france's saint-gobain keen to capitalize on housing shortage in quebec, rest of canada
including acquisitions, the french building-products maker is investing about $3 billion in canada over three years, ceo benoit bazin said.
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europe’s largest building-products maker sees housing shortages in quebec and the rest of canada as the perfect opportunity to drive sales growth over the coming decade.
fresh from the purchase of pointe-claire-based kaycan and lasalle-based building products of canada for more than $2.5 billion combined, france’s compagnie de saint-gobain is working to expand output at its canadian plants while scouting for additional acquisitions locally, chief executive officer benoit bazin said.
in quebec, saint-gobain is completing a $126-million investment to electrify its wallboard factory in ste-catherine on montreal’s south shore, and make it the first zero-carbon drywall plant of its kind in north america. quebec is providing about $40 million in financing for the project, which will boost capacity by 40 per cent, bazin said.
canada will need to add about 3.5 million residential units by 2030 to restore housing affordability, according to a september projection released by the canada mortgage and housing corporation (cmhc). of that total, about 860,000 new dwellings will be required in quebec, cmhc said.
“canada has some excellent development perspectives,” bazin, whose company is investing about $3 billion in the country in three years, said in an interview in montreal this week. “if we’re investing $3 billion, it’s because we’re confident that this country needs residential construction and that we can build a strong and profitable position here.”
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saint-gobain is so keen on canada that it will be appointing former hydro-québec ceo sophie brochu to its board at the company’s next shareholder meeting, which is scheduled for june 6. brochu, who left hydro-québec last year, is also a director of companies such as information technology firm cgi and flight simulator maker cae.
her nomination “illustrates the focus that we wish to keep on north america and canada,” bazin said. “pretty soon, canada is going to enter the top five countries for us in terms of sales and profit.”
some 3,000 people work for saint-gobain in canada, including about 1,000 in quebec. the company, which has a global workforce of 168,000 and 2022 sales of 51.2 billion euros (about $75 billion), operates more than 800 industrial sites in 75 countries.
annual sales in canada are about $2 billion, bazin said. saint-gobain’s lineup includes certainteed roofing products and gcp ice & water shield waterproofing membranes.
bazin and other senior executives of the company are in montreal this week to hold strategy meetings and visit plants. saint-gobain’s quebec footprint includes production sites in cowansville, farnham, terrebonne and pont-rouge, near quebec city.
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affordable power is one of the main reasons saint-gobain decided to expand in ste-catherine, the ceo said. electricity represents about 20 per cent to 25 per cent of a plant’s annual operating costs, he said.
“when we look at a country, we focus on four key elements: taxation and regulation, infrastructure such as roads and ports, energy and education,” bazin said. “the ability to access green energy is major. in fact, we’re thinking about doing (similar investments) later at other locations in canada because there is a lot of hydroelectricity. low operating costs are a big part of any investment decision.”
recent warnings by quebec energy minister pierre fitzgibbon about a shortage of available electricity for future industrial projects haven’t dented bazin’s optimism. he predicts housing starts in canada and elsewhere will pick up later this year as central banks start cutting interest rates.
“in the short term, there is a bit of an availability issue for hydroelectricity, but fundamentally, i’m confident in the outlook for our business lines in canada,” bazin said. “because of the growth in population, we know that there’s going to be a housing shortage for at least the next 10 years. we’re going to be very busy. it’s also our duty to build faster, better and to invest in training centres.”
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saint-gobain is currently investing $80 million to $100 million a year to modernize its canadian facilities, boost capacity and speed up production, bazin said. a “large” share of the money is being directed to the company’s eight industrial sites in quebec, he said.
further transactions are also a possibility.
“we still have acquisition projects in canada,” bazin said without naming potential targets. “we’re thinking about completing our offering. we haven’t filled up on industrial know-how, innovation or complementary products for our canadian clients.”
asked if the search is ongoing, he said: “yes. it’s active, but when it comes to acquisitions, you need to be two to dance. sometimes it can take time.”
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