Montreal firm buys Prairie Forest Products

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This article was published 22/02/2018 (2254 days ago), so information in it may no longer be current.

A company that has outperformed Google and Apple on the stock market over a 10-year period — and it’s not a tech company — has made its first investment in Manitoba.

Montreal-based Stella-Jones Inc. has purchased Prairie Forest Products, a second-generation family business in Neepawa.

Prairie Forest manufactures 50 per cent of Manitoba Hydro’s utility poles, as well as pressure-treated lumber for home renovation and home improvement retailers.

Its biggest selling retail product is cedar-toned decking and fencing — a two-step process where lumber is stained first and then pressure-treated.

Also part of the sale is the Birch River plant, used for peeling and pointing fence posts, which are then treated at the Neepawa plant. The biggest retailer is Federated Co-op for the farm market.

Prairie Forest is one of a group of companies owned by Prendiville Industries Ltd.

At the time of the sale, Prairie Forest employed 10 people at Birch River, just north of Swan River, and 50 in Neepawa, about 170 kilometres northwest of Winnipeg. Prairie Forest is Neepawa’s second-largest private employer, after much larger HyLife Foods with 1,300 employees.

Ailbe Prendiville, chief operating officer for Prendiville Industries Ltd., said Prairie Forest wasn’t for sale until Stella-Jones came calling.

“It’s been a very good company that we’ve had for many years,” Prendiville said. “We decided to sell because Stella-Jones is an extremely well-run company, and they wanted us and paid us what we wanted. That doesn’t come along every day.”

A 2016 feature in the Globe and Mail portrayed Stella-Jones as a sleeping giant in the business world. In the 10 years leading up to the article, it had outperformed the most successful tech giants, including a five-year span where its stock returned 432 per cent on investment.

The Globe article marvelled at how an old-economy business could put up such fantastic numbers. Stella-Jones boasts close to $2 billion in sales annually. It employs about 1,900 people at 37 wood-treating plants across North America.

Now, Prendiville said, “We’re the 38th.”

Stella-Jones president and CEO Brian McManus said his company owns wood treatment plants across North America, but has a big hole in the geographical centre, where Prairie Forest is. It helps that Prairie Forest manufactures two of Stella-Jones’ three main products: utility poles and treated lumber. Stella-Jones also is a big manufacturer of railway ties.

“It’s a great fit to our network in terms of its geographical location, as well as the client base they have,” McManus said — including utility poles to Manitoba Hydro.

“We were already selling to them,” said McManus.

The president said Stella-Jones was impressed with the operations of Prairie Forest.

“Hopefully, one of the things we always do with our facilities when we acquire them is we combine both of our best practices and see things that they’re doing that maybe are better than what we’re doing and we’ll learn from that,” McManus said.

There also could be some capital investment in areas where the plant needs upgrading.

“Ultimately — hopefully — we can capture some additional sales in the area so we can put through some more volume,” he said.

Prendiville Industries still owns Norwest Manufacturing in Thompson, and Kenora Forest Products in Kenora, Ont. The company has had a long, steady but fairly quiet history in Manitoba. It was started by Joe Prendiville and is now run by his daughter and two sons: Maureen Prendiville is president and CEO, while Lawrence handles sales and Ailbe is COO.

“I believe our family business has survived so well because of family,” Ailbe said.

Positions in the company are matched to each individual’s skill set, he said.

Joe Prendiville emigrated from Ireland in the 1950s and went to work in the mine with Hudson Bay Mining and Smelting.

He opened a sawmill in Flin Flon to support the mine’s lumber needs, and then opened another sawmill in The Pas and supported Thompson mining needs, as well. In 1972, he purchased the premises formerly run by Morton Timber in Neepawa for wood-treating, and installed a peeling machine for de-barking timber.

The company was initially called Prendiville Preservers Co. Ltd. and later changed its name to Prairie Forestry Products.

Prendiville’s Norwest Manufacturing still supplies lumber for mining company, Vale Ltd., in Thompson.

Its Kenora Forest Products is bringing the forestry industry back to life in the northwestern Ontario town, following the closure of the Abitibi pulp and paper mill.

bill.redekop@freepress.mb.ca