How a Stittsville Manufacturer Competes with the China Price

By Bruce Firestone | Uncategorized

Dec 31

The LD Tool Story

[This article first appeared in Ottawa Business Journal]

a non-descript 40,000 square foot industrial building on Iber Road in
Stittsville, co-owner Lawrence (Laurie) Dickson and sales manager Ken Toews sit
down to describe the 22-year odyssey of LD Tool, a custom injection moulding
company located in the westend of Ottawa, from a startup to a low eight figures

Tool began with $30,000—$15,000 from Mr. Dickson and the balance from his
partner, engineer Dave Tait. That was all the equity capital they ever raised.
The rest came from operations which meant if they had no customers, they had no
cashflow and no business so like every entrepreneur before them, they had to
hustle. They’re still doing it a generation later.

is an immigrant to Canada
(by way of South Africa, England and Israel) and is proud of his adopted
homeland. He believes Canadians can compete with anyone, even mighty China. “We
co-opt China.
We do all mould design here in Canada
but work with our Chinese partners on building them there. We recently
completed seven moulds in China
in eight weeks!” Mr. Dickson says enthusiastically. “With our Chinese partners
paying $3/hr and our blended Canada-China working arrangement (Laurie travels
to China every two months),
we can beat out Mexico and Romania (not to mention China itself)
on price. And in terms of quality control, there is no comparison.”

of LD Tool’s largest customers for plastic parts is Calgary
(and Ottawa)
based SMART Technologies. “We can make SMART Boards in Canada and ship them to Romania (a
centre of excellence in this industry) for the same price the Romanians can
make them there,” Mr. Dickson adds. Other clients come to LD Tool for their
design skills and willingness to take on difficult moulding assignments. For
example, they expect to make 100s of thousands of a new double unscrewing cap
for a large gene technology firm—it’s a cap that unscrews first one way
allowing a technician to take a DNA swab and then, by turning it around, s/he
can screw it back in sealing the DNA inside.

is also interesting that material costs (like polycarbonate made in Pickering)
are 10 to 40% cheaper in Canada than overseas which means that the Stittsville
plant is not just a design shop, it manufactures parts as well when it makes
economic sense to do so. As long as parts don’t require a lot of intensive and
specialized labour care after they come out of one of LD Tools massive plastic
injection moulding machines, Stittsville can fabricate them. Energy is a huge
proportion of plastic resin costs and natural gas is relatively cheap in Canada—this explains some of the Canada price
advantage. The rest comes from $2 million worth of robots that work on the
plant floor too so one human being can operate two machines at the same time as
long as s/he has robotic assistants.

Dickson also points out that this isn’t 1998 any longer for China—an apartment
in Shanghai will set you back around $1.4 million and it’s getting a lot harder
to attract labour there as well. The one child China
policy is biting and labour force growth is tapering off not only because
Chinese females are having fewer children but also because in-migration from
rural China
is reaching its inevitable end.

crucial to their clients is that LD Tool warranties all its products in Canada—they’ll
either work first time or they’ll fix them. That is not always the case with
products sourced overseas.

all their products are complicated. One called the Air Tab looks like an
inverted, three dimensional ‘V’. It’s about the size of a man’s hand and screws
onto a truck body—usually there’s a series of them. These tabs (tested and
approved by NASA) change airflow over a truck body from laminar to turbulent
(not unlike what dimples do for a golf ball) reducing suction and hence drag.
Bottom line—it saves about 8% in fuel costs for fleets at a cost of a few

some are complicated like the Eugeny Abushev-designed firearm holsters for
Glock, Browning, Makarov, Sauer and Yarygin pistols that sell for around $250
each. These holsters allow police, other law enforcement and military personnel
to safely carry loaded automatic and semi-automatic weapons, cock them then
draw them without first undoing a strap and fire in 0.38 seconds instead of 1.8
seconds. This is a big difference in a firefight.

Dickson is a passionate Canuck. He lives in Almonte and will tell you he put
500 kilometres on his snowmobile last winter. He has no plans to retire.
Instead, he’s focused on rebranding the company and growing it to more than
double its current size.


Bruce M Firestone, Founder, Ottawa Senators; Author, Quantum Entity Trilogy,
Entrepreneurs Handbook II; Executive Director,; Broker, Century
21 Explorer Realty; Entrepreneurship Ambassador, Telfer School of Management,
University of Ottawa.

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About the Author

Bruce is an entrepreneur/real estate broker/developer/coach/urban guru/keynote speaker/Sens founder/novelist/columnist/peerless husband/dad.