Podcast Transcript - Two partners, one goal: Helping you succeed in business
If you are a Canadian entrepreneur looking to do business abroad, chances are you might need a little help. Whether you need that elusive key contact in your target market, intelligence on your sector, or you may be worried about getting paid for your product or service. Whatever challenge applies, two key organizations have you covered.
In fact, you probably didn’t know that the Canadian Trade Commissioner Service, Canada’s most comprehensive network of business professionals, works very closely with Export Development Canada, Canada’s export credit agency, to help companies facing such challenges.
Earlier I spoke with a Canadian Trade Commissioner based in Chile and one expert from Export Development Canada at the Prospectors and Developers Association of Canada mining conference. They were there specifically to help companies in the mining sector but their expertise spans all sectors.
Listen in to see how these two key organizations are making it easier for Canadian businesses to take their show on the road.
I’m Michael Mancini, Editor-in-Chief of CanadExport, the official e-magazine of the Canadian Trade Commissioner Service. Visit www.canadexport.gc.ca to subscribe. It takes seconds and it’s free.
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Now back to the show.
I’d like to welcome my next two guests, Mr. Gonzalo Munoz, Trade Commissioner at the Canadian Embassy in Santiago. Thank you for being here.
Gonzalo Munoz: You’re much welcome. Thank you.
Michael Mancini: As well as Kim Lok, Sector Advisor, Extractive Industries at Export Development Canada. Thanks for being here.
Kim Lok: My pleasure.
Michael Mancini: First of all, I’d like to talk about how the Trade Commissioners Service and Export Development Canada work together to help Canadian companies in the mining sector. Gonzalo, tell me first of all what the Trade Commissioners Service does to help Canadian companies.
Gonzalo Munoz: First of all I think we answer a basic question for companies willing to do business abroad, is whether to go or not to go to a given market. In that regards, their product, their service, their business in general , if that business is in demand, if there is a need, there is an interest, opportunities I mean within the local business environment and if that company might be competitive in that environment.
We respond to their inquiries with respect to the business environment, with respect to key companies they should meet with, how to do business in that given environment which might be different than the environment they will find in North America. Could be. But also we put them in contact with key people that can help or that can be clients also in their business development in the territory.
Michael Mancini: Kim, tell me about EDC and the help that EDC provides Canadian companies in this sector.
Kim Lok: EDC is Canada’s export credit agency so it’s our role to support Canadian companies that are interested in exporting or investing abroad. In the mining sector we supported about $14 billion worth of business in 2008 which represented about 20% of EDC’s total book of business. Mining is very important to Canada. It’s very important to EDC.
That support took the form of traditional credits insurance, whereby we provide the Canadian exporter of a good or a service with insurance that their foreign buyer will pay. It also took the form of financing, both corporate financing and project specific or limited recourse financing for companies developing mines either in Canada for exporting product or abroad. The third is the political risk insurance area, where we provide insurance either ourselves or in partnership with other re-insurers for investors or their lenders operating in politically sensitive jurisdictions in mining.
Michael Mancini: Now you guys have worked together to help Canadian companies. When you say you work together and when you say that you work in partnership, what exactly does that mean? How do you work together?
Gonzalo Munoz: First of all we see ourselves as part of a team. We work together to serve the objectives of Canadian clients, the people we are waiting to provide a service to. In that regard we share information about ourselves, we suggest courses of action. We suggest once again contacts, companies, opportunities. We try to define events together in conjunction in order to enhance the possibilities for those companies that are willing to make business abroad.
We normally counsel them together on how to do business. We also try to obtain market intelligence on many occasions together for Canadian climates that we will disseminate.
Kim Lok: One example of that that I think has been particularly helpful in this sector; EDC’s typical model of operation would be to provide a foreign company with a direct loan to buy a Canadian good or service. But in mining, most of the mining companies in the world borrow money in such large amounts that it’s not meaningful for them to obtain a loan for a million dollars worth of a certain Canadian good or service.
That contract might be very meaningful for the Canadian mining supplier but we’re not able to enhance their competitiveness with a direct loan. What we’ve done instead with companies such as Codelco in Chile is provide them with larger facilities in advance of procurement from Canada. They undertake to look to procure from Canada wherever it makes technical and economic sense to them.
