In the fall of 2010, Bruce Ballantyne was spending a lot of time at home. The 30-year veteran of the indoor furniture business had been let go due to downsizing, and he was in search of a new opportunity. “Dragons’ Den came on, and there was a furniture company in my hometown of Stratford, Ont., looking for management help,” he recalls. And just like that, he’d found his next move.
Ballantyne’s wasn’t the only inquiry that company, C.R. Plastic Products, received in the wake of its appearance on CBC’s business pitch show. “It probably took two months of my life away, just answering phone calls,” recalls co-founder and president Jamie Bailey, who pitched the Dragons with his wife, Trudie Wiseman. Such is the burden of turning a modest business into an empire.
C.R. Plastic manufactures four seating lines—including its signature Adirondack (or Muskoka) chair—and other outdoor furniture from recycled plastic. Since the turn of the decade, it has expanded at a steady clip, posting revenue growth of 181% from 2010 to 2015 and earning the No. 297 spot on the 2016 PROFIT 500 ranking of Canada’s Fastest-Growing Companies. It’s now Stratford’s largest private employer and last year bought a 300,000-square-foot former automotive factory to dramatically increase its capacity. C.R. Plastic is now working to get the new plant up to speed, to improve production efficiency and to expand its product line. “We have the ability to double the business again,” predicts Ballantyne, now a co-owner and the vice-president of finance.
It’s been an ambitious acceleration for a company that started in Bailey’s basement in 1994. Back then, he was running a wood shop that occasionally turned out patio furniture, when he came across a piece of recycled plastic at a garage sale. Spotting an opportunity to switch materials—“I was always sort of an environmentalist,” he says—and avoid the laborious staining and painting involved with lumber, he hunted down a plastic supplier, built an Adirondack mould inspired by the chair’s original 1905 patent, and made a few units. The chairs attracted lots of interest but not a lot of buyers. Bailey returned to woodworking, but he kept coming back to plastic. In the years that followed, he tinkered with production, added new colours and sold his chairs wherever people would buy them.
Demand slowly grew, and, by the time he appeared on Dragons’ Den, the company’s annual sales had topped $4 million and he was turning away scads of business due to production limitations. The company could either stay a modest success or go big and take advantage of surging demand for the chairs, which today retail for around $300 in Canada, the U.S. and Europe at big-box and independent stores, and via e-commerce portals like Wayfair. With the popularity of the company’s offering and the macro trend toward fast growth in the outdoor furniture category, it simply made sense to double down.
Bailey knew that, as a manufacturer, C.R. Plastic could not grow without serious investment. He also knew he wasn’t the guy to handle that, having managed the company’s moves to bigger facilities before. Enter Ballantyne. If Bailey is the company’s hands-on inventor, Ballantyne—who helped grow his previous firm’s sales from $10 million to $100 million—is its savvy strategist. The clear business plan Ballantyne put in place when he joined in 2010 won over the firm’s bank, which has, among other things, provided a mortgage for the recent auto factory buy and financed new equipment to fill it.
Such capital-intensive growth is not without considerable risks, but investing in more than you need—C.R. Plastic’s latest home is three times the size of its previous headquarters—can be smart, “[if] you’ve got good market indicators that you will grow into it,” according to Susan Rohac, vice-president of growth and transition capital for Ontario and Atlantic Canada at BDC. That’s something C.R. Plastic had in droves. In 2010, Home Hardware was the manufacturer’s only chain client; today, thanks to increased capacity, its popular Generation line of chairs is available through many of the big-box retailers it once had to turn away.
Of course, with rapid growth comes cash-flow management and demand-forecasting challenges. C.R. Plastic is subject to the outdoor furniture industry’s long buying cycle, in which goods are ordered six months before they’re paid for. But the company has learned to use this to its advantage: It offers escalating discounts to retailers that commit early. Signed contracts keep the bank happy, and the sooner orders are secured, Ballantyne says, the better C.R. Plastic can plan its production. And that enables it to offer greater security to its employees. (This year, the company plans to keep its entire seasonal workforce on through the fall to build out inventory.)
That’s a priority for Bailey and Ballantyne. C.R. Plastic has had offers to shift manufacturing elsewhere, but both men were born in Stratford and neither wants to leave, especially now that the company has the leeway to ramp production up or down at its own facility. Their commitment to domestic manufacturing is more than feel-good philosophy—the company’s wares are big and bulky (read: expensive to ship), and, since 95% of its business is in North America, the reduced logistics expenses of local production offset any premiums on labour costs. Plus, there’s ample recycled plastic supply in Ontario. “As soon as I got 50 employees, I just couldn’t see moving it to another place,” says Bailey. Growth has to happen somewhere, after all, and it may as well be where the whole thing started.