The COVID-19 pandemic has shaken and continues to challenge the very foundation of the world economy. However, through the fear, the death and the uncertainty, there has also been light, hope and resilience.
Paper Advance wanted to connect with papermaker Cascades, to discuss how the company is managing to weather the storm. Through thick and thin, the Kingsey Falls business has managed to avoid the hardships many of its competitors have faced, and above all, has demonstrated remarkable agility and resilience in a very challenging time. President and Chief Executive Officer Mario Plourde, answered a few of our questions.
PA: Mr. Plourde, how is Cascades managing overall during the pandemic?
Mario Plourde: Honestly, we have been lucky. All of our operations were declared ’essential services’ and so we were able to continue operations. Whether it be in packaging or toilet paper, we managed to do well. The COVID-19 pandemic was new for everyone and plunged us into the unknown. There was no playbook for such a situation but we put measures in place and only had a limited number of cases in our factories. We dealt with a small flare-up at our Calgary facility, which was quickly controlled (the affected employees were put in quarantine and everything was disinfected to allow the factory to restart quickly).
PA: Your quarterly results for the period of January to March 2020 were extremely solid. Is it entirely the product of COVID-19 or is the reality more nuanced?
Mario Plourde: The demand for tissue paper soared thanks to increased in-store demand. Our toilet paper sales jumped 30%, emptying our stock in one shot. This situation compensated for the closure of hotels and industries that negatively impacted our out-of-home products. Containerboard also performed well based on strong demand for food packaging.
PA: How did Cascades’ respond to COVID-19 as a company? Did you form a crisis unit to manage the situation?
Mario Plourde: We responded on two levels. First, we created an advisory committee consisting of Human Resources personnel, representatives from our operations and communications divisions, several physicians from our health expertise centre, and a lawyer. Collectively, this committee analyzed the impact of each government regulation on our business to ensure we responded appropriately. At the peak of the crisis, the measures we put in place were evaluated twice a week; sometimes even more frequently. Communication proved to be vital to ensure all Cascades employees had access to the most up-to-date information on how we were responding to the crisis, and what we were doing as a company to keep everyone healthy and safe. The same measures were taken with our clients, especially by testing our products at the source to avoid any contamination. We also had to calibrate our response based on region, because the situation was not the same from one place to another. For example, our New Jersey factory found itself at the center of a serious outbreak in New York, while at the same time there was not the same level of danger in Canada.
PA: What impact did the pandemic have on everyday operations?
Mario Plourde: The impact was felt in different ways. With sales, for example, all staff trips were cancelled and approximately 2,500 employees switched to telework. In little time, we had to organize to keep contact with our clients, many of whom were themselves confronted with the same challenges. I want to say here that we were pleasantly surprised by the effectiveness of our people during a pandemic; they accomplished extraordinary work. In operations, both the manufacturing factories as well as the conversion factories were up and running. From a technical point, it was a challenge to maintain our standard for continuous improvement, but we succeeded. Some projects were put on hold but production was stable. The pandemic required that we focus on certain products and we reduced the changes to paper grades on the machines. The result is we increased the production rate while minimizing losses.
PA: From this point of view would you say that COVID-19, despite its constraints, presented a few opportunities?
Mario Plourde: Absolutely. First off, the pandemic tested our ability to respond to the demands of our clients, suppliers, and our employees. Of course, there were certain adjustments to be made, but everyone played their part. And from the point of view of operations, we reduced production stoppages and smoothly managed the demand for our products, all while keeping Cascades’ client approach. The level of loyalty from our clientele also played a vital role. Without them, we would not be here.
PA: For a few weeks we have been in a gradual reopening phase, which has presented its own set of challenges. What has the experience been at Cascades?
Mario Plourde: We are planning for a gradual return of 50-50, with part of our workforce in office, part at home. It’s all about adjustment. The distancing rules remain the same and we encourage wearing masks in our offices. Our responses and measures vary from one operation to another, because the public health rules are not the same in one province, or one country, to another.
PA: Overall, what are your thought on the crisis?
Mario Plourde: The biggest takeaway for me, has been our ability to mobilize people and to get things done and do them well. Given that no one has lived through this kind of a situation before, it’s pretty incredible. It hasn’t been easy – far from it. But we have managed well.
PA: What are you expecting for the next quarter?
Mario Plourde:The first quarter turned out to be a happy surprise for the entire company and its shareholders. That said, it would take quite a clever person to be able to predict with certainty the quarterly results. We know the month of April reported a solid performance, and that typically the second and third quarters of the year are quite strong. I don’t know if we will see a slow down compared to the first quarter of 2020, but we are expecting a rebalancing in tissue paper and strong demand for packing for online businesses.
About Mario Plourde
Mario Plourde has a Bachelor’s degree in business administration, with a focus on finance. After graduation, Plourde secured a position at Cascades. He climbed the company’s ladder quickly. In 2000, Plourde was named President of the Specialty Product Group. In 2011, in recognition of his strategic vision and dedication to the company, he was appointed Chief Operating Officer of Cascades inc. Just two years later he succeeded Alain Lemaire in the highest position at the company by becoming president and Chief Executive Officer of Cascades inc.
Plourde draws on his experience at Cascades by playing key roles within several charitable organizations, associations, and causes. As a director, he has served on the board of Transcontinental since 2014 and of the Charles-Bruneau Cancer Center Foundation since 2015. In 2019, he was recognized for his contribution to sustainable development and clean capitalism in Canada with a Clean50 and Clean16 award. Plourde also served as co-president of the 2018 Bal de la Jonquille of the Canadian Cancer society.
Founded in 1964, Cascades offers sustainable, innovative and value-added packaging, hygiene and recovery solutions. The company employs 12,000 women and men across a network of over 90 facilities in North America and Europe. Driven by its participative management, half a century of experience in recycling, and continuous research and development efforts, Cascades continues to provide innovative products that customers have come to rely on, while contributing to the well-being of people, communities and the entire planet. Cascades' shares trade on the Toronto Stock Exchange under the ticker symbol CAS.