Canadian Electrical Wholesaler

September 13, 2021

EIN Nexans Jerome 400By Jerome Leroy - VP, North America, Buildings & Territories

In just 18 months, our industry has seen businesses locked down and borders closed. Lead times have grown from weeks to months and orders have been cancelled. Copper prices have nearly doubled and continue to increase. We’ve seen an increasing number of extreme weather events, for instance Texas shut down by cold weather and British Columbia hit by record heat. And, of course, the pandemic has affected every economy in the world.

Make no mistake: these events characterize a new normal where, we believe, we’re seeing the emergence – and acceleration – of two widescale trends. The first is supply chain disruption. The second is the rise of Corporate Social Responsibility (CSR).

Supply Chain Fear Factor

These days, lucky are the purchasing directors who are not facing supply chain challenges – raw materials for manufacturers, finished goods for distributors and installers, and volatile pricing for both. There are several reasons for this:

  1. Raw material shortage: Beginning with copper, several key wire cable components have been hard to find this year (PVC, aluminum, wood, etc.). The reality is that COVID has accelerated a long-term trend of copper production contraction, with mines closed for several weeks. Snow in Texas and the recent Hurricane Ida have also had a negative impact on production of plastic compounds (and to some extent on copper production as well).
  1. Market demand surge: While manufacturers and distributors with low inventory levels were recovering from COVID shortages, construction sites began reopening. Pandemic economic response plans provided incentives while good weather and the flux of people moving from urban to suburbs, smaller towns and rural areas only increased demand. From residential to commercial applications, our industry is processing volumes of cable we have not seen in years.
  1. Manufacturing limitations: In addition to stresses on raw material and labour, the Canadian market has been impacted by the US market recovery. American high demand combined with unusually high margins have pushed some manufacturers to momentarily step out of Canada to focus on US demand.

These events may or may not happen again, at least not at the same time. Copper prices are, however, likely to continue growing. As Goldman Sachs explained in a December 2020 report, we are currently at a peak in copper production that will decline for at least the next 20 years, while demand driven by cables, batteries, etc., will continue to grow. What’s more, unexpected weather events have and will keep happening – bigger and more frequently if we listen to environment experts, which will contribute to cause disruptions.

 

CSR and Climate Change

Until recently, ‘CSR’ meant Customer Service Representative to most businesses. While more top of mind in Europe until recently, Canadian companies are catching up on Corporate Social Responsibility (CSR). One reason for increased awareness: large corporations are being pushed to work on and publish their Environmental, Social and Governance (ESG) reports, because more investors, like Black Rock, are taking carbon emissions into account when investing.

Another reason? Companies are feeling the rise of CSR-related challenges locally – in particular companies like utilities, committed to carbon neutrality. In the years ahead, manufacturers will need to redefine their way of doing business and find a way to emit less CO2, directly or indirectly. The same goes with public buildings that require LEED certification, which will in turn pressure manufacturers to address their carbon impact. Beyond CO2, several utilities are focusing on community issues -- like local employment – in their ESG reports and supplier evaluations.

There are even more CSR-related changes to come that will impact businesses in Canada. Two examples: a potential Green New Deal in the US that radically accelerates CO2 emission cuts by 2030 and would likely force Canada to follow suit. And a Dutch court ruling that requires the global oil and gas giant Shell to cut CO2 emissions generated by both its oil and gas and oil products production, which could put the same pressure on carbon-intensive Canadian companies to comply. In the cable industry, Europe has made good progress in calculating and benchmarking CO2 emissions of cables, while requiring manufacturers to continually monitor environmental regulations (e.g., REACH, RoHS) for allowed materials and ensure they comply. Finally, with recent events in British Columbia, and Canada experiencing the second fastest growing average temperature globally, heightened political and legal pressure are just around the corner even without international action.

Embracing These Trends

It’s a new world Nexans is already preparing itself, its clients and the industry for. Last year, we announced that we would focus on service quality, dedicating most of our capacity to top customers. We also reinforced the integration of our operations with our Montreal Copper Rod Mill to sharpen operations. This has proven to be the right decision, allowing us to ensure business continuity with all our clients.

In the meantime, we are paving the way to a CSR-compatible way of doing business. Leveraging the experience Nexans built in Europe, we are already reducing our carbon footprint and we built a roadmap to lead us further. And we are engaged with our key suppliers and clients to do more.

As an active member of the Canadian community for 110 years, we have seen, supported, and led some of the biggest changes in our industry. We are eager to embrace these latest trends and challenges, together with our partners.

 

Statistics CanadaThere were slightly fewer active businesses (-0.1%; -1,208) in May compared with a month earlier, marking the first time since May 2020 that the number of closures outpaced openings.

The number of business openings decreased by 11.5%, the largest percentage decrease since December 2018 and the second consecutive month with negative growth (Chart 1). The number of business closures declined by 2.9%, following a 2.5% increase in April. The decline in the number of business openings in May was largely driven by fewer entrants (-16.4%). The number of entrants in May was below the 2015-to-2019 average for the first time since August 2020. 

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488 Days of COVIDBy John Kerr

Looking back to early 2020, the industry entered the first quarter with a sense of a solid year ahead, one that would easily eclipse 2019, and then in mid-March the brakes went on and relatively quickly.

On both the supplier and distribution sides, many took a reactionary stance and then quietly planned their next moves. Thinking differently, adding stock and doubling down on inventory, looking at alternative shipping methods and figuring out how to stay close to the customer are among the attributes of those that pivoted well and have come out of the dark in great shape.

