Jerry Cook Editor, MPP jcook@clbmedia.ca

Economic downturn doesn’t deter expansion plans

Despite the global economic downturn, many Canadian private sector companies are still optimstic about the future and have no intention of changing any plans for expansion, according to a recent KPMG survey.

The KPMG survey entitled, “Taking on the World: Positioning Private Companies for Global Success”, noted that one-half of the Canadian private companies surveyed said a downturn in the economy would not prompt them to alter their expansion plans.

The KPMG Enterprise survey consisted of two components: a telephone survey of 200 companies conducted by a third party research firm and one-on-one interviews carried out by KPMG and 22 executives of selected companies.

“It is interesting to note that, regardless of the current economic climate, private Canadian companies still see opportunities for continued growth and revenue abroad,” said Beth Wilson, national leader of KPMG Enterprise, in releasing the survey. “In fact, one-third of the companies we surveyed indicated that they would continue to increase their expansion activity regardless of a downturn.”

At the same time, nearly two-thirds of respondents also indicated that they plan to expand outside Canada over the next five years.

According to the survey, 50% of survey respondents said they felt their expansion outside of Canada to date has been successful. The greatest factors influencing companies when deciding to do business abroad were: the target country’s economy (53%); the organization’s business growth planning (47%); the company’s local economy (38%); and the Canadian economy (32%).

However, approximately one-fifth of respondents did indicate that they abandoned their global operations, citing various reasons as key factors including: the value of the Canadian dollar relative to foreign currencies; challenges selling in an ailing U.S. economy; inability to justify focusing on foreign operations when our own economy is relatively healthy; and the rising cost of fuel.

Another less quantifiable aspect, but often mentioned as a challenge for conducting business in foreign markets, was the cultural difficulties faced. Companies also noted lining up human resources as a factor that hindered their organization’s success abroad.

Despite the obvious trend toward global expansion, many private companies surveyed admitted they face some significant challenges raising revenue from their foreign operations. One-half of companies surveyed said less than 40% of their revenue came from their non-Canadian operations.

Moreover, nearly one-half said they expect that their revenues from these foreign operations will grow by less than 20% during the next five years. That being said, a significant 34% of companies surveyed said more than 60% of their revenue was from abroad.

Not surprisingly, respondents cited currency fluctuations and financial risks as the two biggest challenges they face when expanding their domestic operations into a foreign market.

“Aside from all the obvious risks and challenges Canadian private companies face when expanding into foreign markets, there is clearly a strong rationale for their continued growth abroad,” said Wilson. “At one time, going global was seen as a competitive advantage for big companies who wanted to expand their market share and remain competitive. We are now seeing this trend emerge among privately held Canadian companies who must also follow the same mantra to maintain their continued growth and success.”

Calgary hosts 40th Worldskills Competition

The 40th Worldskills Competition will be held in Calgary, AB later this year and feature over 1,000 competitors from 51 member countries.

The eyes of the world will be on Calgary, AB later this year when the city hosts the 40th WorldSkills Competition; only the second time in its 50-year history that the event will be held in Canada.

The 40th WorldSkills Competition, which will be held September 1-7 at the Calgary Stampede Park in Calgary, will push skills training in Canada into the global spotlight. The event is designed to enhance the global profile of skills training while, at the same time, encouraging young people to pursue careers in the trades.

The event, which is held every two years, will feature over 1,000 competitors from 51 member countries competing in 45 skill categories. Some of the skill categories include CNC milling, CNC turning, welding, aircraft mechanics, mechatronics, polymechanics/automation, and more. The event was last held in Canada in Montreal, QC in 1999.

The 40th WorldSkills Competition has an operating budget of approximately $60 million including funding from both the Alberta and federal governments. Private sector sponsors of the event include Haas, Festo, Samsung, and many others.

Canada will be represented in the competition by 38 competitors participating in 35 contest areas. The 38 Canadian competitors were selected following the Skills/Competences Canada’s 2008 Canadian Skills Competition. After Canada was selected as the host country for the event, Skills/Competences Canada, which is a member of WorldSkills International, established WorldSkills Calgary 2009 Ltd. to host and plan the event.

A number of other events will also be held in conjunction with the 40th WorldSkills Competition including Skills City which will feature Try-A-Trade demonstrations that will allow visitors to try dozens of trades and technology career options.

The competition will cover approximately 800,000 sq. ft. of space and is expected to attract nearly 150,000 attendees. For further information on the 40th WorldSkills Competition visit www.skillscanada.com or telephone 1-(877)-754-5226.

Click on cover to view the
November 2008 Digital Edition

Special Features

• Welding Equipment/Supplies
• Fabricating/Forming
• Laser/Robotics/Automation

Product Spotlight

• Turning Centers/CNC Machine Tools
• Software Solutions

Industry Report

• Job Shops

Regular Features

• Software Solutions
• Welding Zone

For MP&P advertising information e-mail: nbishop@clbmedia.ca or click here to download the 2009 Media Kit.

Closing dates for ads is January 9th.

Canadian Machine Tool Distributors Association - A resource for Canadian machine tool distributors.
www.cmtda.com

Canadian Tooling & Machining Association - Information resource for the Canadian tooling & machining industry.
www.ctma.com

Canadian Welding Bureau - Information resource for the Canadian welding industry.
www.cwbgroup.org