Q&A: From lowest paid employee to president

Steve Youngblut’s career has been a decades-long rise to the top. The President of CGC Inc. has spent a quarter-century at the company—a journey that began not in a boardroom, but in what he describes as a “dark corner” of the customer service department as one of the organization’s lowest-paid employees.

Today, Youngblut is helping steer one of Canada’s most vital building material manufacturers through a period of historic transformation. With over $500 million in recent investments—including the massive new Wheatland wallboard facility in Alberta and the revitalization of the Little Narrows rock quarry in Nova Scotia—CGC is making a big bet on the future of Canadian construction.

The timing couldn’t be more critical. As the federal government sets lofty targets of 480,000 housing starts, the industry is struggling to keep up.

SiteNews:You’ve been with CGC for I think 25 years which I thought was pretty remarkable. What’s kept you at the company for such a long time? 

Steve Youngblut: It’s the only company I’ve really worked for since I was outside of school. I think that’s rare. It’s a lot about the people and the culture of the business. We often say it’s a very big business in Canada, but it really feels like it’s a large family business. There’s a culture that’s dedicated to safety, and it really puts people first, a culture that’s dedicated to innovation and investment too. So it’s been a pretty exciting ride to watch ourselves, our customers and the industry evolve over the 25-year period. You’ve probably seen some of the press lately. In the last five years we’ve invested close to $500 million between three large projects, one being our Wheatland Wallboard facility that’s almost complete, just outside of Calgary, Alberta. We are reopening a rock quarry, Little Narrows, in the Cape Breton, Nova Scotia area and then last year, we made the first acquisition in 20 years for CGC, Imperial Building Products with its steel stud and drywall trim business. 

During your time with the company, you’ve gone from customer service all the way up to president. What kind of strategies or habits or things do you think have contributed to this rise?

I often get a chance to do an event every year with new employees. I always talk about having this sort of fairytale story. I started, I think, at what was the lowest paid person in the entire organization in customer service. I was sitting in the back in this dark corner, which I can point out to you from my office today. And then about four years ago, I had the opportunity to lead this great organization. I think starting in customer service really gave me the initial insight to our customers in the industry. Our business is really centred around the customer. We put the customer first in everything that we do. Secondly, internally, I was able to surround myself with great leaders and great people, which I think speaks to our organization. And again, seeing this growth that’s come into our organization, both from USG and then Knauf in 2019 when they purchased USG, has been this ongoing growth and opportunity to take on new opportunities and different roles in different areas of our business. But again, I think it’s that sort of attitude of continuing to grow these relationships, finding a close circle that you can learn to grow with, saying ‘yes’ in your career, trying different things, and having new experiences.

But I think the most part too, I took it upon myself to really ingrain myself in our industry, meaning again, mostly our customers, but not only that, as a person who grew up in sales, also it’s really important as a manufacturing company to ingrain yourself in that manufacturing process and learn the bones and the roots of your business. 

But it’s a pretty exciting industry as well. You meet a lot of great people. I’ve been lucky to have lots of mentors along my way to both internal and external that have really helped me along that journey. 

You already touched on this a bit, but obviously there was the big acquisition last year and you’re working on some new facilities. Tell me a bit about some of the growth strategies that CGC is employing right now and the thinking behind them.

It’s about putting the customer first. We always hear from our customers for what’s next. We do surveys and chat with them, they really want that one stop solution. And I think a great example is our largest customer, Home Depot. They want the ability to call us and be able to get drywall, ceilings, steel studs, on and on and on. Internally, as we look at these businesses, as we were searching what’s next for us, and how do we want to grow, we wanted something that was close to our core business. So close to core was key.

The second thing was there had to be synergies between us and our customers. So that continues to be our mindset as we look at these things and we look into the future. As far as expansion goes, I think it’s two things. We want to continue to find efficiencies in our plants so we can create more product. And generally when you’re doing that, you’re creating value internally and being able to lower your costs. We know that we need that drastically in our industry. We also know that there’s a massive capacity gap now.

And if you look at some of the goals of the federal government and where we want to see housing starts going in the future, there’s a large gap there. That’s really part of the thinking behind Wheatlands. That’s part of the thinking behind Little Narrows. And certainly with this new steel business that we’ve entered, we want to continue to grow that. In our specific industry, too, it’s about having long-term sustainable raw materials. So that’s really linked into that Little Narrows piece. We also announced a new investment in a paper mill as well. Rock and paper are pretty important in the drywall business.

Tell me a bit about some of these lofty goals the government has for housing and infrastructure and what some of the challenges there are to meet that.

