Pockets of opportunity exist for local manufacturers to sell into foreign markets, despite a world-wide recession.
Trade directors from Alberta International and Intergovernmental Relations outlined means of seizing those opportunities on Thursday to a gathering organized by the Central Alberta Rural Manufacturers Association.
India is probably the leading area for new opportunities in the oilfield, said Rahul Sharma, an Edmonton-based trade director specializing in southeast Asia, Oceania and the Middle East.
Despite the worldwide collapse, India’s economy is still growing at seven per cent a year and the country plans a massive expansion of oil exploration, said Sharma.
It drilled only 400 wells in 2006, compared with 22,000 wells drilled in Alberta during the same period. To meet its growing energy demands, India plans to drill 5,000 wells by 2012, he said.
Alberta’s oilfield industry has strong connections with India which it can exploit to get in on the ground floor of that activity, said Sharma.
Partnering with Alberta’s trade missions is prudent and effective way to learn where the opportunities lie and how to avoid pitfalls, said Josephine Choi, Alberta’s senior trade and investment director for North Asia.
In response to a question from the audience, Choi acknowledged that Alberta companies sometimes get burned in deals with foreign trading partners. At the same time, Alberta companies can also be burned by Alberta trading partners, she said.
Foreign countries, including China, have radically reduced the legal glitches that scuttled deals in the past, said Choi.
When a contract is written in two languages, it is important that a lawyer who understands both languages review the contract to ensure that the two versions mean the same thing, she said.
CARMA member Garett Cupples, who manufactures oilfield service equipment in Red Deer County, said his first international deal was worth a little more than his total sales for the previous year. In 12 years of exporting to countries as diverse as Poland and Kazakhstan, Cupples said he has lost only $2,000 on a deal that went sour.
Fabricio Lima, trade director for South America, said Alberta business operators must understand that, in Latin America especially, people will not cut deals with people they don’t know. It’s important, therefore to develop and cultivate relationships.
Alberta business operators who hope to penetrate foreign markets can participate in trade shows with Alberta and Canada’s trade missions overseas, said Choi.
Those same business operators should also be prepared for the trade missions to contact them when foreign representatives are visiting Alberta and wish to meet local manufacturers and tour their facilities, she said.
Information about Alberta’s trade missions can be viewed online at www.alberta-canada.com