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