HOME IMPROVEMENT INDUSTRY SUPPLY CHAIN CANADA

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HOME IMPROVEMENT INDUSTRY - SUPPLY CHAIN CANADA

• David W. Campbell, CRBSC Chair
• Lumber and Building Materials Association of
  Ontario

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• Umbrella Organization for the 5 non-profit
  building supply trade associations in Canada.
• Representing the majority of the independent
  retail businesses and their key suppliers
• Provide a national voice for advocacy at the
  federal level
• Co-ordinate national program

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The Lumber and Building Materials Association of
Ontario

• Incorporated 1917, Non-Profit trade association
• Member owned
• Members are Independent Building Supply
  Retailers and Suppliers
• Provide programs and services
• Health and Safety
• Compliance and Certification
• Marketing and Product training
• Annual trade show
• Social and networking opportunities
• Affinity Programs Insurance Etc.
• Advocacy Provincial Federal

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Home Improvement Retailers in Canada

• Box Stores
• Home Centres
• Building Supply Retailers
• Other Retailers

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BOX STORES

• HOME DEPOT (Global)
• RONA HOME GARDEN (Canadian)
• LOWES (2007) (Global)
• 80,000 sq. ft. plus
• Majority are Corporately owned
• Purchasing done direct from vendors
• Large Inventory selection by category and depth
• One stop shopping

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Home Centres

• Smaller than box stores but still large
• Split between corporate, private and joint
  venture ownership
• Dominant in smaller cities and marketplaces
• Inventory categories similar to box stores but
  not the same depth
• Purchasing done through distributors and direct

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Building Supply Retailers

• Prominent in smaller towns and markets
• Privately owned
• Usually contractor oriented
• Smaller showrooms and inventories
• Limited in categories and depth of inventory for
  consumers
• Focus product and services on contractor, DIY
  market
• Purchasing hardlines primarily through
  distributors and building materials from
  distributors and direct
• Offer convenience of shopping and good customer
  service support

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Other Retailers of Hardware Products

• Hardware Stores (Home Hardware, Ace, TruValue,
  RONA, BMR)
• Department Stores (Sears, Bay)
• Specialty Stores (Canadian Tire, TSC)

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NATIONAL BUYING GROUPS WITH DISTRIBUTION AND
FRANCHISE IDENTITY

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Franchise Programs

• Home Hardware, Home Hardware Building Centres
  National Program
• RONA Hardware, Box Stores, Building Supply
  Dealers-National Program
• TruServ Canada TruValue Hardware
• Ace Hardware Canwel Hardware (national)
• IRLY Distributors (Western Canada)
• BMR (Ontario, Quebec, Atlantic Canada)

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KEY NATIONAL BUYING GROUPS with MARKETING PROGRAM
NO DISTRIBUTION
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Buying Group Only No marketing or distribution

• Independent lumber dealers Co-operative -ILDC
  (national buying with regional dealer network eg.
  Kent Building Supplies)
• Sexton Group (national)
• Plus other smaller regional specializing in
  drywall, roofing, new home construction etc.
  (TORBSA, ALPA lumber)

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Distributors No franchise or marketing
affiliations

• Building Supplies, Dimensional Lumber, Decking
  etc.
• AFA Forest Products Inc. (national)
• Broadleaf Logistics Company (national)
• Beland Forest Products (Eastern Canada)
• CanWel Building Materials Ltd. (national)
• Direct Forest Products (Eastern Canada)
• Goodfellow Inc. (national)
• Gordonply Industrial Materials Ltd. (Eastern
  Canada)
• OWL Distribution Inc. (Eastern Canada)
• Guardian Building Products Distribution
  (national)
• National Forest Products (national)
• Nicholson and Cates Ltd. (Ontario)
• Taiga Building Products (national)

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Distributors No franchise or marketing
affiliations

• Specialty Distributors (Mouldings and Trim)
• Alexandria Moulding (national)
• Moulding and Millwork Ltd. (national)
• Roland Boulanger Co. Ltd.
• Royal Woodworking Co. Ltd. (Ontario)
• Specialty Distributors (Pressure Treated Lumber)
• RAM Forest Products (national)
• Trent Timber Treating (national)
• Timber Specialties Co. (Ontario)

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Cooperative vs.. private/public

• Cooperative is dealer/member owned
• Distribution and Head Office non-profit
• Example Home Hardware, Castle Building Centres,
  Tim-Brmarts, Federated Cooperative)
• Stores independently owned except for the
  Federated Cooperative group

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Cooperative vs.. Private/Public

• Private / Public
• For profit Distribution and Head Office
• Economies of scale dictate competitive purchasing
  power
• RONA, Canadian Tire,

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Canadian Trade Shows Home Improvement Industry

• Private Shows Home Hardware, RONA, CTC, TruServ
  Canada, Federated Co-operative, BMR, etc.
• Regional Shows Atlantic Canada, Ontario, Western
  Canada, British Columbia
• Numerous other shows (Construct Canada)

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Trade Show Summary

• Private trade shows focused on their customers
  and prospects only
• Regional shows open to all retailers in home
  improvement and/or hardware industry, Franchise
  dealers can see products/services not exhibited
  at their private shows.
• National show has not had great success due to
  cost in time and money of retailers attending
  both private national show

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Ontario/Canadian Economic Forecast

• Retail Sales government stimulus programs
  helping to create sales for most Home Improvement
  Retailers
• Bank of Canada predicting a retraction of -2.3
  for 2008 but GDP growth of 3 for 2010
• Ontario will not meet the national projection for
  growth due to a strong dollar and volatile
  manufacturing sector
• Eastern Canada boyant and not experiencing the
  same degree of negative market growth as Ontario
• Western Canada affected by oil/gas swings,
  economy still strong
• New home construction slowed but there are
  pockets of strength througout the country (GTA)
• Home renovations will remain strong component and
  Home Renovation industry should exceed national
  averages in all areas of the country

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SUMMARY

• Ontario and Canadian market is buoyant and future
  GDP growth is projected to be stronger than
  within other industrialized countries.
• Resources and manufacturing will drive the
  economy
• Manufacturing adapting to the strong Canadian
  dollar
• Home Improvement Industry significant employer
  will be a leading sector in market recovery
• THANK YOU