How to Con­quer the World

In our one-stop guide to for­eign trade, B.C. small busi­nesses share the se­crets of their in­ter­na­tional suc­cess

BC Business Magazine - - Front Page -

When Ken and Vaughn An­der­son founded At­las Man­u­fac­tur­ing Ltd. in the late 1990s, they knew the Cana­dian mar­ket for their wa­ter-well drilling equip­ment wasn't big enough. So their small Van­cou­ver Is­land com­pany looked to the U.S., where a boom in sin­gle-fam­ily home con­struc­tion was cre­at­ing huge de­mand for their cas­ing ham­mers, used to drill wells on in­di­vid­ual prop­er­ties. That busi­ness dried up in the 2008-09 fi­nan­cial melt­down, but the An­der­sons de­signed new prod­ucts for other in­dus­tries, in­clud­ing oil and gas, and built a global cus­tomer base. (See page 30 for de­tails.)

When it comes to trade with other na­tions, At­las and its peers play an out­sized role. B.C.'S small and medium-sized en­ter­prises gen­er­ated al­most $12.9 bil­lion worth of ex­ports in 2014, ac­cord­ing to Sta­tis­tics Canada and BC Stats, ac­count­ing for 36 per cent of the pro­vin­cial to­tal.

Not bad, says Dan Bax­ter, di­rec­tor of pol­icy de­vel­op­ment, govern­ment and stake­holder re­la­tions at the BC Cham­ber of Com­merce, but there's room for im­prove­ment. “It's an amaz­ing num­ber—over a third of our ex­ports are com­ing from SMES,” Bax­ter notes. “But it also goes to show that those larger com­pa­nies are do­ing 64 per cent. So that's where there's still so much op­por­tu­nity to get more of those B.C. ex­porters not just into the ex­port game but to in­crease the value of their prod­uct and do more trade.”

But as un­cer­tainty swirls around the rene­go­ti­a­tion of the North American Free Trade Agree­ment (NAFTA), many of those firms must be ner­vous. Although B.C. is less reliant on Amer­ica as a trad­ing part­ner than other prov­inces, 54 per cent of our ex­ports go to U.S. mar­kets. The new Canada–euro­pean Union Com­pre­hen­sive Economic and Trade Agree­ment (CETA) will prob­a­bly change the pic­ture. Cur­rently, main­land China, Ja­pan and South Korea fol­low the U.S. as the top des­ti­na­tions for the prov­ince's goods and ser­vices. Watch for the U.K. (No. 11) and other Euro­pean na­tions to grow in sig­nif­i­cance.

Here, we check in with four small B.C. com­pa­nies that are thriv­ing ev­ery­where from Aus­tralia to Cal­i­for­nia to Saudi Ara­bia—and with ex­perts who share their tips for con­quer­ing in­ter­na­tional mar­kets.

Just off the Is­land High­way be­tween Courte­nay and Campbell River, sur­rounded by fields of graz­ing horses and cat­tle, is the home of At­las Man­u­fac­tur­ing. The long, low build­ing where the com­pany makes its spe­cial­ized drilling equip­ment looks like a hob­by­ist's ma­chine shop.

“The rea­son we don't put a sign out,” says co-owner and op­er­a­tions man­ager David Free­man, “is that we don't want peo­ple stop­ping in and say­ing, `Hey, can you weld up my boat trailer?' That's not what we do.”

What nine-per­son At­las does is de­sign and build in­no­va­tive prod­ucts that ship world­wide. Many of its patented de­signs stem from a spe­cific kind of in­quiry—some­one con­tacts them for a piece of equip­ment that doesn't yet ex­ist.

The Merville-based busi­ness was born—and now thrives—through in­ven­tion. As a teenager, co-owner and pres­i­dent Ken An­der­son worked on drilling rigs for a wa­ter-well com­pany owned by his fa­ther, Vaughn. Af­ter a cou­ple of decades driv­ing pipe into the ground, An­der­son started de­sign­ing a new kind of cas­ing ham­mer. “I think I was lazy, so I was try­ing to make the job eas­ier,” he re­calls.

