A family-owned Thunder Bay fastener company has landed a lucrative distribution contract with Home Depot Canada.
GRK Fasteners President Uli Walther said the deal was made through its parent firm, ITW Canada, and product is shipping immediately.
ITW, also known as Illinois Tool Works, is a diversified manufacturing conglomerate with operations in 57 countries with a workforce of close to 60,000.
The value of the contract is under $1 million and the term is open-ended, “as long as we keep shipping on time,” said Walther.
The deal only applies to Home Depot's 185 stores in Canada, but Walther said they are working on a contract to expand distribution into some of the retailer's 2,100 stores in the U.S.
“If everything works out, we may be into 50 per cent of those stores by the end of next year.”
Founded in 1990, the company makes high-quality screws used in wood, metal and concrete construction which are distributed at GRK's 40,000-square-foot facility on Rosslyn Road.
Though designed in Thunder Bay, GRK uses exclusive manufacturers in Taiwan, Switzerland and Germany. The product is exported to the warehouse in northwestern Ontario for shipment to customers in the U.S.
The U.S. has always been GRL's mainstay market as its fasteners are favoured by contractors and deckers for high-end homes.
Until this deal was sealed, GRK product was only available to consumers through independent hardware stores.
Like many forest product companies, GRK is hoping to ride the wave of an anticipated rebound in the U.S. homebuilding market over the next two years.
“Big time,” said Walther. “We are well ahead of last year's pace with the home construction and renovation market.”
Walther said this deal is a sign that contractors and home improvement retailers want top-quality, building code-approved products rather than cheaply made fasteners.
“What's important to us is that we are among the very few, if not the only company, which can provide and supply code-approved fasteners. That's a big issue in the U.S.”
Walther said the new contract has resulted in the creation of 10 jobs to add to its local workforce of 52 employees.
“We have our hands full to make sure that we can supply the market. Success breeds success. We are getting, on a daily basis, calls from all over the world asking whether we would distribute our product.
“When I look into the face of my sales manager and tell him we should take on another 12-20 SKUs (stock-keeping units), I'm sure he would like to give me the finger.”
Walther said this expansion has been made easier by a favourable trade ruling in 2010 that could have resulted in GRK being sold and moved to the U.S.
GRK Fasteners was granted a crucial product exemption by the Canadian International Trade Tribunal that kept the company operating.
GRK was accused by its Canadian competitors in 2004 of dumping product into the domestic market.
The complaint led to the Canada Border Services Agency slapping an eight per cent tariff on its carbon steel screws which was later hiked to 170 per cent.
The company fought the tariff and applied for a product exemption – and relief from duties – which led to a five-year struggle that cost the company millions in legal fees.
GRK successfully argued that there is nothing comparable to its patented product on the Canadian market and therefore no domestic manufacturers were being injured. After a four-day hearing, GRK was granted product exclusion on 13 of its trademarked and patented screws.
“Now we're duty-free,” said Walther. “We don't have to pay anything. It was well worth it to spend a quarter of a million dollars in fighting the federal government.”