2022 was another record-breaking year for Friesens Corporation. According to a year-end report, the Altona-based print and packaging manufacturer broke records for revenue, profits, and the number of employees, led by incredible results from its core business, the Book Division.
CEO, Chad Friesen, attributed this continued success to several factors, some dating back several years. That includes investments of over $40,000,000 in equipment, expanded facilities, and new technology.
"We didn't do that knowing that there was going to be a big surge in retail book sales in North America, but when that happened, we were very well positioned to accept more volume at a time when the print industry or the book manufacturing business in North America had actually lost a bunch of capacity over the last 10 years,” explained Friesen. “And so, Friesens was in this ideal position where publishers across the U.S. and Canada were looking to onshore production of their books into North America. Friesens, being a great option for them because we're in close proximity to most of the major publishers, were within two-day shipping to almost every location in North America. And so that positioned us very well to take advantage of what's actually been a surge, an unexpected and uncommon surge in retail book sales across the country. That was in 2020, 2021, and 2022, and so we were just in the right place with the right amount of capacity."
Friesen also credits some of the increase in dollars to the increased cost of raw materials like paper, ink, and other inputs.
"We have to pass those price increases on to our customers as well. And so, it's not just solely more volume that's been coming into the business, it's also been a bit of a price reflection as well because the cost of everything has just been increasing so rapidly."
While demand is slightly tapering, sales remain ahead of pre-pandemic levels, and Friesen is confident in all four of the company's businesses in 2023 and beyond.
"We're not expecting to have the exceptional growth that we've had, but we remain very excited about our business and that the company will continue to grow and be profitable," he explained. "There will be a little bit of a return to a more normal reality but ultimately, we're making strategic moves to keep growing for the next decades...we continue to make long-term plans for the growth of the business."
Those investments include a record $19 million capital budget for several new presses in 2023, including the largest single investment by the company in a printing press. A new Timson T48 will arrive in 2024.
"These new presses that are coming in are replacements for some of our equipment, but they also bring to the table more output, more efficiency and we're able to produce more product with the same number of people," explained Friesen.
One of the new presses, the most expensive press ever purchased by the company noted Friesen, produces a black-and-white product - a break from the colour products the company has built its reputation on.
In the 2000s, Friesens introduced a black-and-white paperback business with the idea of meeting this additional demand from customers. The thought at the time, explained Friesen, was that this area of printing would have a short lifespan given that part of the business would get replaced with e-readers or other technologies that were coming on stream.
"But our black-and-white book business has been our fastest-growing business over the last several years," he said. "It's exciting for us because we know the dynamics of the business and where we're growing, but we would have never thought several years ago that we would be putting that kind of investment into a black-and-white printing press."
Additionally, there were many other achievements last year as well.
The company-wide theme for 2022 was “You Own It” with a focus on celebrating and promoting employee ownership. Last year $5,000,000 was distributed to employee owners (a 200% increase from the prior year). The average employee-owner received almost $10,000 in ownership benefits. As well, Friesens announced earlier this month that another $2,250,000 will be distributed to employee owners in the month of January.
"One of the pillars for our company is that we take care of our customers, which then benefits the company and then the company owners which then has a trickle-down effect to the community," explained Friesen. "We know that when we are able to distribute five million dollars of employee-ownership benefits, that translates into people being able to help their kids go to school, help buy cars, help pay for renovations to their homes and all sorts of different expenditures and that turns into an economic lift for the community."
The company also helped out a few notable groups in 2022:
· the Employee-Directed Giving Program distributed gifts to numerous local charities.
· Kiddie Sunshine Centre expansion
· Book Publishing Associations
· I Love to Read Month
· Mennonite Central Committee
· Gallery in the Park
· Community Exchange
· Altona Community Gardens
· Altona Memorial Health Centre (recruitment of nurses)
· Gardens on Tenth
· Altona Library Project
· YFC Altona Drop-in Center and Makerspace
· Stars Air Ambulance
· And many more
Additionally, most of the company's corporate goals were achieved last year, including:
· Reducing job vacancies by hiring a net new 52 people to join the company.
· Paying at least a ‘living wage’ to every employee. Most positions pay much more.
· Kicking off a new leadership development program for aspiring leaders
· Increasing our understanding of indigenous culture and obstacles
· Preparing for an Enterprise Resource Planning (ERP) replacement
· Building new automation and robotics solutions
· Developing a corporate diversification strategy for the future
The year wasn’t without its challenges though, noted Friesen.
The Russian invasion of Ukraine displaced millions of people and like many Manitoba companies, Friesens welcomed 13 Ukrainian newcomers and their families. Inflation reached levels not seen since the 1980s and there seemed to be endless predictions of a looming recession.
With all the talk of recession in the news, Friesen reassured staff that the company is financially strong, and jobs are safe.