Expanding into the South
Two Western Canada firms are drumming up business along the U.S. West Coast
March 10, 2023 By Jack Kazmierski
While some Canadian companies dream about success beyond our borders, few find the opportunities that would make the move viable, and fewer still manage to take the plunge successfully.
One of the companies that has made the move successfully is Hemlock Printers. In October 2022, Hemlock purchased Los Angeles-based Paper Chase Press, and according to Richard Kouwenhoven, Hemlock president & CEO, the acquisition was a good fit because both companies have similar clients and “similar market positioning around quality and technology.”
Based in Burnaby, B.C., Hemlock is focused on new business possibilities with clients on the West Coast. The company has 175 employees in Canada, as well as sales teams working out of Seattle and San Francisco. “We [also] have a wholly owned U.S. subsidiary based in Washington State, and we’ve been selling into the U.S. for over 25 years now,” adds Kouwenhoven.
The e-commerce benefit
Paper Chase was particularly attractive as an acquisition because of their focus on e-commerce and their digital knowhow. “What was really interesting about them is that they have grown through e-commerce,” Kouwenhoven explains, “and we have no real direct e-commerce business. So we can learn from what Paper Chase has done both in the e-commerce and the digital marketing side, which we see as areas we’d like to grow in the years ahead.”
Kouwenhoven says he sees both short- and long-term benefits to his acquisition. “We now have a new sales channel that is coming from the United States,” he explains. “The Paper Chase team and the U.S. Hemlock team can work to develop business together. So that’s the immediate benefit. The longer-term benefit is the growth and expertise in e-commerce, which also drives all kinds of opportunities from a workflow automation standpoint, and the introduction of those kinds of services into the Canadian market.”
Over the next 12 months, Kouwenhoven plans to align and integrate the processes employed by both companies, and thereafter to focus on growing their combined product offering. He feels that this acquisition gets Hemlock into new markets with new opportunities. “The Southern California area is a giant commercial market,” he adds.
The Paper Chase acquisition will benefit Hemlock and boost business on both sides of the border, Kouwenhoven explains. “It’s great news for our U.S. sales team because they have a new ally and a new tool at their disposal. On the Canadian side, it’s the expertise in e-commerce and social media and digital marketing that we feel will be important for Hemlock’s long-term success.”
Taking advantage of missed opportunities
Like Hemlock, Mitchell Press, Burnaby, B.C., is also eager to boost business along the West Coast. With customers both in Canada and the U.S., Mitchell Press’ executive vice-president Scott Gray says his company is focused on growing their client base south of the border.
“We’ve been working in the States for years,” Gray says, “mostly through historic relationship with a ‘drive down, fly down’ approach to doing business. However, during the pandemic we saw a lot of activity from Eastern U.S. brokers, and we realized that there was a lot of opportunity being missed, especially in the States.”
One of the key benefits of working with American customers, according to Gray, is the big orders they tend to place. “Run sizes in the States are two to three times what they are in Canada,” he explains, “so it doesn’t take as much to make us busier.”
Gaps in the marketplace
Although Mitchell Press was able to take on several larger projects with the help of brokers, Gray says he saw opportunities that were especially well-suited for a West Coast company like Mitchell. “We noticed gaps in the marketplace, especially in the publication and catalogue production areas because a lot of the competition that we have is either in Eastern Canada, or the Midwestern United States. There’s not a lot on the West Coast. They keep disappearing because they’re more focused on super-high-volume [projects] at a cheap cost.”
Mitchell Press, on the other hand, is focused on quality, and on providing top-notch service to their West Coast customers, Gray explains. “When you’re talking about publications, content is king, and it has to be a quality publication,” he adds. “We got back about $4 million worth of business in the last two years from clients that had been printing back east, and just felt they weren’t the number one [client] anymore.”
This West Coast-focused approach to business is why Mitchell Press opened sales offices in Portland, Ore., in October 2022. With one full-time employee in Oregon, along with two manufacturer’s reps, Mitchell is eager to drum up new business, “up and down the West Coast, predominantly from Northern California to Washington State,” Gray adds.
The West Coast is important to companies based in Western Canada simply because of geography, Gray explains. “The Rockies separate the West Coast from the rest of the world,” he adds. “What we’ve noticed, especially with all these extreme weather events, is that the West Coast can get cut off for days at a time. So people are trying to bring their product a little closer to home if they can, and running up and down the coast, as opposed to going inland and outland, has its advantages.”
The goal, Gray says, is sustainable growth. “A lot of competition up and down the West Coast has either gone out of business, or they’ve mothballed equipment, or they just didn’t see it was going to fit their billion-dollar dreams,” he adds. “We’re not a massive printer, but we’re big enough that we can play with the big kids.”
Fully aware the economy is still unpredictable as we enter 2023, Gray says he isn’t overly ambitious as he looks at his company’s potential in the U.S. “We want sustainable growth,” he explains. “With 105 employees, we have 105 families to feed. We want to expand, but we don’t want to be uncomfortable with how busy we are. We want to be able to make sure we’re profitable, and that we’re delivering on what we say. We always want to make sure we deliver on quality.”
An edited version of this article originally appeared in the January/February 2023 issue of PrintAction.
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