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Rahumathulla Marikkar lost his job to the Great Recession in 2009. He then arranged the financing to launch his own business, carpet tile maker Belletile Inc. (Moe Doiron/The Globe and Mail/Moe Doiron/The Globe and Mail)
Rahumathulla Marikkar lost his job to the Great Recession in 2009. He then arranged the financing to launch his own business, carpet tile maker Belletile Inc. (Moe Doiron/The Globe and Mail/Moe Doiron/The Globe and Mail)

Remade in Canada

Canadian factories find a new way to make it Add to ...

Dealing with workers whose worlds were upended by the decline in manufacturing employment remains one of the most important challenges facing federal and provincial governments. Most of these people are in their 50s – a purgatory that leaves them a decade or more from being able to collect retirement benefits, yet lacking the education and skills to persuade an employer to select them over younger candidates.

Belletile rolls the dice

When he learned that Interface was planning to shutter the Belleville facility, Mr. Marikkar, now 60, had put in 19 years.

“I had job offers from other places. Much easier jobs; I would have made good money,” he says. His wife and three daughters urged him to take one of those jobs.

But Mr. Marikkar decided to work with a couple of colleagues from the Interface plant to set up their own carpet tile business. He was convinced he had some critical competitive advantages over both older, bigger manufacturers such as Interface and lower-cost producers churning out carpet halfway around the world. As he weighed starting his own business, Mr. Marikkar and his colleagues were spurred on in part by customers looking for a local carpet tile supplier that would be able to deliver orders in time.

Demand for carpet tile – a market of between $90-million and $100-million in sales annually in Canada and $900-million in the United States – is growing by about 4 to 6 per cent a year as developers replace standard broadloom with carpet tiles. Pulling up one or two pieces of carpet tile allows access to a subfloor to install or repair wiring.

Any number of countries – Iran, China, Brazil, Thailand – can produce carpet tiles at a much lower cost. But Belletile, like many of the Canadian manufacturers that are now driving the sector’s recovery, has found a specialized area of its market where it is able to add value.

In this higher-end market, “the developed countries have maintained a lead,” Mr. Marikkar says.

To meet stringent North American smoke and fire regulations and to inhibit the buildup of static electricity, Belletile makes the tiles out of nylon fibres. This material is more readily available in North America than in developing parts of the world.

Belleville’s location near the eastern end of Lake Ontario and proximity to the big commercial real estate markets of Montreal and Toronto gives it an edge against bigger rivals farther away that face higher transportation costs. The list of competitors includes Interface, which now supplies Canada out of its U.S. plants.

Shortening the distance to customers is critical to Belletile’s bid to capitalize on the growing trend of developers putting up commercial buildings that meet the criteria for LEED (Leadership in Energy and Environmental Design) certification, which include reducing energy use for transportation.

To get started, Mr. Marikkar and his colleagues secured a $2-million (Canadian) loan from the city of Belleville and spent $1-million of it on equipment to set up an assembly line. The Ontario government came up with a grant of $2.8-million.

Mr. Ellis, the mayor, says the Interface plant was one of the “flagship industries” of the city. When Belletile showed the city its business plan, Mr. Ellis says he had confidence that Mr. Marikkar’s plan would help to protect the jobs at risk – and highly skilled jobs at that.

Mr. Marikkar and his colleagues found creative ways to get up and running quickly so they could start taking orders. The group built a new production line in a matter of months, not the usual two or more years it takes to establish a carpet file factory. They were able to do that in part by buying some equipment that had been used to make seat covers for automobiles and modifying it to make carpet tiles.

The plant has been set up to minimize waste, both of the materials in the tile itself and the chemicals needed to suppress smoke and flame. It was also designed so that the line can be stopped as soon as there is a problem, another step in reducing waste.

The customers who urged Mr. Marikkar to set up shop followed through with orders. There are now 17 employees running tufting and cutting machines, including Mr. Taylor, the 55-year-old mechanic who was unemployed for eight months after Interface closed.

Some of the former Interface employees offered to work for free. They’re not; the minimum wage in the plant is $17.50 an hour.

As Belletile works on signing up dealers and selling to customers, the production line is running a couple of days a week. By next month, Mr. Marikkar hopes to be rolling carpet tiles off the line five days a week. By next year, he plans to employ 31 people.

Eventually, he aims to have 80 people working on his assembly line at the warehouse he found in a small industrial enclave sandwiched between a leafy residential area and Belleville’s main CN rail yard. It’s just three kilometres away from the old Interface factory, which sits idle in the north end of town.

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