CAN-ENG FURNACES

Can-Eng Furnaces International Ltd. (Can-Eng) custom engineers heat-treating equipment in a busy manufacturing facility located several blocks from the famous Niagara Falls. Established in 1964, Can-Eng has grown to become a leading designer and manufacturer of thermal processing equipment for ferrous and non-ferrous metals.

In 1964, Can-Eng started with an order from a U.S. furnace manufacturer, for design engineering. Within a month, an order was obtained for a $100,000 furnace line for Thompson Products (TRW) in St. Catharines, Ontario, a major contract 50 years ago. “The heavy industrial manufacturing bases in Hamilton and Niagara were very key to us in the 60s, and 70s” says Michael Klauck, president of Can-Eng.

CAN-ENG-Furnaces-Rotary-Hearth-Furnace-System-(2)Klauck is a graduate of the metallurgical engineering program at McMaster University in Hamilton, Ontario. He has spent nearly 30 years in all aspects of iron and steel production, from primary steelmaking to the finishing floor. Prior to joining Can-Eng, Klauck held positions at Atlas Specialty Steels in the Metallurgical Technology Group, and was a Division Manager at the vacuum heat treatment operations of Bohler Uddeholm, the world’s largest producer of specialty steels.

Can-Eng built its original manufacturing site in Niagara Falls because at the time, the city was in close proximity to some of its major customers, including General Motors (GM) and TRW in St. Catharines, Atlas Steels in Welland, Dofasco in Hamilton, and International Nickel in Port Colborne. In 1965, the company established a wholly owned subsidiary in Mexico (SELMEC), and had major contracts for six complete hardening and tempering lines for automotive leaf springs in Chatham, Ontario—an amazing accomplishment for a fledgling corporation.

Klauck worries that the customer base in Ontario has been seriously eroded in the past 10 years. “Once you lose momentum, it is very hard to get back on track,” he argues. This is true for Canadian (and more so for Ontarian) manufacturing, which is still the economic engine of the country. Klauck believes that for a company to be successful on the global stage, it must compete on technology and be prepared to take the risks necessary to become an innovative leader.

In the 1980s, Can-Eng received major equipment orders from leading manufacturing plants in Ontario, such as GM Transmission in Windsor, International Harvester in Hamilton, Garland Commercial Ranges in Mississauga, and Hyundai Automotive in Newmarket. While Can-Eng still receives 15 per cent of its new equipment contracts from the Canadian market, its primary market is now in the United States, which represents 70 per cent of the company’s revenue.

Can-Eng’s international customers stretch to Chile, Mexico, Russia, China, and India. The company is highly involved in a variety of shows and exhibitions all over the world, which serve as an effective way to develop contacts and build a global network. Klauck goes to Russia, China, and India to do business in person, and has developed contacts in many markets by travelling extensively for business.

WHEN KLAUCK JOINED CAN-ENG 15 YEARS AGO, ANNUAL SALES REVENUES WERE ABOUT $15–20 MILLION; TODAY THOSE FIGURES HAVE RISEN TO $60 MILLION.

The company took calculated risks to achieve this level of growth. “We are designing and developing industrial furnace systems and automation that did not exist 15 years ago. In this sense, we are creating our own vision of the future. When we see a customer need for an innovative solution, we engineer, prototype test, and continue to evolve our designs based on key lessons learned,” Klauck explains.

CAN-ENG HAS GAINED AN INTERNATIONAL REPUTATION FOR INNOVATIVE DESIGN AND QUALITY WORKMANSHIP.

At its 50,000 square foot Niagara Falls site, Can-Eng has its own research and development (R&D) facility: the Technology Development Centre. This facility utilizes existing engineering tools, such as 3D modelling and computational fluid dynamic modelling, to support ongoing R&D. To accommodate the peaks and valleys in its order book, Can-Eng has another 40,000 square foot high-bay facility in Welland, 10 kilometres from the company headquarters.