Then is when the real work begins for Gonzalo and myself and our team in terms of ensuring that we have a good understanding of what Codelco is procuring from Canada, might like to procure from Canada based on their capex plans and then who have we got back home in Canada that might be capable and interested to supply to Codelco. Then we’ll do matchmaking. We’ll bring the procurement people from Codelco and the Canadian suppliers together and try and really create some business.
Michael Mancini: Tell me how critical it is for organizations like EDC and TCS to work together.
Gonzalo Munoz: In my opinion it’s fundamental. EDC brings that facilitating basically, the financial aspect of the business. We also compete with other country suppliers, countries that have their own credit agencies I mean that will support their exports. If we did not have EDC on board we would probably lose a great part of the business opportunities that there are in external markets for Canadian companies.
Also it helps I mean to foster a relationship with a client as Kim was mentioning, because when you’re bringing money for their financial structure then you’re starting a connection that will probably develop further on to the people that are responsible for procurement, not only the financial area of that given mining company.
Kim Lok: By the same token, it’s essential for EDC to have the Trade Commission Service as a partner for us because what we know from the surveys that we’ve conducted of Canadian exporters and pre-exporters is that the key thing that they lack is information about business opportunities and the proper contacts in market. Without the Trade Commissioners as our partners we can’t provide them that information and they can’t then sell internationally. So we’re crucial I think; very symbiotic.
Michael Mancini: What value is there in the services we provide?
Gonzalo Munoz: The first value is I think that two organizations from the Canadian government are working together on behalf of the exporters of equipment and services in this case. The other great value is that first it provides the logical answer to that question that I was mentioning before – to go or not to go to a given territory; which sometimes saves a lot of money and time for an SME for example. They don’t … they lack probably the resources, human resources and financial resources for take on business in different countries.
I think to have your man in the territory is crucial for a company. We are that people, I mean there. We will provide information directly from the market to the companies. In the case of the Trade Commissioner working with EDC, I think it’s fundamental, as I was mentioning before, that financial connection, I mean that the companies require.
Kim Lok: That’s it. So it’s the strategic business information about where the opportunities are and how to capitalize on them. From our end we try to provide the extra working capital that companies need to be able to go and meet those new business opportunities or the risk management that they might require depending on the market that they’re operating in.
Michael Mancini: On a final note, what pieces of advice would you both offer Canadian companies right now?
Gonzalo Munoz: The first thing I would suggest is that any company seeking for doing business abroad, what they require is information. The first information they should get is to contact the regional office of the Canadian Trade Commissioners Service in the province in which they live. Then after that they will receive a lot of counselling and information.
Then contact the post, contact the post and the post will probably give them information on opportunities, contacts, companies, clients, business environment. Once they are in situ they will probably be able to do business and support it, I mean as an exporter by EDC, by the post and by other sources, I mean they can find immediately from the post.
For example, one fundamental source is you need to incorporate in the territory you are doing business at. You need to have a representative, an agent, a partner, a joint venture probably to pursue the type of business you want to do. Those types of answers, we are ready to provide.
Kim Lok: So it’s contact the resources available to you early and leverage them. Let the Trade Commissioners provide you with strategic business information. Contact EDC early because the sooner that we become involved with you and start to get to understand your business, the more that we can help you shape contracts with your customers so that they’re going to be able to be supported by EDC.
We can help to build connections with other financial institutions that we like to operate in partnership with. We can be there as part of your team.
Michael Mancini: Kim and Gonzalo, thank you very much for taking this time today.
Gonzalo Munoz: Thanks to you Michael. It’s a pleasure.
Well, that’s all for this podcast edition of CanadExport.
Like Gonzalo said, contact the Canadian Trade Commissioner Service’s network of Regional Office across Canada at www.tradecommissioner.gc.ca. Also, for more information on how Export Development Canada can help you, visit www.edc.ca.
To download our other podcasts, just go to www.canadexport.gc.ca or go to iTunes.com and use the searchword “CanadExport”.
Stay tuned for our next podcast when I speak to Jim Balsillie, Co-CEO of Research in Motion, one of Canada’s most successful companies. That should be interesting.
I’m Michael Mancini, signing off for now.
To download our other episodes, just go to www.canadexport.gc.ca or go to iTunes and use the searchword “CanadExport.”
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