Best Managed Companies

Targray: Canada's Best Managed Companies 2019

Big things can happen when you’re open to a pivot

Canada’s Best Managed Companies

Given the speed of change in today’s economy, every company should learn how to pivot. For a good example of why, consider the journey of Montreal-based Targray, which has transitioned from fuelling the compact disc boom of the 1990s to leading the new era of renewable energy.

Targray was founded by Montreal engineer Tom Richardson, who started a home-based business in 1987 producing pre-recorded CDs from the digital tapes provided by clients. By the mid-1990s, Targray was partnering with giants such as Dow and Philips, and was supplying materials for half of the world’s optical discs.

The future looked bright when Tom’s son Andrew joined the company in 1992. But by 2000, the music landscape was very different indeed. Realizing that digital distribution was set to crush the CD business, Andrew decided to push Targray in a new direction. As it happens, the technology for manufacturing the solar wafers that power photovoltaic cells is similar to that used in making CDs, so Targray leveraged its expertise to expand into solar energy.

Today, long after what Andrew calls “a friendly internal struggle with my father,” he says Targray has become the world’s largest buyer and seller of silicon and one of the biggest suppliers of solar wafers. Andrew became CEO in 2007, the year Targray’s revenues hit $100 million.

Adopting a new mission—to fill gaps in the supply chains of new clean-technology sectors—the company expanded into two new renewable markets. It now produces materials for lithium batteries (which store solar power on the grid or in electric vehicles) and distributes biodiesel, a fuel produced from plant materials and animal waste whose future is promising, thanks to growing regulations limiting the carbon content of motor fuels.

Targray now has annual sales of more than $530 million. It’s been profitable every year but one, and it’s still in serious growth mode. Targray has just expanded its biodiesel operations in Europe, and it’s begun financing the sales of its own products to solar customers. This year, Richardson expects Targray’s revenues to jump by 50%.
Richardson offers three explanations for Targray’s sustained success post-pivot.

First, the company builds on synergy. “We’ve learned to go into new markets and be successful without experience,” says Richardson. Targray entered the solar business based on a $50,000 contract to supply a maker of solar panels. “It was a very small order,” he explains. “But it allowed us to go in and learn all about their processes. Then we met with other manufacturers to see what they needed. That one contract was our Trojan horse.”

Second, cultivating curiosity and learning. To grow, Targray works hard to promote a culture of learning and risk-taking among its 80 employees. “We try to ensure clear messaging around pushing boundaries,” Richardson says. “We want teams to make their own decisions.” One way Targray does this is by bringing 20 key international staff members to Montreal every year for a meeting that is equal parts global planning and team-building. Says Richardson: “It’s easier to put yourself out there when everyone trusts each other.”

Finally, Targray has succeeded by tapping the expertise of others. Richardson formed an advisory board two years ago with the express goal of boosting the company’s ability to learn. Chaired by his father, Tom, the board now includes the former CEO of an $18-billion trading company, a former energy company CEO and an expert in risk management. Richardson is still looking for a corporate-finance adviser to bring perspective to the numbers. The board meets quarterly to discuss best practices, opportunities, threats and, as he says, “things we’re not thinking about.”

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