From Kamloops to Squamish, these small businesses think globally
1. The Veteran: Kryton International Inc., Vancouver
Specialty: Concrete waterproofing products whose proprietary chemical technology creates crystals that grow into the material
Exporting since: 1975
Proportion of total sales from exports: More than 90 per cent
The story so far: Ron Yuers, Kryton’s founder and chair, signed his first international distributors in 1975, in Australia and Mexico. To fulfill his global ambitions, he would buy a one-way plane ticket and not return until he had sold something, says his daughter, president and CEO Kari Yuers. On those trips abroad, one of her father’s first stops was often the Canadian consulate. “At times, he would be a good enough salesman to not get out the door without asking to borrow their car,” Yuers says, “so he could show up in a beautiful sedan with little Canadian flags on the front and look pretty important.”
That resourcefulness paid off: Kryton now sells its products in more than 45 countries. The company, which has 90 staff, has offices everywhere from India and China to Dubai and the U.K.
Top export challenge: “One of the biggest challenges has been protectionism and tariffs,” Kari Yuers says. “There’s 40 per cent duties in many countries, so when our products are brought in, our customers have to pay as much as 40 per cent tax before
they can mark it up and sell it in their local jurisdiction.”
What’s next: In the middle of the last decade, Kari Yuers pared Kryton’s 150-product line back to 12 core offerings. That boosted growth, but now that the company is expanding by 20 per cent year-over-year, it wants to introduce new products again. To that end, Kryton has hired a mergers-and-acquisitions expert to find takeover prospects, Yuers says. “We’re looking to add some value-added systems that can
help propel the company and our customers’ growth on a global basis.”
Yuers thinks the pending Comprehensive Economic and Trade Agreement (CETA) with the European Union will make Kryton more competitive. “We welcome deals like the Canada-EU trade deal,” she says, noting that the EU is a mature market with an appetite for high-quality materials.
2. The opportunist: Tri-Star Seafood Supply Ltd., Richmond
Specialty: Live, fresh and frozen crab, cod, prawns and other seafood, nearly all of it Ocean Wise–certified
Exporting since: 1981
Proportion of total sales from exports: About 75 per cent
The story so far: Founder Claude Tchao started out by tapping what was then a niche market, storing live seafood in his daughters’ wading pool and distributing it to local restaurants in a rented truck. Tchao built a processing plant, and Tri-Star soon went nationwide and began shipping to the U.S.
The Hong Kong native then turned to Southeast Asia. “He saw an opportunity that people over there loved eating freshest-of-the-fresh seafood,” says business development manager Evelyn Tchao, his daughter. “He basically exported his first shipment, and that was it—we just continued.”
Today, Tri-Star’s markets include Europe as well as China, Malaysia and Vietnam. The 30-employee company is known throughout Southeast Asia for its packaging, which keeps mortality rates low, Tchao explains. “We pay a lot of attention to live seafood and how to make sure, at the end of the day, when we put it onto somebody else’s table across the sea, that it’s live.”
Top export challenge: “Sometimes the laws are different, so we have to make sure that each product can go into that country, and they all have different tariffs and whatnot,” Tchao says. “Even though it’s legal here doesn’t mean it’s necessarily OK
What’s next: CETA will create more opportunities for Tri-Star, Tchao believes: “We see a rise in consumption across the board.”
3. The world traveller: Chromag Bikes, Whistler
Specialty: High-end mountain bikes and bike parts, plus clothing and other soft goods
Exporting since: 2006
Proportion of total sales from exports: Roughly two-thirds
The story so far: Chromag kicked off its export business in Japan, thanks to a cycling industry connection that was both personal and professional, says founder Ian Ritz, whose title is big boss. “Beyond that, the other markets we reached were purely through people discovering our brand and finding that there was a demand for our products, and they sought us out,” Ritz explains. Chromag—about two-thirds of its products are made in Taiwan—now exports worldwide. Besides Japan and several other Asian countries, destinations include the U.S., Europe, South America and Australia.
