies that are growing along the St. Lawrence River.
Mignault says he’ll often refer businesses to Launch Lab’s services.
“Both the Corridor and Launch Lab are actively supporting firms across the region; meeting with businesses, entrepreneurs and investors. The services we provide to clients is symbiotic; ultimately we are providing advisement and resources to enhance productivity and business growth.” Mignault says. “It’s very complementary. This week, I met an entrepreneur who needs to invest in some machinery and equipment to take that next growth step for his business so I’ve recommended some of Launch Lab’s advisory services.”
The commercial cable ecosystem in the area is one that has benefited from the services of both organizations and both appreciate the supply-chain integration that is part of that ecosystem, with cable producers such as Northern Cables and Prysmian as well as cable reel builders such as GanReel Manufacturing Inc.
Mignault says the GanReel story is a great one.
“There’s been so much disruption in the global supply chain since COVID that many of these manufacturers have reformed their supply chain from global to regional or local,” he says.
“One of the things we’ve focused on at the commission since COVID is identifying suppliers in the regional ecosystem so when variability or challenges occur, manufacturers have a local supply chain with local service providers to ensure their operations proceed without disruption. So it’s great to have companies growing such as GanReel in the area to support this cluster of wire and cable manufacturers.”
Eastern Ontario’s communication, energy wire and cable manufacturing sector is a dynamic one.
No. of jobs: 688
Five-year growth rate: 290 per cent
Sector revenues: $620 million
A wooden reel manufacturer GanReel Manufacturing Inc. that serves the strong commercial cable ecosystem in Eastern Ontario and has clients across Canada signed on to Launch Lab’s Amplify program to help it scale its business.
What started out as a sideline in response to a client’s query is now big business for GanReel, a company that had its genesis in the business of building wooden boats. When a gentleman approached owner Tom Conner in 1996 to ask if he thought he could produce wooden reels for the commercial cable industry, Conner replied, “Sure, why not?”
Today, the company now known as GanReel Manufacturing Inc. is part of a significant cable and reel ecosystem in Eastern Ontario. Now run by the late Tom Conner’s son, Jeff, the company operates in a 40,000-square-foot building in Gananoque and it’s adding another 5,000 square feet as part of a recent expansion project. Sales have more than doubled in the last year alone, and Conner is always looking for more employees to add to his roster of 30.
“It’s a huge challenge maintaining staff,” Conner says. “There’s no doubt about that. I mean, you see it all over.”
GanReel calls itself the “premier Canadian manufacturer of wooden reels.” It specializes in wooden and plywood reels as well as custom crating, boxes and skids. It currently supplies all the major customers in Eastern Ontario and beyond.
Conner isn’t sure why, but, in the past three years, GanReel’s customers’ businesses have grown significantly, but he’s pleased that his has alongside them. To manage the growth effectively, he approached the business experts at Launch Lab and joined the Amplify program, one that helps Eastern Ontario companies accelerate their growth and scale.
“When we approached Launch Lab, we were looking for funding to support our new expansion,” Conner says. “We had never been through an expansion of this size or magnitude, so we were looking for significant capital.”
Conner’s bank manager at RBC suggested he reach out to Launch Lab for help in making a convincing plan that would give the bank confidence in lending him the capital he needed.
Conner describes that outreach as “the best move we ever made,” and says he doesn’t think GanReel could have pulled off the expansion without the advice of Launch Lab’s entrepreneurs in residence guiding them through the process. RBC agreed to the business plan the team proposed and the expansion is now under way.
As a result, GanReel now has more space in its existing building and has undergone some renovations as it awaits the key part of the expansion — a newly automated equipment line.
“If all goes according to plan, it should arrive here early next summer,” he says.
Conner’s experience with Launch Lab was so positive, he decided to stay in the program, which means he meets regularly with his Launch Lab advisers.
“We meet with Launch Lab on a quarterly basis to conduct a quarterly business review, just to make sure we’re heading on the right track,” Conner says. “They always have some ideas that might help us move things along. We would have never been able to get to where we are without their knowledge and experience.”
Scott Runte, CEO of Launch Lab, says the company needed help understanding how to finance the purchase of the equipment that will drive automation and allow it to meet the demand it’s been seeing in the past few years.
“It’s a really great company and a great story,” Runte says.
Conner says his father, who retired in 2005 and just passed away in June, was thrilled by the growth in the business.
“He thought what we’re doing out here is just fantastic,” Conner says. “He was really excited about the expansion.”
Long-time exporter committed to Canada
Northern Cables was started by five engineers who lost their jobs when Phillips Cables pulled out of the region. Today, the company employs 275 people in Brockville and serves customers across Canada and in the U.S.
When Phillips Cables decided to leave Brockville in the 1990s, Shelley Bacon and six colleagues found themselves out of jobs, so they regrouped and five of them eventually started their own cable company in Brockville. Fast forward to 2021 and Northern Cables is celebrating its 25th anniversary.
Given that the group started the company with “no product, no facility, no machinery and no market,” it’s been a good run. Today it has 275 employees at three different manufacturing plants — one in Prescott and two in Brockville — that run 24 hours a day, seven days a week and produce 70 million metres of cable annually for the industrial and commercial markets in Canada and the United States.
Starting out, Northern Cables accessed services similar to the ones that today Launch Lab could have helped facilitate and further down the road, the company did indeed consult Launch Lab. But back in the 1990s, it found some local angel investors who were willing to take a chance on the engineers who were starting anew and who were willing to trade rent for some equity. After about three years of trial and error in running a business, and, later, an injection of capital, the team started turning a profit and the company has been growing ever since.
Bacon says the gentlemen who allowed his team to work rent-free in their building also brought some business sense to the operation and gave them advice on how to conduct themselves in this new world.
“They surrounded us and protected us from the bulls,” Bacon says. “It was an excellent relationship.”
These days, the latest project at Northern Cables is building a standalone medium-voltage plant to manufacture the kind of cables used to feed power into mines and feed power in remote areas.
Northern Cables’ principals have consulted with Launch Lab’s president and CEO, Scott Runté, as well as Charlie Mignault, commissioner of the St. Lawrence Corridor Economic Development Commission.
Runté commends Bacon and his team for recognizing 25 years ago that the cable industry wasn’t dead in Eastern Ontario and that Phillips’ decision to pull out was that of a multinational corporation, rather than an indictment of the prospects in this part of Ontario.
“This is an example of a company that has grown, expanded and invested in Eastern Ontario,” Runté says. “And they got started because angel investors supported them from the beginning.”
Runté also points to the fact that Northern Cables wants to grow its business in Canada and in Eastern Ontario to be specific.
For his part, Mignault sees Northern Cables in a “high growth – scale of phase of their evolution that’s investing in research and development and hiring people as fast as they can.
“I knew they were true entrepreneurs when they said, ‘Hey, this is still a great product. We know how to make it. We have the workforce and the training,” Mignault says. “And so they found some investors to come on board and support them. And it’s been an incredible success story for Eastern Ontario.”