Attracting more customers key goal for Shape Foods, CEO says

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This article was published 28/05/2013 (4695 days ago), so information in it may no longer be current.

Since Taras Sokolyk took over as Shape Foods CEO just over a year ago, the struggling flax seed plant has experienced an upswing.

In the past 12 to 18 months, the company has added new customers in China, Korea and Taiwan, and has done some restructuring to attract new business.

“The exciting part for me is … we now have customers at our front door looking at our products and what we can do for them, the trick is to turn that to get them to the back door to load,” Sokolyk said. “We’re still not selling as much product as I’d hoped.”

May has been a particularly good month for the plant, with 12-14 shipments sent to seven different countries. Yesterday, the plant shipped a 40-foot container of pure flax seed oil to a regular Japanese customer, C-Pro, who then further processes it into flax oils and dressings.

“We’ve become an ingredient company,” Sokolyk said. “We sell our product to people who put it in other products.”

Shape Foods, which crushes locally produced flax seed into omega-3 flax oil and meal for human consumption, was built in 2006 for $30 million. At its peak, the 70,000 square foot facility had employed 60 people.

After a few years, the previous owner of the plant filed for voluntary receivership. All 60 employees lost their jobs.

Approximately 18 months later, the plant had a new owner, a pared-down workforce and revamped business strategy.

“When the company first re-opened in 2009-10 … they tried to get into the American retail market, which is a very challenging and expensive experiment,” Sokolyk said. “When I got here we took a look at the uses for our product and said, ‘We’re better off looking for the customers who can use our product.’ We’re selling omega-3, we’re not selling flax … Huge difference.”

Sokolyk said there are “huge opportunities” in marketing their product to companies selling omega-3 enriched foods.

“If I can convince one of the major margarine manufacturers in the U.S. that using my product to get the omega-3 stamp on their margarine is better than using fish oil because it’s more consistent … the City of Brandon will be happy, the staff will be happy and the guys I work for will be even happier,” he said.

Currently the plant employs roughly 30 people. But Sokolyk is optimistic that number could grow quickly.

“I’d suggest that can grow with the right series of things happening, that could almost double in 18 months,” he said. “That’s bold, but that’s what we see.”

The plant is also looking into the emerging hemp industry, and other possibilities such as the athletic supplement business and using flax meal as a replacement for guar gum, which is used as a binder in food and in the fracking process in the oil patch.

“We’re around the clock, basically crushing 24/7 but we’re not reaching our capacity,” he said. “There’s more room to grow and there’s a market out there to grow.”

Shape Foods hopes to attract even more international customers.

“We’ve opened negotiations with some South American countries,” he said, adding Europeans have been to Brandon to tour the plant. “It’s been great progress, but lots more to go … Great progress is one measure, profitability is another and … it has to be a profitable, sustainable enterprise to move forward. We’re a lot closer to that today than we were 18 months ago.”

» jaustin@brandonsun.com