Big companies a welcome market, but supply firms look elsewhere.

• Author: Bickford, Paul
• Position: Manufacturing Report

Big companies a welcome market, but supply firms look elsewhere

The large mining and forestry operations of Northern Ontario are blessings for service and supply firms.

However, it is possible to have too much of a good thing.

If a smaller company becomes totally dependent on one or a few large customers, its economic health is no longer in its own hands. A downturn for the larger industry could be fatal for the supplier.

However, it appears Northern Ontario firms realize that potential dilemma all too well.

Even firms which are prospering along with large mining and forestry companies are keeping their eyes open for other opportunities.

C&G ELECTRICAL

Most of the work done at C&G Electrical Contracting Ltd. of Elliot Lake is in the mining sector.

However, manager Gerry Hall noted that the firm is branching out by doing transmission line work for Ontario Hydro and Great Lakes Power. It recently built a transmission line near Kapuskasing, for example.

C&G Electrical is also bidding for work on the recently announced hospital in Blind River. Hall said the company goes looking for work anywhere in Northern Ontario.

"We do what we have to do to make a living."

C&G Electrical has been in business for two decades. Hall said the company started small, by wiring houses, before moving on to apartment buildings and shopping centres.

However, it is in the mining industry that C&G Electrical has had its biggest projects so far.

Projects include work valued at $650,000 at Dension Mines in 1986, $2.5 million at the American Barrick gold mine near Kapuskasing in 1988 and $2.5 million at the gold mine in Hemlo in 1984 and `85.

J&J MACHINE WORKS

J&J Machine Works in North Bay also tries to avoid being tied too closely to one industry.

"We have many clients," said Jim Hone, co-owner and president of the firm. "We're trying to stay diversified."

However, Hone pointed out that everyone deals with mining companies because it is a lucrative market. Mining companies account for 60 to 70 per cent of J&J Machine Works' business.

However, Hone said the company is trying to enter such areas as pulp and paper, even though mining will still remain its mainstay.

He realizes that dealing only with mining firms could be perilous in the event of a downturn in the sector.

"If you deal only with them, you're left holding the bag."

The company did a lot of work with the recently closed Sherman and Adams mines, along with the downscaled Rio Algom and Denison mines operations...