BC Business
With the construction of a $14.7-million B.C.-Canada House Pavilion underway in Beijing, several of B.C.’s trade associations are assembling their delegations and hoping to expand BC business in China, using the 2008 Beijing Olympics as a convenient springboard. “China is clearly an emerging market for us, and this is a very good opportunity to kick down a few doors and learn more about it,” says Pascal Spothelfer, president and CEO of the B.C. Technology Industry Association (BCTIA).
“China is clearly an emerging market for us, and this is a very good opportunity to kick down a few doors and learn more about it,” says Pascal Spothelfer, president and CEO of the B.C. Technology Industry Association (BCTIA).
The BCTIA hopes to be joined in Beijing by representatives from about 30 companies – 15 representing information and communication technologies and 15 representing clean-energy technology. “We’ve had a fair amount of interest and we’re full up,” says Spothelfer. At present only two per cent of B.C.’s overall technology products are exported to China, he notes, and though it’s not a big market today, it will certainly become one in the future. “The Olympics gives us an opportunity to draw attention to B.C., to allow our companies to present themselves in a different light and to get business contacts they wouldn’t otherwise get,” says Spothelfer. “If we have the spotlight, let’s use it and maximize the return. This is a great marketing opportunity.” Vancouver-based Westport Innovations Inc. (WPT-T), a developer of environmental technologies that allow engines to operate on clean-burning fuels, has had a presence in China since 2001. That’s when it partnered with U.S.-based Cummins Inc. (CMI-N) to create Cummins Westport, a company that manufactures and sells low-emission alternative-fuel engines for commercial transportation. “We have 17,000 engines on the road today, the majority in buses, and our single largest customer has been Beijing Public Transit,” says Jonathan Burke, vice-president of corporate development. In 2006 Westport forged a second partnership, this time with Beijing Tianhai Industry Co., an Asian manufacturer of pressurized cylinders for carrying industrial gases. “We focused on China because it’s become one of the world’s fastest-growing markets for heavy-duty diesel trucks and heavy-duty bus applications,” Burke says. “Its diesel vehicles are one of the largest sources of urban pollution, and, since we offer a low-emissions alternate-fuel technology using natural gas, it seemed like a perfect fit.”
Burke says the 2008 Beijing Olympics has certainly helped fuel Westport’s business in China, though a correlation between the two has never been explicitly mentioned. “We do know that a tremendous amount of pressure was put on the Beijing government regarding air quality concerns and a clean environment, related to both the Olympics and the world’s focus on China.” B.C.’s forestry sector is one industry that has been active in China for many years now. “We did some work there in the 1980s,” says Paul Newman, director of the Canada Wood Group. “We built three demonstration houses and did initial legwork with government authorities and academics.” The military crackdown at Tiananmen Square halted this work, causing a decade-long stall that was only broken in 2000. Today the Canada Wood Group has offices in Shanghai and Beijing with a total of 16 employees on the ground in China. The association’s work is focused on the use of wood in remanufacturing. “A lot of Canada’s wood products are flowing into Chinese factories and facilities that cut it down, reassemble it and use it for products in the country and for exports,” explains Newman. “The focus of a lot of our work is to create construction opportunities for our wood in that market – from outdoor landscaping to wood-frame homes to hybrid construction of wood.”
[pagebreak]
The Beijing Olympics will have a positive overall effect for the forestry industry, says Newman. “But without wanting to sound arrogant,” he adds, “I’d characterize our initiative as being well advanced, compared to other segments that will leverage the B.C.-Canada House Pavilion, because of our lengthy history there. We’re way past the first level of matchmaking and fact-finding. Yes, we’ll use this attractive and functional facility to host our seminars, media events and small trade shows while it’s in operation. But our work will be focused externally, presenting information on why using wood in construction is a good tactic for Chinese businesses.”
Business in China has also grown dramatically for Canfor Corp. (CFP-T), which opened an office in Shanghai in 2007. “We were dealing with China even before it was open to the West – indeed, ever since Canfor has been in business,” says Scott Maxwell, general manager of offshore sales and marketing. “If you go back to the early 1900s, China was one of the biggest destinations for forest products from B.C.,” he explains. “But with the recent surge in the Chinese economy, there has been a huge explosion of growth in forest products going into the country, which has meant a huge opportunity for Canfor and other Canadian forestry companies.
We’ve put a lot of work and effort into building our position there.” At West Fraser Timber Co. Ltd., China represents 20 per cent of the company’s business – a number that could grow to 40 per cent in the next three to five years, says Mike Nomurra, general manager of export sales. “We’ve done business in China for the past 10 years or more,” he says. “Five years ago, as an industry, we considered the country an upcoming market for wood framing, but there’s a long way to go yet in terms of its implementation in China, so that’s our long-term goal. These days our lumber is being used for industrial applications.”
Nomurra says West Fraser Timber may send a representative to the pavilion, but he’s not convinced there’s much gold to be mined from these here Games. “Indirectly we may see some results coming out of the Beijing Olympics. But will the Olympics help us grow or establish our business there? My answer is no.” Some of B.C.’s top mining companies agree that the Beijing Olympics will do little or nothing to grow their business in China. “We’ve been doing business in copper concentrate in China for four years, and it constitutes 40 per cent of our business,” says George Reynard, marketing manager at Quadra Mining Ltd. (QUA-T) “But I don’t see the Olympics changing that.” “It’s not so much the Olympics as the growth of China,” adds Brian Kynoch, president of Imperial Metals Corp. (III-T) “As long as their economy continues to grow, the demand for our products will grow. It’s certainly a part of the world that’s consuming the products we make.”