His first cas­ing ham­mer, a hy­draulic ma­chine de­signed for a cable tool drill, boosted his pro­duc­tion by 100 per cent and used far less fuel than other mod­els, An­der­son says. There were al­ready cas­ing ham­mers for ro­tary drills, but they ran on air pres­sure, which is ex­pen­sive to gen­er­ate, and froze in cold cli­mates. Af­ter start­ing by sell­ing to other wa­ter well drilling com­pa­nies, An­der­son pro­moted his de­vice at a ground­wa­ter in­dus­try trade show in Las Ve­gas. Sales took off.

The An­der­sons sold their wa­ter-well drilling busi­ness so they could fo­cus on the cas­ing ham­mer, found­ing At­las Man­u­fac­tur­ing in 1989. They soon ac­quired a patent on the mech­a­nism that runs the ham­mer. From the be­gin­ning, well drilling for sin­gle-fam­ily homes drove their busi­ness. The com­pany now makes seven mod­els, rang­ing in price from US$20,000 to US$65,000; the largest weighs about 3,200 kilo­grams.

When the 2008-09 fi­nan­cial cri­sis and the ac­com­pa­ny­ing U.S. housing crash killed the de­mand for cas­ing ham­mers, An­der­son turned to an­other tool: the cas­ing jack, which pulls pipe out of the ground. It was used to drill wa­ter wells, but more de­mand came from the oil and gas in­dus­try, for one-off de­signs. “We didn't in­vent the cas­ing jack, but we de­vel­oped a cus­tom mar­ket,” An­der­son says. “You tell us what you want, and we'll build it.”

It proved an ex­pe­di­ent model—they in­tro­duced the cas­ing jack at trade shows, and the com­mis­sions came

in. Cus­tomers now in­clude Hous­ton-based Oc­ci­den­tal Pe­tro­leum Corp., Sin­ga­pore's EMAS Off­shore Ltd. and San­tos Ltd. of Aus­tralia.

Free­man, a former Air Canada pi­lot who joined Ken as a part­ner a few months af­ter Vaughn died in 2013, es­ti­mates that the com­pany ex­ports 95 per cent of its prod­ucts; half of that share goes to U.S. cus­tomers. He ad­mits to some anx­i­ety about the NAFTA rene­go­ti­a­tions and Pres­i­dent Donald Trump's rhetoric about buy­ing American, given that pur­chas­ing ma­te­ri­als and com­po­nents such as steel and chain from the U.S. and sell­ing At­las prod­ucts there has al­ways been fairly easy.

“Our cus­tomers are largely Trump sup­port­ers,” Free­man says. “They wear Made in Amer­ica hats. But we have a good rap­port with them. They can al­ways pick up the phone and call me; it's not like phon­ing a big com­pany. So I think the ser­vice we pro­vide out­weighs the Made in Amer­ica thing.”

At­las ma­chines are def­i­nitely made in Canada— Free­man re­cently counted 130 sup­pli­ers on Van­cou­ver Is­land. But the com­pany, a Co­mox Val­ley Cham­ber of Com­merce mem­ber, em­ploys Amer­i­cans, too. With about 500 cas­ing ham­mers in use state­side, it has dis­tri­bu­tion cen­tres in Mil­wau­kee and Spokane, Wash­ing­ton, plus a third in Perth, Aus­tralia, to han­dle sales of com­po­nent parts.

At­las will also sig­nif­i­cantly ex­pand its U.S. sales with the re­cent ac­qui­si­tion of its main rival, Weld­coBeales Cas­ing Ham­mer, a divi­sion of Ed­mon­ton-based Weldco Cos. Pre­vi­ously man­u­fac­tured in Seat­tle, Weldco-beales prod­ucts will now be made in Merville. Other promis­ing projects in new in­dus­tries in­clude the Mole Rat, which An­der­son and his en­gi­neers de­vel­oped af­ter a Vic­to­ria en­vi­ron­men­tal re­me­di­a­tion com­pany re­quested a soil-sam­ple drill that could fit through an eight-foot door­way.

Now in his fifth decade of drilling, the self-taught An­der­son en­joys the cre­ative chal­lenge of th­ese ef­forts. “When some­body comes to us with a job, we take a good look at it and see if we can see some­thing there,” he says. “It's a lot more fun than just build­ing the wid­get.”

LI­CENSED TO DRILL Ken An­der­son with David Free­man, coowner and man­ager of op­er­a­tions at At­las Man­u­fac­tur­ing

GLOBAL PLAYER Raj Bhangu took BC Cham­ber of Com­merce mem­ber Airg's mo­bile games to the Mid­dle East

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