How a 60-year relationship helped a Canadian business thrive4 min read
René J. Leclair had long dreamed of running his own business. When a small Quebec manufacturing company went up for sale, this longtime banker jumped at the chance.
Thanks to this purchase, in 1954, Mr. Leclair founded the Emballage St-Jean company, located in Saint-Jean-sur-Richelieu, which then had less than 10 employees in a 5,000 square foot factory. In 1962, he tried to get a loan to grow the business, but the traditional creditor repeatedly refused him. His luck changed when he came into contact with Roynat Capital, a lender and investor specializing in Canadian mid-market companies.
“In his moments of need, Roynat helped my grandfather. And obviously everything has been going well since,” said Marc Leclair, President and CEO of St-Jean Packaging, and third generation to lead the packaging company.
Six decades later, St-Jean provides flexible packaging products to leading food and consumer products companies worldwide, with wholly-owned subsidiaries in the United States, Mexico, in the UK, China and Vietnam.
This first transaction with St-Jean was only the third for Roynat, which was created in 1962 to finance real estate and commercial equipment, before expanding its offer to non-traditional and innovative financing solutions. Since that day, the two companies have worked closely together.
“This is the kind of fruitful relationship that the innovative and flexible lender and investor has sought to foster over the past 60 years by partnering with companies like St-Jean
“At the heart of what we really hope to achieve is the creation of shareholder value,” said Mr. Proudlock, who works closely with St-Jean. “We want them to maximize their capabilities, knowledge and expertise by giving them the capital they need to execute their strategies and seize the opportunities that arise in the marketplace. »
Roynat also thrived alongside its customers. After opening its first office in Montreal in 1962, its success spurred its expansion across Canada, and in 1970 this innovative lender opened regional offices in Vancouver, Toronto and Halifax. By 1981, Roynat was present across the country and became a wholly owned subsidiary of Scotiabank in 1994.
Today, as Roynat celebrates its 60th anniversary, the lender works with more than 1,300 clients across the country, with more than $6 billion in loans and other financial products under management, as well as with its private equity, Roynat Equity Partners. It now has 25 offices and more than 200 employees.
“The success of Canadian small and medium-sized businesses is essential to the prosperity of the country’s economy,” said Matt Tedford, Senior Vice President and Head of Roynat Capital at Scotiabank. “Roynat has been proud to support and collaborate with businesses like St-Jean for six decades, offering them advice and financing options that go beyond traditional loans. »
“We trust the company and they trust us. We have been partners for 60 years and always have been. – Olivier Proudlock, Associate Director, Roynat Capital
And there have been many. Since this first transaction for the acquisition of a new building in 1962, under the direction of René Leclair, and subsequently of his sons Jacques and Paul, St-Jean has acquired Packaging Industries Ltd. to Montreal. In 1987, it acquired Montreal competitor JT Packaging Ltd., which marked St-Jean’s breakthrough into the personal care market.
In 1990, the third generation of Leclairs joined the ranks, including Marc Leclair, Jacques’ son.
It was in the early 2000s that St-Jean began to concentrate its product line. Instead of producing more than 40 different product lines, the company looked at which products had potential above the industry average, Leclair said. The company’s extensive research found bundle bags (plastic bags stacked and held together by thin wire or with a staggered opening, for items such as bread and baked goods) to have this potential. They stopped making the other products and reoriented their strategy.
“It was very brave, especially from my dad and uncle, because obviously they had spent decades working on these other products,” Leclair said.
The gamble paid off, and the time factor also worked in their favour. In 2002, the value of the Canadian dollar fell to around US$0.62.
“We suddenly became competitive and quickly got a few big clients in the United States,” Leclair said.
“In a moment of difficulty, Roynat helped my grandfather. We can see that things have gone well since then. – Marc Leclair, President and CEO, Emballage St-Jean
Between the early 2000s and 2020, St-Jean has experienced a compound annual growth rate of around 11%, compared to an average rate of around 3% for the flexible packaging industry, Leclair said. .
Their trajectory changed, as with most businesses, when COVID-19 hit. The food industry, to which St-Jean supplies packaging, has seen a surge in demand, but supply chain issues and shipping challenges have emerged globally.
For its part, St-Jean has again taken proactive measures to position itself for potential growth. With Roynat’s support, the company completed the May acquisition of Plásticos Uribe, a vertically integrated manufacturer of flexible packaging products in Jalisco, Mexico.
Establishing a significant manufacturing presence in Mexico allows St-Jean to be a stronger and more reliable supplier for its North American customers, said Mr. Leclair.
“With improved availability and proximity to the US market, we believe this will be very useful, Roynat has been a trusted partner for as long as he can remember, even while accompanying his father, Jacques, on various meetings with the creditor.
“I have witnessed this over the past few months when we were going through a very difficult time. Everyone we talk to is really, sincerely trying to find solutions with us. »
It’s been a tough time for many companies, but St-Jean is in an excellent position to emerge stronger than its competitors, particularly through the acquisition of Mexico, Mr. Proudlock said.