Thursday, December 13, 2018Canada's Leading Online Business Magazine

Cargowall Ltd.

Rolling with the punches

Valorie Mueller and Tom Brewer are the owners of Cargowall Ltd., a specialised manufacturer of roll-formed products, located in Bowmanville, Ontario. For those unfamiliar, roll forming is a continuous bending operation, in which long strips of steel are passed through consecutive sets of rolls, each performing an incremental part of the bend, until the desired cross-section profile is reached. Cargowall sells most of its components to original equipment manufacturers (OEMs) in various sectors, such as tractor-trailer, fencing, construction industries.

Founded in 1989, Cargowall started out by making one tractor-trailer component with one roll forming line, and was located in a 5,000-square-foot building. Twenty years later, the company has grown substantially. Cargowall now has 12 roll formers that have the capability to bend steel metal products from 0.01” up to .315” thick. The company also has new space accommodations. “Two years ago, we put up a new 56,000-square-foot facility,” says Brewer. “We consolidated into one large building just in time for the recession. It was definitely good timing!”

Silver lining in hard times

Speaking of the recession, it seems none took it harsher than the manufacturing industry, particularly in southern Ontario. Cargowall was no exception. “We lost our largest customer in the economic downturn,” says Mueller. “So, besides taking an overall financial hit, we essentially lost about 33 per cent of our sales. The challenge we then faced was replacing that amount of business. And while we did acquire 24 new customers last year—which equated to $1 million in new business—we were doing $6 million in business with the customer that went under.”

Fortunately for Cargowall, a wise decision that was made six years ago has kept the company afloat during the economic storms. “In 2004, we began to diversify out of the tractor-trailer industry, which represented about 95 to 99 per cent of our sales,” says Brewer. “If we hadn’t started that in 2004, we probably wouldn’t exist today—the tractor-trailer industry went down by roughly 75 per cent in 2009. Naturally, we concentrated on branching out even more last year, and I think we made great strides in doing that. We’re looking forward to 2010, as we all come out of the recession. Hopefully, it will be a better year for us.”

Diversification remains the company’s major thrust into the New Year, as the team continues to broaden its customer base into different industries. “We are now strong in the agricultural business,” tells Mueller, “where we supply components for different farm equipment manufacturers. We’re also moving more into construction, providing components for heavy, industrial building. Recently, the company has introduced a few ornamental and security fence rails, as well as signposts that will offset the T-bars that come in from China. Finally, the company has tooling for store fixtures and displays, so we’re moving into that market and have developed customers there.”

Auto parts are also a natural extension of what Cargowall can offer, which is something Mueller and Brewer are contemplating. “Last year was a tough one for the automotive industry,” Brewer adds. “Originally, I shied away from moving into the auto supply, but now we’re rethinking that part and trying to place ourselves as a tier-two or tier-three supplier. The market will return and the volume is there for orders.”

Ready to grow

Cargowall Ltd. will continue to enter new markets, but as far as Brewer and Mueller are concerned, the company will remain consistent in manufacturing steel components. Prior to the recession, the company spent money on new equipment and facilities to grow the business. They are already positioned to succeed, so now they are simply waiting to be able to carry out their vision for the future.

“In 2004, we had a five-year plan to become Ontario’s leading roll formers,” says Mueller. “Last year was the finish line of that plan, which is why we have extra resources to could accommodate that goal. And now, we’re poised for the next five years to fill our capacity and to move forward with new product lines.” As signs of recovery are more and more optimistic, Cargowall is encouraged that the next five years will be ones of growth and success.