Groupe Canam thrives in U.S. market
Quebec’s share of the U.S. export market has been declining over the last decade but don’t tell that to Marc Dutil, chief executive of steel fabricator Groupe Canam in St-Georges de Beauce.
The U.S. now represents 65 per cent of the company’s sales, Dutil said at a session of the International Economic Forum of the Americas conference in Montreal.
And if there’s a perception that it’s getting harder for foreign companies to win business there, consider Canam’s long list of achievements.
There’s nothing more iconic in America than Yankee Stadium in New York City. When a new version of the stadium was built seven years ago, Canam supplied $40 million worth of structural steel.
“New York City is a good example. There’s a perception that it’s a world of its own, that deals are done under the table or in a backroom,” Dutil said in an interview.
“For us, it was very businesslike. What’s the cost? What’s the reputation? What’s the delivery date?”
The fact that Canam was well established south of the border with a U.S. corporate address (Canam Steel Corp. in Maryland) made it a credible partner for the Yankees organization, he said.
“At the end of the day, we were able to bring resources that made the most economic sense to them.”
Statistics presented at the conference showed that Quebec’s exports to the U.S. last year were $53 billion, down from $57 billion in 2002, while its trade surplus with the U.S. was $17 billion, down from $31 billion twelve years ago.
While some of the decline can be attributed to a strengthening of the Canadian dollar over that period, panellists were quick to discount the impact of currency movements.
“The exchange rate is like the weather,” said Dutil. “You have to live with it. If you think that the weather is going to be good every day for the next 50 years, you are fooling yourself.
“We have plants on both sides of the border and that helps us mitigate the impact of exchange rates moves.”
Jean-Claude Lauzon, Quebec’s delegate-general to New York, said a more important factor is that U.S. industry is investing far more in productivity growth than Quebec firms, making it tougher for Quebec companies to compete.
For the Dutil family, which has been in business for decades in the Beauce, selling in the nearby U.S. is second nature. “It’s a 15-minute drive for us,” Dutil said. “It was never mysterious.”
Yankee Stadium is one of many sports facilities on which Canam has worked in the U.S., including Citi Field, home of the New York Mets, the Meadowlands, where the NFL’s New York Jets and New York Giants play, and Arthur Ashe tennis stadium in Queens. Facilities in Atlanta, Miami and Foxborough, Mass., near Boston are also on its resumé.
But for some, the business culture in the U.S. is different and does prove a challenge, said Alain Brunelle, president of Demers Ambulances of Beloeil.
Demers, which manufacturers ambulances on chassis provided by automakers like GM, Ford and Mercedes-Benz, derives about a quarter of its $80 million in annual sales from the U.S. But it was hard going at first.
The company founded in 1960 made its first foreign sales a decade later in Latin America and then followed up with contracts in Iran. Not until the 1980s did it clinch its first deal in Ontario after conquering a language barrier that had left management uncomfortable speaking English.
After winning a significant amount of market share on this side of the border, the ambulance maker finally turned to the U.S. in 2008. But it soon found that what was accepted ambulance technology in Canada wasn’t what the typical U.S. buyer wanted.
“We had to redesign the product,” Brunelle said. Even the look and feel of the vehicle had to be changed to suit U.S. tastes.
The market was different in other ways. While a typical order in Ontario might be for 25 ambulances, in the U.S. it is only three on average and there are a lot more players of a smaller scale.
Demers opened a small plant across the border in Plattsburgh in order to establish a U.S. presence and hasn’t looked back.