CGL MANUFACTURING INC.

For more than 38 years, CGL Manufacturing Inc. (CGL) has been a supplier of choice for original equipment manufacturer (OEM) customers in the material handling, rail, construction, forestry, mining, and defence industries. Focused on the principles of lean manufacturing, CGL has always worked with customers and suppliers towards eliminating waste and streamlining the supply chain. Since its establishment in 1977, the company has diligently sought new opportunities and quickly adapted to changing dynamics. Today, CGL is a respected player in the auto industry due to its excellent leadership and continued innovation.

Despite widespread pessimism regarding the outsourcing of manufacturing, Mike Ritchie, president and chief executive officer of CGL, believes that there are many opportunities for Canadian manufacturing: “If the Canadian manufacturing industry is to continue to grow, we have to focus on the intellectual infrastructure; we have to start thinking about how to do things using heads, not just hands.” While many Canadian manufacturers see China as a potential threat, CGL views the Chinese market as an opportunity. From its initial 2,000 square foot facility in Guelph, Ontario, CGL has grown to encompass 12 state-of-the-art machining and fabrication facilities (totalling over 300,000 square feet) across both Canada and China. These plants include eight joint venture foundries and workshops, three facilities specifically focused on machining in China, and one facility in Guelph, Ontario. Inspecting all foreign-made products in Canada prior to delivery ensures consistent quality and service.

ADAPTATION TO CHANGING MARKETS AND CIRCUMSTANCES IS THE KEY TO CGL’S SUCCESS.

Prior to the 2008 financial crisis, 80 per cent of CGL’s products were shipped within Canada, with the remainder shipped to the United States. As customers migrated to off-shore facilities in South America and Asia, CGL increased its presence in export markets. Today, 90 per cent of its products are exported. Most products go to the United States and Mexico, while others go to Brazil, Europe, and Asia. Customers include Canadian forestry giant Tigercat, and American manufacturers like Toyota Industrial Equipment, General Electric, John Deere, and GW Lisk (Caterpillar’s rail division).

Some of CGL’s customer relationships range from 25 to 40 years in length. CGL acquires new customers based on trust, emphasizing its outstanding reputation, customer referrals, and the personal touch of direct interactions with Ritchie himself. As the president of a customer-focused company, Ritchie deals directly with his customers, allowing him to understand customers’ needs, and tailor CGL’s business strategy accordingly. As the company grows, more resources may have to be diverted toward sales, but Ritchie is adamant that he will remain involved.

Ritchie is proud of his talented staff, which consists of 190 workers in Guelph, and 250 in China. CGL’s Guelph workforce includes highly skilled machinists, welders, painters, and engineers. However, finding similarly skilled workers is increasingly difficult—especially in Guelph, where numerous companies compete for talent. CGL has adapted to this situation by fostering a relationship with nearby Mohawk College. Students from the machining and welding programs are brought directly into CGL.

YOUNG GRADUATES ARE ABLE TO WORK UNDER THE GUIDANCE OF HIGHLY EXPERIENCED AND SKILLED FLOOR WORKERS DURING THEIR JOB-SPECIFIC TRAINING, HELPING CGL MAINTAIN A WELL-TRAINED AND LOYAL WORKFORCE.

As a contract manufacturer, CGL focuses on high-quality services. “I’m not a brand: my brand is my reputation and how I service my customer,” says Ritchie. In CGL’s view, manufacturing equipment is customer driven. The company seeks to innovate and consistently raise the bar. CGL distinguishes itself by being responsible, but also by approaching customers with new ideas, strategies, and methods, because Ritchie believes that manufacturers need to work with customers on total cost management and any new designs and requirements customers may have.

CGL takes advantage of the federal government’s Scientific Research and Experimental Development Tax Incentive Program (SR&ED), and the company earns investment tax credits. In addition, Ritchie emphasizes CGL’s strong relationship with Export Development Canada, and compliments the program for its help with CGL’s finances and exports.

Having doubled in growth from December 2011 to December 2015, CGL is confident of future success. Ritchie expects that attracting new customers using existing products, as well as maintaining existing customers using new products, can secure similar growth in the years to come. He states, “I am proud of manufacturing in Canada, and we will always manufacture in Canada.” With CGL’s record of success, why go anywhere else?

Discover more about CGL by visiting their website.

Company Profile

Company Description

Overview

CGL Manufacturing Inc. (CGL) is a leading designer and manufacturer of machined parts, fabrications and assemblies for global OEM customers in material handling, mining, rail, construction and forestry markets. The company has one facility in Canada and 11 facilities in China.

Key Facts

Corporate Headquarters: 151 Arrow Road, Guelph, Ontario, Canada N1K 1S7

Other facilities: CGL operates 12 facilities in total -1 in Guelph, ON (110,000 sq.ft.) and 11 in Henan province, China (3 manufacturing facilities and 8 joint venture foundries and workshops)

Executives:

  • Michael Ritchie, President & CEO

Year established: 1977

Number of employees: : 190 in Guelph, ON and 250 in Asia (including joint venture, foundries and workshops)

Line of business

NAICS: 333299 – All other industrial machinery manufacturing

Products

Special industrial equipment.

Markets

Involved in the following industry sectors:

  • Rail
  • Material Handling
  • Construction
  • Mining
  • Forestry and Defense

Exports: United States, Mexico, Brazil, Europe and Asia.

Customers: Customers include: Tigercat, General Electric, Toyota Industrial Equipment, GW lisk, and John Deere

Skills and Educational needs

CGL has a highly skilled workforce: machinists, welders, painters and engineers.

Current employees come to CGL with a college or university degree, and some join CGL with tremendous industrial experience and training.

 

History

CGL was established in 1977, Mike Richie joined CGL as a vice president, and purchased the company in 2011. CGL has diligently sought new opportunities and quickly adapted to changing dynamics. From its initial 2,000 square foot facility in Guelph, Ontario, CGL has grown to encompass 12 machining and fabrication facilities across both Canada and China, including eight joint venture foundries and workshops, and three manufacturing facilities.

Competitive Environment

Partnerships

  • CGL partners with Mohawk College by hiring students directly from the college. CGL is looking forward to expanding educational partnerships in the near future
  • Takes advantage of Scientific Research and Experimental Development (SR&ED) Program
  • Maintains a strong relationship with Export Development Canada

SWOT Analysis

Strengths:

  • Continuous Innovation
  • Long-standing customer relationships; focus on service, and meeting customer needs
  • Have operations in Asia
  • Very good people, low turnover

Weaknesses:

  • Guelph, ON has the low employment rate, and companies in Guelph are competing with very similar skill set requirements.

Opportunities:

  • Overall industry is very geographically diversified, customer diversified and capability diversified. CGL has potential to continue growing
  • Sales doubled in past 4 years (from December 2011 to December 2015)

OTHER PROFILES