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Non-Mortgage Borrowing from Chartered Banks in March 2020The outstanding credit debt of private non-financial corporations doubled from the height of the financial crisis in 2008 to early 2020. At the onset of the pandemic in March 2020, businesses added a record $52.1 billion in credit debt to their balance sheets. However, according to a new study, as other sources of financing became available and businesses adapted to the pandemic, outstanding loan balances with banks declined for eight consecutive months.

The study Trends in Canadian business debt financing: Before and during COVID-19 looks at the types of credit debt private non-financial corporations incurred prior to and during the COVID-19 pandemic, and examines how they used that liquidity to weather the economic turbulence during this period.

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Investment in Building Construction - May 2021Investment in building construction cooled slightly in May, decreasing 1.9% to $19.4 billion. This was the first drop in seven months. Residential construction investment (-2.7%) was down for the first time since April 2020, while non-residential construction increased slightly.

On a constant dollar basis (2012=100), investment in building construction declined 2.7% to $14.8 billion in May.

 

 

 

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David GordonBy David Gordon

As we transition from the pandemic many wonder about the future of sales, meaning, “What will the sales process (sales model) look like in the future,” and, essentially, “What is the role of / for outside salespeople?”

In reality, this question was asked pre-pandemic as management lamented that Sales wasn’t being as productive as they desired. Companies are always seeking to improve their processes, whether it is having salespeople better penetrate accounts, identify and call on new customers, use a different (new?) sales method...
 

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Changing Scene

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ETIM North America (NA) announced that Atkore, Rexel Canada Electrical Inc, and Priority Wire ...
Atkore’s FRE Composites® fiberglass conduit recently experienced increased demand in above- and ...
Hammond Power Solutions Inc. (HPS or the Company) announced today that Chief Executive Officer and ...
Deschenes Group Inc. (“DGI”) proudly announces the acquisition of Matériaux de Plomberie PMF and ...
 Canada’s National Electrical Trade Council (NETCO) is pleased to announce that IDEAL ...
 

 

Signify“In the second quarter we saw an acceleration of the pace of recovery in comparison to the first three months of the year,” says CEO Eric Rondolat. “We successfully executed our strategy as demand for our connected lighting offers and our growth platforms remained strong.”

The consumer segment held its momentum and demand for conventional products proved resilient. The professional lighting segment showed sequential improvements, while still impacted by both extended lockdowns and supply constraints. Overall, we managed to improve the operating margin by 190 basis points and generated a solid free cash flow. 

 

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Adrian ThomasSchneider Electric Canada, together with the France Canada Chamber of Commerce Ontario (FCCCO) is proud to announce Adrian Thomas as the newly elected President of the European Union Chamber of Commerce in Canada (EUCCAN). Thomas, who currently serves as the country president of Schneider Electric Canada is entrusted with continuing the growth of EUCCAN by reinforcing transatlantic cooperation between the European and Canadian business communities.  “I am deeply honoured for the opportunity to join EUCCAN as their new President and build on the growth they’ve experienced in recent years,” says Adrian Thomas, Country President of Schneider Electric Canada. 

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Agents of ChangeAgents of Change is an event for stakeholders from Canada's electricity and beyond to build capacities in diversity, equity and inclusion.

Agents of Change is a one-day event focused on equipping attendees with the tools they need to address the challenges under-represented groups face in the workplace. Women, Indigenous people, racialized people, persons with disabilities, LGBQ+, gender diverse people and newcomers to Canada are under-represented in electricity and often face systemic barriers. We have the power to change this disparity and transform our sector into a paragon of equity.

 

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Flemming Jensen, Jason Samuelian, and John ClancyLED lighting solutions manufacturer Espen Technology has announced three changes to its sales management team.


Flemming Jensen (left), previously was Vice President of the Central and South Regions, has been promoted to Senior Vice President, Sales and Marketing. Flemming brings over 40 years of industry experience in the distribution, ESCO, and agent markets. He will focus on continuing Espen’s top line growth, in the coming years.

 


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Edison ReportEdisonReport has announced their 5th Annual Lifetime Achievement Awards.  These Awards will be presented the Tuesday evening, 26 OCT before LightFair begins on Wednesday, 27 OCT.

Judges for 2021 were Paul Pompeo, Nancy Clanton, and Donny Wall.  Clanton stated, “Selecting individuals for this award was extremely rewarding especially in identifying the leaders and innovators, including world class lighting designers and researchers, that truly have made a tremendous positive impact in our lighting industry.”

 

 

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Peers & Profiles

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Illumisoft Lighting is an innovative company headquartered in Ottawa that focuses on suspended ...
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In July, Eaton announced that Vice President, Channel – Electrical Sector, Matt Cleary would be ...
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Omid Nadi, Trade Marketing Manager with Ledvance, is a Ryerson University grad coming out of their ...

 

 

Brett NicholdsBy Blake Marchand

Illumisoft Lighting is an innovative company headquartered in Ottawa that focuses on suspended ceiling troffer LED fixtures that utilize optical film technology to achieve a high level of performance and efficiency.

Their flagship product is the EcoWing, which is available for new construction and fixture in fixture retrofits. Their primary application target is office buildings, hospitals, and dealerships. Recent projects include the Department of National Defense building in Ottawa, AMPED Sports Lab, Queensway Carleton Hospital, and Surgenor Automotive Group.

 

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Jeffrey MoyleBy Line Goyette

“The ongoing integration of Rexel Utility into our Canadian business platforms has underscored our responsibility as an organization to find creative solutions for today’s challenges, as well as to prepare for tomorrow’s opportunities.”

This quote from Jeffrey caught my attention. Vice President, Supplier & Digital Strategy at Rexel Canada Electrical Inc., Jeffrey has extensive experience in the industry and is a graduate of the University of Western Ontario with a Master’s in Business Administration, focusing on internarial leadership.

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