John Lee is President of Sinobec Trading Inc.Supplied
John Lee was working for Quebec-based discount retailer Dollarama 20 years ago when he came up with the business idea for Sinobec Trading Inc.
Mr. Lee saw the world-beating advantages Quebec had in the mining and manufacturing of aluminum, and he started the company to export the metal in various forms.
China was Sinobec’s sole export market at first. Mr. Lee is a native of China, he knew the market well, and demand for metals in the country was booming. Montreal-based Sinobec now has offices in four Chinese cities. But Mr. Lee wasn’t content to have his business serve only one market, recognizing tariffs and trade wars alone could prove crippling for a company dependent on it.
Sinobec established an international manufacturing and supply base to reduce its dependency on one country or supplier. “Today, 90 per cent of our business is outside of China,” says Mr. Lee, who co-founded Sinobec with his wife Wei Lu.
Fabricating aluminum frames for solar-power applications currently comprises the largest share of the fast-expanding business. Its largest markets by sales are the United States, the European Union, Mexico and Canada.
For U.S. solar producer customers, a key selling point is what Mr. Lee touts as “green aluminum,” produced in Quebec with predominantly low-emission hydroelectricity. Aluminum is also the most abundant metal on the planet and it is infinitely recyclable.
Beyond solar panels, the company has entered the burgeoning electric vehicle (EV) market, which prizes aluminum components for their light weight. With so-called ‘green’ technology now a major focus of the Biden administration in the United States, Mr. Lee expects EV components to become a larger part of his company’s future growth.
Eager to expand beyond his aluminum products base, and again a fast follower of trends, Sinobec purchased MedSup Medical, a Quebec-based wholesaler of medical instruments and personal protective equipment (PPE).
With four distribution centres across the country, MedSup has become a major player in the country’s pandemic response. MedSup sells PPE, including face masks, to retailers such as Costco and recently won a contract with the Quebec government for 70 million locally produced COVID-19 rapid tests.
Recycling is also a major focus for the medical side of the company. For example, all the face masks it produces are recyclable, and it has a facility in Quebec to recycle masks, syringes and COVID-19 testing kits, among other health supplies.
Not content to simply grow from within, the company is close to concluding another acquisition: the purchase of a Toronto company that operates a 130,000-square-foot warehouse for metals storage and supply.
Despite its enviable status as a fast-growing and profitable Canadian export champion, Sinobec faces hurdles that are similar to most other exporters, namely keeping on top of its supply chain during the pandemic and dealing with rising costs from disruptions that include COVID-19 shutdowns and, more recently, the war in Ukraine.
“The cost of shipping and freight is by far the most challenging” for exporters, says Corinne Pohlmann, the Ottawa-based senior vice-president of national affairs and partnerships with the Canadian Federation of Independent Business.
Sinobec has sidestepped some of the headaches related to shipping by building manufacturing facilities in its major markets, an advantage not all Canadian exporters enjoy.
“Customs processes, this is something that particularly for smaller companies can be a challenge,” Ms. Pohlmann says. “Understanding the customs processes in the country you are exporting to, what are the requirements, what is the paperwork that needs to get done, who do you have to talk to, and making sure that you have all the approvals in place prior to shipping.”
Mr. Lee’s answer to the pandemic-related supply chain shocks of the past two years has been more growth and new sources of supply.
“Our company solution is globalization,” he says, noting Sinobec has suppliers from Asia, Southeast Asia, the Middle East, Europe, Mexico and South America. “With suppliers all around the world, we can avoid supply chain stops and distortions.”
Sinobec is expected to reach close to $1-billion in annual sales this year, a stunning increase from the $620-million in sales generated last year. The majority will be from the aluminum business (approximately $800-million), with the remainder in medical supplies.
It has approximately 350 employees worldwide, with 150 people working in Canada in four provinces.
Mr. Lee also notes that rising inflation is a key concern for Sinobec’s business. The company hedges the costs of aluminum to smooth out price increases and it signs one-year freight contracts to provide some certainty on shipping costs.
The other issue for Sinobec is closer to home, namely a tight labour market in Canada. The company has experienced a worker shortage in its warehouse operations and it has responded with an aggressive hiring push the past three years and “providing very good benefits to our employees” to attract new workers.
The next big push for the company will likely be close to home. Mr. Lee says he’s currently exploring constructing an aluminum-foil plant in Quebec to supply beverage manufacturers.
“The Coca-Cola Co. has shown interest. If they can buy the aluminum foil by hydropower manufacturing, they don’t need to pay any carbon tax,” Mr. Lee says.