The comeback of Vic De Zen

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As his car rolls through an industrial subdivision north of Toronto, Vic De Zen sweeps his arm toward long blocks filled with sprawling manufacturing plants and low-rise office buildings.

"We built this," he says. "There was nothing here four years ago."

The unstoppable entrepreneur is touring the empire he is building in the Vaughan West business park in Woodbridge, just north of Pearson airport in the City of Vaughan.

The speed of the development is astonishing, transforming mostly bare land into a business-filled neighbourhood within just a handful of years. In one nearby pocket at the intersection of Highway 7 and Highway 27 in Vaughan, Mr. De Zen says he has built 15 million square feet of industrial and commercial space in 10 years.

But the fact he is doing it at all is the bigger surprise.

At age 70, Mr. De Zen is several years into a master plan to rebuild a new version of his now-infamous Royal Group Technologies Ltd., the plastics company he founded in 1970 but was forced to leave in 2004 after scandal erupted about related-party deals in which Mr. De Zen allegedly blurred lines between the public company's business operations and his own private dealings.

Mr. De Zen and five other former executives were eventually charged with fraud in connection with two business transactions at Royal Group – one related to a warrant offering and the other to a land deal near Royal Group's head office – but a judge found all the accused not guilty of all charges in late 2010, saying there was no evidence of wrongdoing.

Even before the trial was under way, Mr. De Zen was designing his comeback, spurred, he says, by calls from former employees, managers, customers and suppliers to start anew.

Today, his new business has two main thrusts: a large real estate and property development operation called ZZen Group of Companies Ltd. that was launched in 2002 with a particular emphasis on building commercial and industrial buildings in Vaughan; and manufacturing company Vision Group of Companies launched in 2008, which has nine sprawling plants employing over 1,000 people making products like windows, doors, fencing and decking.

His newest Vaughan West industrial park sits on 600 acres of land owned by the real estate division. It includes not only his manufacturing plants, but also numerous other industrial, warehouse and office spaces built for third parties such as Sobeys Inc., Adidas AG, Burnac Corp. and Conair Corp.

The development also includes a new Holiday Inn built by ZZen Group next door to a construction site where ZZen is now building a 152-room Westin Hotel.

ZZen Group also includes a beach resort that Mr. De Zen built in St. Kitts, and has become the Caribbean island's largest employer. The controversial development was the subject of an extensive police probe into whether Mr. De Zen used Royal Group money or assets on a private development project, but St. Kitts never became the subject of legal proceedings against him.

Vision Group is a copy of what Royal Group was before it was sold in 2006 to United States manufacturer Georgia Gulf Corp., selling similar lines of building products. The parallels are no accident: "We tried to build back to Royal," Mr. De Zen says.

But there are key differences, too. Unlike Royal, for example, Vision Group will remain privately owned, Mr. De Zen says, avoiding the loss of control that comes with selling shares to the public.

And while Royal Group once had sales of $2.3-billion and operations in 65 countries, Vision Group is so far a $400-million company with operations only in Vaughan. The company plans to open manufacturing facilities in the U.S. and in Western Canada, but will not expand manufacturing operations beyond North America, where the business climate is familiar and stable.

Many of the former Royal Group's Canadian operations – which are just blocks away and visible from Mr. De Zen's new land – have been shut down or sold, and many of the jobs have shifted to the U.S. The job losses, which hit more than 3,500 of his former employees in the early years after the company was sold, were a key reason for launching his new business, he says. Many of his current employees came from Royal Group.

"It made me sick, because I tell you in Woodbridge we were the biggest builder in industrial and the biggest employer in Woodbridge," he says, his Italian accent still thick after 50 years living in Canada. "And to build a company over 30 years and destroy it like that, it's not nice at all."

Joseph Sgro, general manager of ZZen Group, says the loss of Royal Group and the criminal case took an "emotional and physical toll" on Mr. De Zen.

Mr. De Zen is reluctant to discuss hard times, acknowledging only that it was "tiring." But he has not lost any of his passion for business, working long hours every evening and typically making his last phone calls at 10:30 or 11 p.m. While his sons Sergio and James also left Royal Group and work with him at ZZen, Mr. De Zen says he has no plans to retire and hand over control to the next generation.

"A lot of men Vic's age have hobbies, but this [business] is his hobby," Mr. Sgro says.

Even when Mr. De Zen travels to ZZen's resort in St. Kitts – a sprawling beach and golf complex run by Marriott – his favourite way to relax is to work on small repairs.

"He actually has a tool belt when he goes down there … He's in the office [in St. Kitts] for a couple of hours and then he walks around the resort and he fixes doors and talks to the landscapers," Mr. Sgro says.

Luciano Galasso, a former Royal Group executive who was also charged and acquitted in the fraud case, says Mr. De Zen could have retired in 2004 when he stepped down as CEO. (He was later ousted as chairman following a forensic investigation into related-party dealings.)

"I believe with all these very successful entrepreneurs, it's in their DNA, all that passion," says Mr. Galasso, who is now a partner in ZZen Group.

"Champions like Vic definitely keep playing. He's been a patient man throughout this whole process, a patient man with a vision. And passion and dedication trump all."

The hardest part of all the scandal for the accused in the case, Mr. Galasso adds, were false allegations and rumours that never became issues in the criminal charges – inaccurate suggestions of money laundering and other serious crimes.

"What was worse than the court case were the unfounded and unfair accusations," Mr. Galasso says. "That was much worse than the court case itself."

The silver lining in the loss of Royal Group, Mr. De Zen says, is that he can improve upon Royal's manufacturing operations in the second go around. Vision Group's plastic extrusion plants are better designed after learning from Royal and are equipped with state-of-the-art technology.

It took just over a year after relaunching manufacturing in 2008 to hit $100-million in annual sales, and Mr. De Zen predicts it will take just five more years to reach the $1-billion mark.

"It's easier to start with a brand new piece of paper," Mr. De Zen says. "That's why we are able to compete much easier and get customers back easier and grow faster. About three times faster."