Pelican is paddling downstream
Laval company is one of North America's largest pleasure craft manufacturers

You'd think that with an aging and increasingly obese North American population -- which spends most of its free time in front of the television -- that sporting goods manufacturers would be having a tough time. Not Pelican Industries.

The Laval based company produces canoes, kayaks and paddleboats for the recreational market, and business is booming.

"We've seen a big trend toward outdoor sports in recent years. People are more environmentally conscious and they want fresh air," said Christian Elie, the company's president, who co-owns Pelican with his brother Antoine. "Boating is also the perfect recreational activity for families that want to spend more time together, because it attracts people of all ages."

According to Industry Canada, approximately 25 million Canadians participate in paddle sports and Pelican Industries is getting a good chuck of those customers. The company's 215 employees will produce about 60,000 small pleasure craft during 2002, with sales of $28 million, up 7.7 per cent from the year before. That makes Pelican Industries one of North America's largest small boat manufacturers

The Elies have been in the small watercraft manufacturing business for most of their working lives. Pelican Industries is a family business, which their father Gérard bought in 1970. Among the firm's claims are the production of the world's first plastic peddle boat in 1970 and the world's first plastic canoe in 1971.

When the pair joined shortly thereafter, the company was producing less than $600,000 a year in sales. But business grew steadily throughout the 1970s and 1980s. The real growth spurt coming soon after the pair took over the business from their father in 1995 through a management buyout negotiated with their seven other brothers and sisters, none of whom are active in the business.

In early 1996, sensing a significant market opportunity, the Elies took a major gamble. They invested close to $3 million in new productivity enhancing production equipment, including a thermoforming machine, an extruder and an elevated granulator into which plastic pellets are fed. These pellets are melted, into plastic sheets and pressed into custom-made molds. The boats emerge almost fully formed.

"Price is a major selling point in our industry," Elie said. "So devote a lot of energy to being as efficient as possible and keeping costs down."

These timely investments -- partially funded by the Fonds de Solidarité FTQ in exchange for a small equity participation, -- led to annual compounded 30 per cent revenue growth throughout the late 1990s. But the brothers bought out their new partners as soon as they could afford it.

Another big move was the acquisition of the canoe manufacturing division of long-time competitor Coleman Company Inc. Thirty semi-trucks were needed to haul the equipment from Texas to Quebec, in a tangible demonstration of the pair's confidence in the province's competitiveness.

Pelican Industries' client base is comprised mostly of households with $50,000 a year or more in annual income, particularly cottage owners who are big peddle boat and canoe buyers. But recent growth has also spurred by a renewed push into the kayak market, which now comprises 20 per cent of sales.

To accommodate the increased business, earlier this year the Elies moved production into a massive new 185,000 square-foot custom-built state of the art manufacturing facility on Place Paul-Kane in Laval. The move is expected to generate significant productivity improvements, and greater organizational flexibility.

Although Antoine and Christian have a remarkably similar physical characteristics and mannerisms, and both have four kids, they claim to be quite different.

"We are a ying and yang team," Chistian Elie said. "I take care of the plant, and the technical details of managing a production line. He handles the sales and finances." On paper Christian is listed as president and Antoine as CEO, but in practice they make all major decisions together.

Although 85 per cent of Pelican Industries production is exported, mostly to big box retailers such as Costco U.S.A. and Wal-Mart, according to one distributor, the fact that the company's products are manufactured locally is a big selling point in the domestic market.

"They are recognized for the quality of their canoes and kayaks. But it also helps that they are Québécois," said Marc Lauzon, the owner of Bermarc Inc., a St-Jovite sporting goods retailer. Lauzon sells about 200 small craft a year, about a third of which are made by Pelican.

"Their after sales service is excellent," Lauzon said. "When there is a problem, they send a truck right away, fix it, and bring it back."

Yet the brothers have no intention of resting on their laurels. Industry Canada projects that demand for outdoor sporting equipment will continue to grow, and according to Antoine Elie, Pelican wants its share.

"For many years we have been investing close to five per cent of our sales in research and development to stay a head of the pack," Elie said "We are also looking for new acquisitions in the manufactured plastics products sector, possibly outside of sporting goods and possibly in Europe. That leaves open a lot of possibilities."

 

 

Sidebar: Getting ahead

o Christian and Antoine Elie got involved in the pleasure boat manufacturing business in the mid-1970s, when they joined their father's fledgling company.
o None of their seven brothers and sisters were interested in the company so in the mid-1990s, they took out a loan to buy Pelican Industries from their father.
o Soon after they launched an aggressive expansion spurred by new investments in production equipment and marketing that saw sales rise 30 per cent a year through the late 1990s.
o In 2001, they acquired Coleman's canoe manufacturing facilities in Texas, and moved the entire operation to Canada
o Two years ago they shifted their efforts to the kayak division which grew rapidly and now comprises 20 per cent of sales.

 

Photo caption: Christian and Antoine Elie, co-owners of Pelican International, (shown here in one of the company's canoes), have been big winners in the rising popularity of outdoor sports.

 

peter@peterdiekmeyer.com

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