City firms feast on the east. Cultivating sales, offices in Eastern Europe.
Wanted: Russian-speaking grain-storage equipment professional based in Madrid.
Apply to Westeel Storage Solutions, St. Boniface, Manitoba.
In fact, Westeel is looking for several multilingual industry professionals -- as many as 15 -- to staff the Winnipeg company's European office that it's just opening in the Spanish capital.
Winnipeg-based Westeel, a division of Vicwest Corp., is one of Canada's foremost manufacturers of on-farm and commercial steel storage products for the agricultural industry.
It has exported to more than 30 countries around the world and has about 30 dealer relationships. But the market demand and opportunities, especially in Eastern Europe, require something more.
"We decided we wanted to continue growing internationally," André Granger, Westeel's vice-president and general manager, said Friday. "And if you want to do that, you have to be in those regions."
All of the market development experts expect demand for agricultural machinery and equipment to increase sharply over the next few years in the grain growing region that includes Russia, Ukraine and Kazakhstan.
Manitoba's ag equipment manufacturers like Westeel, Ag Growth International, Buhler Industries WGI Westman and MacDon are all benefitting from the strong commodity cycle.
Despite weather-related disruptions in this year's western Canadian crop, they are all in solid positions and all of them are pursing market development projects in Eastern Europe.
MacDon, the privately held Winnipeg manufacturer of harvesting equipment, opened a sales office in Moscow last year.
Buhler Industries, the Winnipeg tractor and equipment manufacturer, arguably has the best leverage of the bunch into that market.
That's because Russian combine manufacturer, Combine Factory Rostselmash Ltd, is Buhler's majority owner. The connection gives Buhler access to sell its Versatile brand tractors through Rostselmash's network of 200 dealers in Eastern Europe.
But it's an indication of the challenges of breaking into that market that even that is no guarantee of sales.
Dmitry Lyubimov, Buhler's CEO, said the lingering effects of the collapse of the global credit markets are still being felt in the region. There may be demand, but the credit to allow Buhler's potential customers to make the purchase is only starting to materialize.
There are signs that's opening up and it could mean a bonanza for Buhler.
"Our expectation's that in the next few years we will be generating 50 per cent of our total sales from that region," Lyubimov said.
He said this past summer there were solid orders but his Fort Garry plant needs six-to-10 weeks' lead time to ship to that part of the world, so he said significant shipments -- and sales -- for next year should begin soon.
Westeel's forecast for its European business may not be as grand as Buhler's, but it believes it is making all the right moves. The company says 80 per cent of its sales are in North America and the majority of that in Canada.
Granger said with professionals on the ground in Europe, it will not only be able to enhance its on-farm dealers presence, but be able to better integrate its storage equipment into larger commercial developments that are also proceeding.
"There will be a period of time as we get organized," Granger said. "But I definitely think there will be a step up in the volume of business we'll be doing after a year or so."
Winnipeg-based Ag Growth International makes stationary grain handling, storage and conditioning equipment in plants across Western Canada and the United States. Two years ago it bought a company in Finland and is using that company's distribution network to work its deep product portfolio into the market.
While it is taking longer to develop than was initially hoped, Gary Anderson, Ag Growth's CEO, said it's still a market where the company has a high level of both interest and deployed resources.
"We're quoting on lots of business," he said.
But Anderson said some new wrinkles are developing that are to Ag Growth's advantages.
"We are starting to see the large grain handling companies like ADM, Cargill and Bunge taking control of some big projects," he said.
For Ag Growth, that means not only can it count on more paying customers in the region, but it will also allow it to further develop its relationship with companies that it will seek partnerships with elsewhere in North America and around the world.
Oil fuels boom
Here's some of what's attracting Manitoba ag manufacturers to Eastern Europe:
-- The end of the Soviet Union and development of a market economy has drastically changed the dynamics in that large grain growing region.
-- Development of the oil and resource sectors has generated significant wealth and increases in per capita incomes, leading to improved diets in the region.
-- The existing grain handling infrastructure -- including virtually no on-farm storage capacity -- is in dire need of major overhaul and investment.
-- The range of products made by Winnipeg companies coupled with their stellar track record in the Canadian Prairies and the U.S. Midwest make them highly desirable in this developing market.
Republished from the Winnipeg Free Press print edition October 15, 2011 B6
