Manufacturing

  • Tessa Bousfield posted an article
    “Our companies are much better prepared for these swings and much more savvy in the strategies to.." see more

    Source: Times Colonist
    Author: Andrew Duffy

    Not all B.C. manufacturers taking advantage of low loonie, but some are making hay

    The Canadian dollar’s relative weakness to the U.S. greenback should have B.C. manufacturers in a stronger position than they currently are, according to the chairman of the B.C. Alliance for Manufacturing.

    Marcus Ewert-Johns said that while the manufacturing sector in B.C. is doing fairly well, it would be doing much better had it taken advantage of opportunities to trim costs, invest in operations and improve productivity when it had the chance.

    “The last time the Canadian dollar went low [the high 60-cent range to low 70-cent range], companies should have made capital investments — and most didn’t,” Ewert-Johns said.

    If they had improved their productivity, such companies would have been able to take advantage of the current climate, where the loonie is trading at below 80 cents US, he said.

    “Manufacturing in B.C. could be doing so much better if productivity was strengthened and a larger skilled labour force was available.”

    Currently, the Canadian dollar is trading at a price near 78.50 cents US. While the loonie has been rising against the greenback, this still puts B.C. manufacturers in an advantageous position.

    “If B.C’s guys are doing what they should be doing, when the Canadian dollar goes down, they do well,” Ewert-Johns said. “Most manufacturers are in a niche space, where they are doing something unique, and that means they have a global market as an opportunity so they are exporting.

    “If they are doing sales in U.S. dollars and their costs are Canadian, then it’s an advantage for them.”

    Victoria’s Sherwood Industries has been taking advantage of that opportunity for 28 years.

    The company, which manufactures pellet, wood and gas stoves and fireplaces, employs about 200 people at its 100,000-square-foot facility in the Keating industrial area in Saanichton.

    Sherwood is reporting a 23 per cent increase in sales, and has improved its bottom line as the vast majority of its sales are international and in American dollars. Fifty-eight per cent of all sales are in the U.S.

    Sherwood president Cherbel Yousief said the company has invested more than $4 million in recent years to improve its equipment and productivity.

    “We invested heavily and in the [economic] downturn. We slammed on the brakes and did some changes to the business model,” he said, noting those moves translated into a leaner company with more capital to invest. “We have never lagged behind other manufacturers. We invested heavily in automation. … We have always been on the cutting edge of productivity.”

    The result has been a company able to react quickly to changes in the marketplace, vice-president Stuart O’Connor said.

    “We have expanded our business and now we’re more efficient,” he said.

    O’Connor said they have focused heavily on expanding their gas business, which showed the greatest growth potential, and spent research-and-development money on new models to grab more of that market share.

    O’Connor said the company’s new production equipment also enables it to work on smaller batches — 18-20 units instead of hundreds at a time. That turns product out faster, cuts down on dead inventory and frees up cash.

    “Business models change and companies don’t want to have inventory lying around,” Yousief said.

    Victoria’s tech sector is also making short-term hay out of the relatively weak loonie.

    Scott Phillips, founder of Starfish Medical, which designs and develops medical devices for the global market, said its profitability is buoyed by the weak dollar.

    “But in the long term, if more talent drains to the U.S., it’s bad for the tech industry overall,” Phillips said. “So we wouldn’t welcome further weakening.”

    Phillips said the volatility of the Canadian dollar has made planning difficult.

    “For purposes of planning and investment, we are assuming an 80-cent dollar. But we have to build scenarios for other rates into our planning,” he said.

    Dan Gunn, chief executive of the Victoria Innovation, Advanced Technology and Entrepreneurship Council, said dealing with currency fluctuations is just part of being a Canadian company.

    “Our local tech sector is heavily export-focused, so they have had to learn how to manage their operations to mitigate and leverage currency swings as much as possible,” he said. “Sometimes it provides an advantage and sometimes it is a hindrance, depending on your company’s particular markets and business segments.

    “One thing is for sure,” Gunn said. “Our companies are much better prepared for these swings and much more savvy in the strategies to deal with them than they were a few decades ago.”

  • Tessa Bousfield posted an article
    Over the course of a whirlwind 10 days through 4 cities, Love's plan turned into a new direction... see more

    Source: Times Colonist
    Author: Andrew Duffy

    China trade trip illuminating for Victoria technology firm

    Justin Love had a plan in mind when he decided to join the City of Victoria’s recent trade mission to China and Japan, but over the course of a whirlwind 10 days through four cities, that plan turned into a new direction for his business.

    Love is the president of Limbic Media, which combines technology with art to create interactive installations such as its flagship product, Aurora.

    Aurora, the company says, “creates light shows that are controlled by sounds from the surrounding environment.”

    Love is now considering positioning the firm to take on the challenge of the Chinese market. “We intended to [deal with] manufacturing on the trip and now I’m pivoting to doing business development in China,” said Love,.

    He noted that whatever notion he had of the visit to China before he arrived went out the window when he was actually there. “The opportunity and scale of projects there is incredible. I could see us doubling our business in the next couple of years.”

    Love, who already had a manufacturing relationship with a Chinese firm before the trip, had intended to focus on that when he arrived, but he said he was open to all possibilities.

    “I went without any preconceptions,” he said, though he admits he was taken aback at the pace of business. First meetings quickly gathered steam and instead of being meet-and-greet sessions they turned into concrete plans.

    “We will be working on a project with one of the companies next month; things really happened quickly,” Love said, laying much of the credit at the feet of the City of Victoria and the B.C. trade office. “Something that might have taken a year or two happened in a week.”

    That’s the general idea, said Lisa Helps, who was leading her second trip to China as Victoria mayor.

    Helps said she enjoyed watching several Victoria tech firms showcase their products to an eager Chinese market and expects there could be a number of deals signed as a result of the trip.

    Helps said her presence and support from the city may have helped move things along. “I think it allowed more business to be done.

    “My take is this was overwhelmingly positive. It really exceeded expectations,” she said. Over the course of 10 days, they managed to take meetings in order to increase the export of local innovation in clean tech, manufacturing, education, film and tourism.

    Helps said the mission also allowed the South Island Prosperity Project to enter into discussions with a municipal group in Shanghai that could offer lessons and guidance to Victoria in establishing itself as a “smart city.” The smart city concept seeks to use data and technology to improve living conditions.

    Helps acknowledges that people are often skeptical of trade missions, but she said with the region pushing to develop more exporting companies that can target China, these kinds of trips pay off handsomely.

    However, at one point she sang a different tune.

    As a city councillor, she complained in 2012 that then-mayor Dean Fortin was leading a mission to China, and asked if Victoria taxpayers were on the hook for it and why the city wasn’t dealing with its own problems first.

    Helps denies she has changed her tune. “I wasn’t saying no trade missions, I was just saying you have to have your own house in order before you go trotting around the globe,” she said.