Dynamic Machine Corp. continues to grow

Hey there, time traveller!
This article was published 15/07/2019 (2465 days ago), so information in it may no longer be current.

Some say we are living in the post-industrial era. To the extent that the North American economy is heavily skewed towards service at the expense of goods-producing, that is true.

In both Canada and the U.S., the services sector represents at least three-quarters of each country’s GDP.

Not to say that Manitoba is out of step with global economic trends, but the economy here is so diversified that manufacturing remains the largest sector. And that means the production economy still needs to be efficiently maintained.

That’s one of the reasons why a company like Dynamic Machine Corp. — a company with about 80 employees and at least 85 per cent of its business with Manitoba customers — can continue to operate and grow after close to 50 years in business.

And since its customer base is mostly in Manitoba, with its famously diversified array of sectors, Dynamic can be servicing equipment across a broad swath of industries. This includes companies involved in power generation, mining, transportation and general manufacturing sectors. Therefore, to some extent, it can immunize itself against the cyclical elements that affect a specific vertical market.

Earlier this month, Dynamic acquired another 40-plus-year-old machine shop, Metric Machine. It’s the third acquisition the company has undertaken. While even machine shops are susceptible to consolidation, that only tells part of the story of such a deal.

Richard van den Broek, the president and general manager of Dynamic, said the timing of the deal was probably more about being opportunistic than it was about gaining efficiencies. Metric’s founder passed away a few years ago and the successor wanted to sell.

He and others believe there is a large cohort of baby boomer business owners now looking to retire and exit their respective businesses.

It’s not as if Metric did not have enough work to do and needed to sell. According to van den Broek, it was nearing capacity running just one shift.

Even while the number of workers might be declining in some of the long-standing Manitoba industrial sectors, demand from industrial operators to repair and service equipment is not going away. Ron Koslowsky, the Manitoba head of Canadian Manufacturers and Exporters, said the flexibility of companies like Dynamic really helps their sustainability.

“The beauty of Manitoba companies is that they end up diversifying,” Koslowsky said. “They don’t end up with one focus so that if mining or oil and gas drop they are hooped. They usually have three or four different areas they service and as a result they can manoeuvre around a bit and build on one when the other goes down.”

In the past several months, Dynamic was filling up its order book, not necessarily driven by any specific industry cycles.

“When we started this conversation (to acquire Metric) we were busy, but not over-the-top busy,” he said. “But by the time we finished the deal (earlier this month) we were at capacity and maybe even above and we were starting to bank some orders.”

Even before the Metric deal, Dynamic touted itself as operating “the largest commercial and custom machine shop in Manitoba.”

Van den Broek said it was not as if the acquisition of Metric would allow Dynamic to expand its capabilities, but it does increase its capacity. Even though Metric was less than half the size of Dynamic, the two companies had the same number of welders, for instance.

Both companies had their share of old and new equipment and van den Broek said there would be some rationalization of the equipment during the integration process.

“Metric’s equipment is definitely something we are interested in,” he said. “But we are just as interested in adding the additional employees and picking up the ongoing book of business.”

In addition to insuring itself against the ebb and flow of cyclical business by having a diversified client base, Dynamic has an employee ownership program so that more than 25 of the staff is part of the ownership group, which mitigates the challenges of attracting and retaining the skilled workforce it needs.

“Even so,” van den Broek said, “That (finding the appropriate skilled workforce) is still a constraining issue for the company.”

Dynamic invested millions of dollars in an expansion about 10 years ago that doubled its building footprint.

Van den Broek said it is still considering whether or not it will use Metric’s space as a stand-alone location or just integrate everything into its Dugald Road facility.

martin.cash@freepress.mb.ca