How To Build International Partnerships in the Resource Industry

When it comes to success in international markets, the size of your business is not really a factor. What does enter into the success equation is commitment, a clear marketing strategy, understanding of cultural differences, building networks and leaving a positive legacy. BioteQ became successful as a Canadian exporter by adopting innovative approaches to new markets that has enabled us to bring our wastewater treatment technology to major mining operations around the world.

Since our inception, we have been aggressive in our pursuit of export markets, in large part because our customer base -which includes the world’s leading mining companies, utilities and regulators -have international operations that require water treatment solutions that address increasingly stringent environmental demands. To date, we have operations in Canada, the US, Mexico, Australia and China, and a new presence in Chile.

Our first foray outside of North America was into China, arguably one of the more challenging markets in the sector. In 2006 we entered a joint venture with Jiangxi Copper Company (JCC) to design and build water treatment facilities for six potential sites in China. Since signing the agreement with Jiangxi Copper, we’ve established two plants at the company’s flagship Dexing mine to recover dissolved copper from mine drainage and enhance the environmental performance of the site. A third water treatment plant is currently under construction at the Dexing mine to recover cobalt and nickel.

International success has translated into revenue growth. We’ve doubled our revenues since 2006, and export revenues now account for more than 60% of our total revenues.

A targeted approach

Given the nature of the product and market, our focus has always been on targeting countries that have significant mining activities and, in particular, regions within those countries where there are strong environment regulations governing water quality and use. Once those markets are established, our next step is identifying those companies with significant operations in those regions and building networks to communicate with them. This approach enables us to optimize our internal resources to pinpoint opportunities with the greatest chance of success.

By way of example, when we decided in 2005 to enter the market in China, we first identified the regions in China where there was significant mining activity and where regulations for water quality were being enforced. This helped us narrow our focus to Jiangxi Province, located in the south-eastern region of China.

Next, we identified the largest mining companies operating in that region. Based on this analysis, we focused our attention on Jiangxi Copper Company, the largest copper producer in China.

During this time, we sought out Canadian government contacts with the National Research Council (NRC) and International Trade Canada to establish meetings with key Chinese government officials.

Through the NRC, we were introduced to Carol Huang, a young Environmental Engineering graduate from the University of British Columbia. Carol was born and raised in China, with graduate degree training in Canada; she provided a bridge between cultures and a network of useful contacts in China. We hired Carol to provide business development support for our China marketing efforts.

With Carol’s assistance, we built a relationship with senior officials from Jiangxi Copper Company. This involved commitment from senior management to travel frequently to China for face-to-face discussions, building trust and respect with our potential business partners. This paved the way for our joint venture agreement, signed in 2006.

As joint venture partners, capital and operating costs of the water treatment plants are shared equally by BioteQ and Jiangxi Copper Company. We are responsible for technical operations and JCC manages local administrative, procurement and government activities.

We have taken measures to ensure that our presence in China leaves a positive local impact. In addition to the environmental benefits delivered by our technologies, our operations are run by technicians hired from the local community. This approach has created a “win-win” for both BioteQ and the community where we operate.

Overcoming challenges in international markets

While the new business development process seems straightforward, there are inevitable challenges to overcome when entering any new international market. Establishing a target market and understanding the local operating environment can put you at a decided disadvantage if not executed properly. