East Coast Converters Ltd., like many firms in Newfoundland, was forced to diversify after the island's cod fishing industry collapsed in 1992. Scientists still are not sure why cod nearly disappeared offshore Newfoundland, but the impact on the island's economy was easy to discern. Some 10 percent of the work force lost its livelihood almost overnight and the shock wave rippled throughout the province of Newfoundland.
The cod fishery was East Coast's biggest customer. In a six-month period, the company saw business plumment to about a third of previous levels as fish packaging demand shrank. It laid off 32 of its 50 employees.
``We had to do something to keep the place going,'' Christopher Hutton, East Coast's president, said in a telephone interview from his firm's head office in Mount Pearl.
East Coast turned to making trash bags, a new market for the privately held company but one that it learned quickly.
Its Billy Boot trash bag line, originally started as a stop-gap business strategy, now accounts for about 20 percent of its C$3.5 million (US$2.6 million) in annual sales.
``It went beyond all our expectations,'' Hutton said.
Throughout its 20-year history, East Coast was geared to industrial accounts, especially in the fishery. Getting into trash bags sold to consumers through retail outlets was ``a totally different way of doing business,'' Hutton said.
For the first time the company relied on advertising. It began tapping print and radio media and heavily promoted Billy Boot through free samples handed out in store demonstrations.
East Coast's entry into trash bags was crafted carefully to compete with imports from producers on the Canadian mainland and in the United States. East Coast wanted to make a good impression among consumers because no other company in Newfoundland was making trash bags. East Coast remains the province's only film extruder and bag converter.
``We wanted the product to be associated with Newfoundland,'' Hutton said. To tap into local lore and history, it called its trash bag line Billy Boot, which is a wordplay on the local term for rubber boots commonly worn by fishermen. The bag's packaging emphasizes that they are made in Newfoundland. The packaging also boasts the bags' recycled content and proclaims their durability in the idiomatic slogan ``Some Tick 'n' Tuff B'y.''
East Coast wanted repeat buyers and stressed bag quality and toughness. ``There's no margin to make bags at a junk price,'' said Hutton.
Billy Boot bags are color-coded for size, which makes them stand out next to the generic green colors most imported bags sport. Hutton said the bright colors - pink, green and blue - also allow informal market research on trash days. An East Coast employee can easily sample how many of the firm's bags are at curbside by driving through the island's towns and cities.
East Coast's foray into trash bags was successful but the firm continued to soldier on in industrial markets. It still seeks fishery accounts but is putting more effort into areas where fishing is a healthy industry.
``We've signed up a big part of the Iceland boats that fish near Newfoundland. We're shipping packaging to Africa and are beginning to crack the China and Indonesia markets. We've been going to trade shows and it is starting to pay off.''
Sister companies in the Hutton family that make paper-based packaging help East Coast's offshore economics. Fisheries need corrugated paper, cartons and plastic packaging and the Hutton group ``offers one-stop shopping'' for all three. It's easier to fill up an ocean-going shipping container when all three products go to the same customer.
East Coast also sells locally to food industries, and its shipments to Newfoundland's fishery are inching back up as the industry diversifies from the former mainstay of cod. It is challenging to serve a small local market - Newfoundland province has fewer than 600,000 people - so East Coast focuses on niches such as small runs of decorated packaging. Offshore packaging producers usually will not bother with such accounts because volumes are too low.
Hutton said East Coast has four extrusion lines, seven bag-making machines, a six-color press and recycling equipment to use all its in-house scrap plus some it gets from outside. It exclusively pro-cesses polyethylene because there hasn't been much demand for barrier and vacuum packaging film. It gets its resin in 20-foot truck containers that arrive by boat twice a week from Montreal.
Hutton, his father and two investors own East Coast. It began bag converting in 1976 and started doing its own extrusion in 1984 because shipping costs were high for imported film rolls.
Like all business people on ``The Rock,'' Hutton hopes the codfish will return to Newfoundland's Grand Banks, although he doesn't expect the industry ever will be as large as it once was in this easternmost part of North America. But East Coast has gradually recovered from the cod shock. Sales are back up to about pre-1992 levels and the firm's employment has risen to 32.