Jyco Sealing Technologies Inc. has secured a C$6 million (US$4.8 million) loan from a Quebec agency to help it compete and succeed during the economic downturn.
The Dexter-based thermoplastic vulcanizate sealing company announced last month it qualified for the loan from Investment Quebec to preserve and create jobs at its primary North American factory in Sherbrooke, Quebec.
The money comes from the agency's Renfort Program, which helps businesses experiencing temporary difficulties during the current economic situation.
A company that carries out its main activities in the province is eligible if it has been in operation for at least three years, has generated positive funds at least two of the last three years with a positive total during that period, and has demonstrated its liquidity problems are temporary and profit outlook good.
We needed to show that we're still a growing company, said Shawn Jyawook, Jyco vice president and chief operating officer.
[The recession] has been a seismic event in our industry, but with some help we know we can maintain what we have, weather the storm and continue to build our business, he said.
Companies borrowing money from the Renfort Program have up to 10 years to repay it, according to Investment Quebec.
Jyco did not specify what it will use the money for, but the eligible projects outlined by the program are equipment acquisition or increases in working capital, including refinancing of debts.
The company operates 16 production lines at the Sherbrooke plant, which opened in 2000, Jyawook said.
The reinforcement of the loan has helped Jyco recently gain about US$3 million in new sales, Jyawook said.
Showing customers that the firm is not at-risk is a key to getting business during a down cycle, he said.
Some of that new business will come from former customers of Nicholas Plastics LLC, an Allendale, Mich.-based plastics extruder that recently announced it will close its operations, primarily because of the downward spiral of the automotive market.
Three years ago, about 95 percent of Jyco's TPV sealing business was in the automotive sector, but with the decline of demand in that market, the company has reduced the share to 75 percent, said Jyawook.
The company over the last two years has expanded its customer base into construction, appliance and other industries, but with much of its manufacturing dedicated to automotive, the market's downturn still cut deeply into production demands.
Also, Jyco has consolidated in Sherbrooke since 2007, in anticipation of demand declines, Jyawook said.
Jyco employs between 250 and 300 total at its Sherbrooke site, its Dexter headquarters and engineering center, and international sites in Belgium and Japan.