If you look at the statistics right now, we’ve seen higher housing starts in the newspaper, numbers like 285,000. The reality is, when it comes to actual completions, we’re really pushing the envelope on that with around 220,000 to 230,000 housing completions. There’s always competing priorities. You have your commercial projects, your hospitals, your school, other government infrastructure, and then your repair and remodel stuff. There are competing priorities for the drywall supply. So in order to get to 480,000 starts, you would literally need to double the capacity in Canada because we, as an industry, are completely sold out at that 230,000. 

One of the things that we’re trying to do to address that, the biggest move, which has been a 30-year dream here for our CEO and certainly something I’ve looked at my entire career, is building a wallboard plant in Western Canada. The plant that we’re building in Wheatland will have a capacity upwards of 400 million square feet. So if you think about it in terms of a home, that would create about 55,000 new homes in Western Canada, with  that wall board capacity. So it is a big challenge. I think the other huge challenge that we see in our market that’s very important to us, even more important to our end users, the contractors, is the trades. There’s a severe lack of trades right now. There’s a lack of funding investment in that sector. And the people that we do see in those roles right now, I would call it an aging workforce.

Back to this investment of $51 billion from Mark Carney, he very clearly called out that there was going to be a significant investment in the trades. It’ll be a great time to work in the trades and these are great jobs. Outside of that, one of the things that we’re really focusing on as we develop and create new products is making them faster and easier to install. We are improving our supply chain models so that we’re building facilities close to our customers, like the Wheatland facility. And for products in general, the big focus would be lightweight. We just recently launched a new project called Ultralight Pro, which is the lightest and strongest drywall that’s ever hit the market. 

You said you’ve had this long dream to build a plant in Western Canada. Once that’s achieved, what is that going to mean for the builders and the industry? How will that impact them and their projects?

It’s been very challenging for us to service the Western Canada market. There was a significant change in our industry, 2015-2016 timeframe when there was an anti-dumping case that was filed against all the manufacturers in Canada. The end result of that was that there were tariffs on bringing wallboard or drywall from the U.S. into Canada, so it drastically reduced the supply.

On our side of the equation, that had us increasing shipments from Eastern Canada to Western Canada to the tune of about 2,700 rail cars on an annual basis. Rail is a pretty difficult business as well. Sometimes there’s delays in getting the rail cars, there’s competing priorities. And with the types of rail cars we use, when the lumber business is hot, it’d be tough to get rail cars.

In the winter the switches freeze and it’s tough to get the rail cars off the rail line. So it has been a significant challenge from a distribution standpoint. So we’ll be much more reliable, much more sustainable than sending all those rail cars. The Wheatland Wallboard facility that we’re building, this is a state of the art wallboard facility. It’s the newest wallboard facility in North America. We’re anticipating that we will have the best product in the market.

It’ll be close to the market for customers who pick up from us or that are receiving deliveries. We’ll be much more reliable to them. We’ll be able to get products to the job site in a much more timely manner. And we are going to be able to increase the capacity across the Canadian network and help a little bit to get towards this lofty goals that the the federal government has for increasing home capacity.

You’ve been in this industry for so long and you’ve seen so much. What is some of the wisdom that you’ve collected in those 25 years? What do you see on the horizon for the building product sector?

I think there’s a fundamental shift towards sustainability for sure as we mentioned. And I think there’s a fundamental shift towards really creating higher performance products that cater to this workforce. Everything we’re seeing right now, there’s a lot of talk about modular systems and modular homes. So that’s a great example. Some of the largest general contractors are building all of their washrooms for a hospital in an offsite warehouse. And in a controlled environment where the products, like drywall compound, can dry properly. And when they’re ready, they’re putting these up with cranes and tying in their plumbing and electrical work. So I think there’s a lot of things like that that are at play right now.

The other thing we’re seeing there too, if you look at the drywall sector, like I had mentioned, the lightweight product, you can increase your productivity. The products are much easier to work with. They’re a much faster finish. We have some products that we’re not talking about specifically, but we’re actually trialing this week on finishing the drywall products. So I think there’s going to be big advancement there. It’s almost like an art, but it’s a very long process doing four coats of drywall compound coming back and sanding every time. So we’re trying to move the needle on that too and create efficiencies. I think these are like the key things. If we can help our customers build faster, build quicker, and reduce costs while being a more sustainable manufacturer, those are some of the key takeaways.

If you weren’t working in building materials, what do you think would be another career that you would love ?

When I finished school, I really didn’t know what I was going to do. And actually, I finished half of my apprenticeship to be an auto mechanic. I don’t think that’s what I want to do. Knowing what I know now, I would be doing something in our industry. I really love the building science of things. So I think if I wasn’t doing this or working on the business side of things, I’d probably be leaning toward being in architecture or design. I just love architecture, especially residential.