2242749 Ont Ltd. AIIFF

RE:RE:RE:RE:What's the plan for 2014? How low will this go.

[Thethruthhurts]

Rusty and Razor, The key thing to remember about Armtec is their ability to compete in today's market place. All of their manufacturing capabilities are very very very dated. The company is desperately needs a major capital program to improve both process and capacity. They can tell you all they want about "lean manufacturing" but what is it relative to? It is relative to their old numbers not to those of their competitors. Armtec's major competitors have heavily invested in better technology and have lowered manufacturing costs. Most of Armtec's companies own very dated equipment and processes. Both the Boucher and Precon division have little to no automation at all. Their man hours per tonne of produced material costs are well above the standards of the industry. Brooklin concrete products is most likely the same. Where they might have a more automated process the dyes and machinery are severely dated. This company is not run but industry people it is run by accountants and it was assembled by an accountant who really had no idea what he bought. While Mr. Anderson has a good career track record with Lafarge Armtec's role in the construction and infrastructure supply chain doesn't compare to that of Lafarge. Kevin Young knew little about the sector and paid the price for just spinning numbers that were not yielding market share growth because he lacked industry relationships to do so. His Sales managers were put in place based on loyalty and not ability. The replacement for Mr. Young's replacement is in the same boat and will have the same impact. The construction industry in Canada is built on relationships and support. This company doesn't get that. You need to hire people that know people that can get involved in key projects from the inside. You need to know the players and start far enough upstream in order to be successful. They don't have the ground troops any more and they are rapidly losing know how within the divisions. Image is everything to the company. Its always been about spin and not substance. On paper the company sounds great as Canada's only national infrastructure supplier. But it only sounds good and in a country that is very regional it really matters not. So long story short this group should be broken up and sold for pennies on the dollar to groups that are willing to invest in the company and make it something from the ground up. Management restructuring will do little to impact the costing of goods produced and the ability to sell them. Corrugated steel pipe is not steel pipe; Armtec's plastic pipe is a low quality poly ethylene pipe that wouldn't be installed in most other jurisdictions in North America. With the exception of ConForce the Concrete products are produced in the most low tec facilities in Ontario and are not being lead by anyone with the vision that allowed them to be low bid on the TTC and York Sanitary Sewer. Hunter Harrison could not save this company in this situation. Break it up and sell it. and that is the sad Truth