Natural products spurring healthy growth at Colba

Joseph Bassili is using Laboratoires Colba's natural products division to finance development in bath products and Internet services

Joseph Bassili is one of those guys whose brains just can't stop working. You'd think that he'd have enough on his plate running natural products merchandiser Laboratoires Colba. But a tour of his St-Laurent headquarters includes visits to a string of new divisions that would leave most entrepreneurs gasping for breath.

Beyond Laboratoires Colba, which markets a wide range of natural health products including EnerForce food supplements and the Root of Life natural health products' line, Bassili also controls bath products marketer Alpen Secrets, Internet services provider ColbaNet and a research laboratory headed by his daughter Muriel.

"When I go to sleep at night, I dream about new business ideas," Bassili said. "I think it's in my blood."

It may very well be. Bassili's father Elie, who came to Canada in 1965 and in is now well into his 80s, --but fit as a fiddle,-- devoted much of his life to building up Parfumerie Reynard, a depilatory wax company that he still runs. As a result, Joseph Bassili got good business exposure at an early age.

In the two decades since he left Concordia's graduate studies chemistry program,--just shy of completing his M.Sc.-Joseph Bassili has built the group of companies he controls into a $20 million a year operation, with almost 100 employees, spread out over 75,000 square feet of space in three buildings.

Laboratoires Colba is probably best known for its Root of Life (Racine de Vie) line of 50 natural product SKUs (stock-keeper units) which include supplements such as Ginseng, Echinacea, and various Glucosamine-based items.

Over the years the company's staff have hosted numerous paid advertorial-style radio and television shows, dealing with health product benefits, which has made the line a household name among Quebec francophones. The company even has a television studio at its head office so some shows can be produced on site.

But ironically, it's the evolution of the group's core nutraceuticals business that's in large part causing Bassili to branch out into new investments.

The Canadian nutraceuticals industry is coming under increasing scrutiny in recent years. Provisions in the Natural Health Product Regulations, (part of the Food and Drug Act) which came into effect on January 1, 2004, say that all products that makes claims about their effects, must apply for a Natural Products Number (NPN), from Health Canada.

According to Raymond Tsang, a manager in the Natural Health Products Directorate's good manufacturing practices division, legacy products that have been marketed for more than 50 years are exempt. Products that were on the store shelves when the regulations went into effect, benefit from a four-year transition period, during which they must obtain federal certification

Nevertheless the new regulations are increasing compliance costs at natural products marketers said Raymond Baribeau, president of the Canadian Natural Products Association.

"The regulatory offices have more product applications than they can handle," Baribeau said. "The delay is slowing new product introductions and is costing the industry sales."

Laboratoires Colba has one person employed full-time just filling out forms to get various products approved.

But according to one industry expert, Canada is ahead of the curve when it comes to natural products' regulation.

"Natural products had a bad rap in the U.S. for a long time and sales hit a plateau. (But) Canada learnt from our mistakes," said Rebecca Madley-Wright, editor of U.S. based Nutraceuticals World magazine. "They acted fast, by introducing tough statutes."

These new Canadian regulations will hurt some fringe players, but they will boost consumer confidence in the industry over the long run, Madley-Wright said.

But Bassili isn't just waiting around for the nutraceuticals industry to bounce back. In 2001 he bought Alpen Secrets, a bath products manufacturer. According to his son Jean-Paul, who now runs the division, the fit was good.

"We sell our shower, bath and body care products through many of the same distribution channels as Laboratories Colba, so there are some good synergies," Jean-Paul Bassili said.

And earlier this year, Joseph Bassili who has been investing in Quebec's Internet industry since the mid-1990s through his ColbaNet division, made another key move. The group acquired CGI Group's Web-hosting service, in a deal that brought prestigious clients including Sprint Canada, Mitsui/Toyota and Nesbitt Burns, and which increased ColbaNet staff from 25 to 35.

But Bassili isn't resting on his laurels. He is currently working on several new projects, none of which he is willing to discuss on the record.

"I have big dreams," Bassili said with a smile. "I know we are getting big. But I want to really big."



Sidebar: Bassili's management strategy

o Concentrate on marketing and product development. Farm out
manufacturing as much as possible.
o Diversify to take advantage of new opportunities and spread business risk
o Rent rather than buy office and production space. Use extra cash to focus on business development.
o Target Quebec's francophone markets. Use foothold to broaden base into English Canada
o Promote extensively to build and maintain top-of-mind awareness for leading brands such as EnerForce, Root of Life and Alpen Secrets

Photo caption: According to Joseph Bassili, president of Laboratoires Colba, managing several highly specialized divisions is easy, once you learn certain universal business principals.


Fact Box:
Company Name: Laboratoires Colba
Owner: Joseph Bassili
Founded: 1986
Products: Natural health, hair care, Internet services
Employees: 100
Sales: $20 million
Phone #: 514-856-3031


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