Top export challenge: “Probably the biggest challenges simply relate to the cost of getting the products there,” Ritz says, “understanding the logistics process and building our business so we have a level of traffic that we can negotiate rates and ship the size of cargo to reach scale of economics to make it feasible.”
What’s next: Ten-strong Chromag is curious about China, where other cycling players have been moving for some time. “We’ve been a little bit skeptical because we don’t know much about what the participation in the sport is like there,” Ritz says. “But just through our manufacturing contacts in Taiwan, there is some talk about there being a good potential market.”
4. The quick study: Riversong Guitars, Kamloops
Specialty: Acoustic guitars crafted in Kamloops, mostly from B.C. and other Pacific Northwest wood. The instruments feature a patent-pending adjustable neck
Exporting since: 2014
Proportion of total sales from exports: 80 per cent
The story so far: In 2012, founder Mike Miltimore was nominated for Canada’s Young Entrepreneur of the Year through Business Development Bank of Canada. The resulting publicity caught the attention of distributors in the U.S. and Malaysia. Miltimore suggested that they meet at the NAMM Show, an annual music products trade event in Anaheim, California. “So I built eight guitars, went down there in January 2013, met with the guys and negotiated a deal to start selling into the U.S,” he recalls. Distribution is relatively simple because Riversong ships to a single location in Nashville, Miltimore notes.
NAMM also helped Riversong, seven of whose 30 employees work in manufacturing, to reach beyond North America. After it struck a licensing deal with Brussels-based European Music Distributors, which had seen its guitars there, EMD went on to distribute them throughout Western Europe. Thanks to the trade show, Miltimore hired veteran guitar export sales manager David Magagna, who introduced him to many companies Magagna had worked with via C.F. Martin & Co. and Taylor Guitars. As a result, Riversong started selling to China and Malaysia.
Top export challenge: “Communication is kind of difficult, and time zone changes,” Miltimore says. “I’ve been scammed a few times with these guys that want us to use their shipping companies and order stuff, and if you don’t take deposits or know who they are, you can have some problems with that.”
What’s next: As of April, Riversong was planning to start exporting to Japan and Argentina, and was in talks with New Zealand. “China’s so huge you can have multiple distributors, so we have another distributor that we’re just shipping to now,” Miltimore says.
5. The hopeful: Gillespie’s Fine Spirits Ltd., Squamish
Specialty: Vodka, gin and flavoured spirits made from B.C. grains and fruit
The story so far: Besides serving drinks at their Squamish lounge, Gillespie’s founders John McLellan and Kelly Ann Woods sell online and supply B.C. restaurants and private liquor stores. At first glance, the U.S. looks like a natural market for a Canadian craft spirits company looking to go international. But as Woods points out, each state has its own set of regulations for liquor imports. “We thought, ‘Well, what’s the point of that if we can reach a much larger market just by going into Asia, for instance?’”
Gillespie’s, whose head count fluctuates between two and seven, wants to stay craft and support local farmers. But growing that way takes time, Woods says. “So our interest in the Asian market is particularly the idea of sending off a pallet on a semiregular basis, and the cash flow that that’ll provide to us is significant.”
China intrigues Gillespie’s partly because its drinkers have surpassed Irish tipplers in annual consumption, according to the World Health Organization. Woods, who has yet to visit the country, hopes to capitalize on its growing middle class and what she calls an interest in Westernization: “They’re looking for things that very much have a Canadian feel and identity.”
Top export challenge: “One part of it has to do with finding a particular buyer over there,” Woods says. “And then there’s a whole bunch of different paperwork and confirmations.” But for Woods, the fact that there’s one set of rules and regulations makes China a better bet than the smaller U.S. market.
What’s next: Woods and McLellan, who attended last August’s Canada China Trade Conference in Vancouver, hope to line up a label designer, mentors and other key partners by the end of the year. Gillespie’s plans to sell select products to Chinese consumers. One idea: barrel-aged maple vodka.