by Tim Wilson
Insights into how to succeed in export markets
With the US economy climbing to its feet, Canadian manufacturers are facing a more robust export market. However, this has been complicated by the role that China and Mexico now play when supplying our giant to the south. Now more than ever, it is crucial that Canadian manufacturers look to emerging markets for export opportunities. Fortunately, there is help at hand.
“If you are an exporter selling to a new buyer, we will guarantee 90 per cent of the value of the deal,” says Phil Taylor, a spokesperson with Export Development Canada (EDC), Canada’s export credit agency. “This can be a big help if you are selling into a new market, or to a new buyer without an established relationship.”
The ability to remove most of the risk from an export deal, particularly when exploring an emerging market, is a big assist to those manufacturers without the internal resources to take a chance on an unknown entity. This is where inexpensive, powerful tools can also help, such as EDC’s Export Check.
“Export Check is designed to help Canadian companies determine whether or not their customer is credit worthy, and what their payments are like,” says Taylor. “A lot of companies use it.”
Taylor says that the EDC’s intention is for Export Check–which costs $30 per credit check–to be as easy to use as possible, with mobile access in the works. The EDC gets its data from a network of foreign banks and agencies, leveraging years of relationships. Other organizations, notably Canadian Manufacturers & Exporters (CME), also have initiatives to help Canadian manufacturers looking for export markets.
“In a couple of months we will be launching our website for the Enterprise Canada Network, or ECN,” says Philip Turi, general counsel & director, Global Business Services, at Canadian Manufacturers & Exporters (CME). “We have been working on this for the past two years; it is in partnership with the Enterprise Europe Network, or EEN.”
The ECN connects to over 600 partner organizations in 54 countries. A ‘network of networks’, ECN offers its suite of services that connect Canadians to global business opportunities, as well as research collaboration and innovation.
“It supports all constituents, including small and mid-size businesses,” says Turi. “The ECN works off a database with about 17,000 companies representing 35,000 opportunities. Europe plays a major role, but Russia is a part of the network, as are the USA, China, and Brazil.”
Turi says getting Canadian manufacturers to look beyond the US is still a challenge, but Canada’s changing demographics represent a big opportunity. This is particularly true with smaller companies.
“The focus on the US has not changed as much as it should, but immigration patterns have shifted and many companies have now been started by Canadians who arrived here in the past decade,” says Rick Cleveland, director of education and accreditation, Supply Chain Management Association. “These people are looking beyond the US to their countries of origin–it’s part of a larger recognition that there is a world beyond traditional markets.”
SCMA itself is a relatively new organization formed in 2013 through the amalgamation of the Purchasing Management Association of Canada and the Supply Chain and Logistics Association of Canada. SCMA embraces all aspects of strategic supply chain management; it is part of a global trend toward an increase in trade-friendly initiatives, polices, and organizations. This means there are plenty of resources for Canadian manufacturers.
“It is easier to find potential partners,” says Cleveland. “The commercial banks and provincial governments have programs in place to help companies. There is also the Canadian International Freight Forwarders Association, and the CSMA itself is connected to supply chain professionals around the world.”
This kind of help is particularly valuable to smaller manufacturers in need of advice on import and export requirements, as well the ins and outs of financial instruments such as letters of credit. Exporters of all sizes are benefitting from a revolution in intermodal technology: shipping, rail, and trucking are now linked as never before, making it more efficient and a lot cheaper to move manufactured goods to far away markets. There is also more support on the political front.
“With the ECN we will hopefully see leads coming in from trade commissioners,” says Turi. “Initially it will just be European leads, but over time we hope to see more, with the ECN becoming a central hub for global exports.” SMT
Tim Wilson is a contributing editor.[email protected]