In 2008, Jacques Cabana, saw change coming to his industry and instead of fearing it, he embraced it by completely changing the way he did business.
He ran an aerospace engineering firm between 2001 and 2008 and though he loved the work, he determined he could add a lot value for his customers if he could also manufacture parts after the engineering was done.
“So in 2009, I started FDC Composites, which is a manufacturing company with a complete engineering department and support,” said Cabana, the company’s president and CEO, of his Saint-Jean-sur-Richelieu-based company. “Essentially, I integrated the engineering and manufacturing. It was also obvious to me that the aerospace sector was evolving and to be successful, you had to go further downstream by assembling the parts, and doing everything down to painting and delivering them through a fully usable complete sub-assembly.
The business textbooks call it vertical integration; Cabana calls it common sense. He knew his customers were demanding more services and wanting to deal with fewer suppliers. So why not give them what they wanted?
“It’s called integration and that’s the direction where we’re heading,” he said. “You can go upstream to integrate the design and engineering and have what you call a full turnkey solution for your parts. That’s what we offer. I saw this trend coming and we invested many millions, along with time and energy in research and development, to have the technical basis to be able to do that,” he said.
His main business is composites — plastics that are reinforced by fibres. The product itself harnesses another trend: that aircraft builders want lighter and more durable components to improve fuel-efficiency and costs.
“Typically, an OEM (original equipment manufacturer) comes and says they have had a metallic part until now, but they now want composite because it weighs less and is more durable,” Cabana said. “We take either an existing part or one that we’re designing, go through all the certification, design the tooling, manufacture the parts, paint the parts, put the final components, such as metallic elements, and then we ship the integrated sub-assembly to the customer.”
He’s also invested heavily in another trend: automation, which is something his customers have embraced if revenues are any indication. Between 2014 and 2015, he saw a 24 per cent growth in revenues and he’s projecting between 25 and 30 per cent growth for 2016. When he launched in 2009, he had six employees; he now has 50, and 30 per cent of them are engineers and technicians. The ratio of engineers compared to others is much higher than most manufacturing companies, he said.
Although he can’t name them, he’s a first-tier supplier for mid-sized OEMs and interior finishing centres with about a dozen different customers. His export clients are in France, Brazil and the U.S. and, after a recent trade show in Hamburg, Germany, he has made connections with potential clients in the U.K., Germany and Mexico.
“I don’t look at the world with boundaries,” he said. “I just look for customers. Some years, up to 60 per cent of my sales are exports. This year, it will be 35 per cent.”
His work with EDC has included guarantees for his lines of credit, but he said he’s also received invaluable free advice from EDC experts.
“They’ve always given pertinent and interesting advice,” he said. “And they’ve put me in contact with a lot of people who’ve been very helpful all over the planet.”
1. What was your first export sale?
My first export sale was in France in 2009 with a division of a very large French conglomerate in the aerospace world.
2. How did that first export opportunity arise?
Through a trade show. We were doing a lot of research and development and we had some very innovative composite materials. At the trade show, I met this company and it was actually the very first customer for my new company.
3. When it comes to exports, what do you know now that you wish you knew then?
You don’t want to create boundaries or put limits on yourself, but be aware that with exports, it’ll take a lot longer. There are a lot of legal and tax implications and there are also cultural differences when you’re dealing with other countries.
4. How has the trading world changed since you started in business?
With the fluctuation of different currencies, the fluctuation of oil prices and the financial crisis of 2008 and 2009, the environment is much less stable and predictive. If a government decides it’s not going to buy as many trains, or whatever your product is, you’re out of luck.
5. What is the #1 thing new SMEs need to know about export and trade?
You have to look at exporting as an option that’s just as important or as possible as any domestic customer or business development option.