Klauck feels strongly that intellectual property (IP) in equipment is not Can-Eng’s only strength; the company’s most valuable asset is its people. Can-Eng employs 120 workers in total, 70 of whom work in engineering and sales. Most of the employees are local and finished their educations at McMaster University, the University of Toronto, the University of Waterloo, Niagara College, and/or Mohawk College.

According to Klauck, “We have no problem attracting mechanical engineering people, but electrical and automation engineers are harder to attract, because their skills sets run across many industries.” That’s why Can-Eng decided to open a new automation design office in Burlington, Ontario. Its main purpose is to attract the skill sets that are more readily available in the “engineering corridor” between Burlington and Toronto. “If talented people are not coming to us, we are better to move closer to them,” says Klauck.

Klauck holds up Germany as a model for leveraging partnerships between governments, the private sector, and educational institutions, and he emphasizes that Ontario needs to improve greatly in this area to be able to attract and grow companies here. He believes that to attract more business to Ontario, governments need to develop a comprehensive strategy that considers a spectrum of factors: incentives for R&D, energy costs, taxation, appropriate training and development of skills sets, and better coordination of efforts by the three levels of government. Governments must show prospective investors that Ontario is the best place to do business in the world.

Can-Eng has succeeded by innovating, developing intense industry knowledge and relationships, and cultivating an intelligent and dedicated workforce. However, as it strives to grow ever larger, it must consider where the next stages of growth will be based—here, or somewhere outside of Canada. Klauck believes that a comprehensive strategy and more effective educational partnerships are critical to ensuring that growth continues in Ontario.

Discover more about Can-Eng on their website.

Company Profile

Company Description

Overview

Can-Eng Furnaces International Ltd. (Can-Eng) is one of North America’s leading designers and manufacturers of thermal processing equipment of thermal processing equipment for ferrous and non-ferrous metals.

Key Facts

Headquarters: 6800 Montrose Rd. P.O. Box 628 Niagara Falls, Ontario L3E 6V5

Other facilities: New engineering office in Burlington, Ontario

Executives:

  • President: Michael Klauck

Year established: 1964

Number of employees: 120. 90 of them are engineering & sales

Revenues: 60 Million in 2014

Line of business

NAICS: 333416- Heating Equipment and Commercial Refrigeration Equipment Manufacturing. 333990-All Other General-Purpose Machinery Manufacturing.

Products

Aluminum furnaces, steel plant furnaces, mesh belt atmosphere furnaces etc.

Markets

Customers: Industrial furnaces touches every facet of manufacturing industry, so ranges of customers is everywhere. Eg: Sunbeam, GM, Honda and TWR.

Exports: 70% to the United States, and the rest of 30% to Chile, Mexico, Russia China India and Canada.

 

History

Can-Eng built its original manufacturing site in Niagara Falls in 1960s because the city was in close proximity to major customers. Business started with an order from a U.S. Furnace Manufacturer in 1964.

Competitive Environment

Partnerships

Industry alliances:

  • Have partners all over the world; technical partner in Japan. Commercial representative and office in the U.K. Have own associates in South America and Russia

Government Relationship:

  • Little interaction with governments
  • SR&ED was helpful 7,8 years ago, but useless now

Education Institution Partnerships:

  • Hired employees from McMaster University, University of Waterloo, Niagara College and Mohawk College. But Can-Eng doesn’t have lots of partnerships with educational institutions yet. Might partner with McMaster in the future because it’s steel industry oriented

SWOT Analysis

Strengths:

  • Had great industry alliances
  • Invest a lot on R&D and innovation

Weaknesses:

  • Little interaction with government & educational institutions
  • Hard to attract electrical engineers

Opportunities:

  • Expand new and existing markets in the United States.
  • Considering where the next stages of growth will be based—here or outside of Canada.

Threats:

  • A comprehensive strategy and more effective education partnerships are critical to ensuring that growth continues in ON.

Performance

Recent Developments

  • New engineering office opened in Burlington in April 2015- solely focused on automation parts

OTHER PROFILES