Growth in all four of its businesses propelled Southern Manitoba book manufacturer, Friesens Corporation, to a record sales year in 2018.
In his annual report for the year, CEO Chad Friesen indicated the company approached nearly $90 million dollars in corporate revenue, surpassing the previous record set nearly 20 years ago in 1999.
"The company has gone through a number of challenges over that period of time, some changes within the company, the markets certainly were a challenge for us over that period, and so we're very fortunate to be in a place where we are now surpassing what were record sales years in the 90s," he said.
This success resulted in the creation of 16 new jobs at Friesens in 2018, and the company will share over $2 million dollars among its employee-owners.
According to the year-end report, Friesens Book Division, Friesens Yearbook Division, Friesens Packaging Division, and FriesenPress - a branch of the company located in British Columbia that serves self-publishers - all reported revenue and profit growth this past year.
"Book publishing is healthy and is growing and e-reader sales are dropping," said Friesen. "Our packaging businesses are growing (and) the markets are very strong, especially now as that industry is going through somewhat of a transition as companies are trying to not only package their products for store shelves but also for home delivery and taking advantage of the e-commerce market."
He went on to say that the yearbook market has stabilized after some uncertainty in recent years, and a boom in the self-publishing market translated into more business for the company as well.
Friesen credits this success to a number of factors, however, he says the company made a deliberate effort early in the year to grow the business.
"Our sales team had a tremendous effort in 2018 to achieve those records, but we also set our minds to preparing ourselves within our production facilities to handle that kind of growth," he explained. "And so we were strategic early in the year and said we need to build an operation that can handle that kind of growth and our people went out and achieved that. I'm very proud of the people-aspect and the preparation that went into getting us ready for that."
As part of that effort, $9 million dollars was re-invested back into the company this past year through new press, binding, and packaging technology and equipment.
Friesen pointed to several external market factors, like a strengthened U.S. dollar and weakened Canadian dollar, that also played a role in the company's record success in 2018.
With 50 percent of what Friesens produces exported to the U.S., he says a significant shift in the U.S./Canadian exchange rate has a fairly dramatic impact on the company's profitability.
"Whenever the (Canadian) dollar decreases in value, it's a good thing for exporters like Friesens," he noted.
In his report, Friesen indicated the USD saw a 5 percent improvement in the last half of 2018 in comparison to the last half of 2017 and was worth an average of $1.32 CAD.
In addition, he pointed to a resurgence in the North American hardcover book market, which is one of Friesens' specialties and the core of its business, posting 5 percent growth in each of the past three years.
In fact, Friesen says an uncertain political climate in the United States has helped contribute to that boost.
"Interestingly enough the U.S. publishing market has been growing because of political books that have been written, and so there has been a dramatic increase in the number of titles that have come out from both sides of the political spectrum," said Friesen. "And so when there's turmoil in the political scene in the U.S. more books are being produced because more debate is happening and more people are trying to get their opinions across."
As far as NAFTA negotiations and the implementation of U.S. tariffs on Canadian steel and aluminum imports that took place in 2018, Friesen's report indicates the company felt only mild impacts from those measures.
Looking ahead to 2019, Friesen says the plan is to build on the success of the past year which saw the company make one of the largest re-investments back into the business.
"2019 is going to be even more of an investment in our business, and we see probably for the next two to three years that Friesens is going to continue to double-down on equipment and technology and preparing ourselves for whatever is to come," he explained.
In fact, about $4 million in new book-binding lines are currently being installed at the company's industrial park location.
"We invest in new technology, we invest in automation, we invest in better analytics to be smarter in how we operate our business knowing that companies that continue to invest in those things are going to be the ones that can navigate through whatever changes are coming," added Friesen.
Meantime, the company's theme for 2019 is 'On the Move' and expands on the restructuring of some of its operations and reorganization of its various businesses within the community.
Once completed, the large-scale move will see Friesens' two packaging plants - think4D and the Box Plant - fall under the same roof at the company's glass-faced building on 6th St. NE, all of its printing operations will move to the downtown location, while all of the finishing work will relocate to the building in the Industrial Park.
In the end, Friesen says about 150 of Friesens' employee-owners will change the location of where they work.
Friesens Corporation Inks Fresh Chapter For The Future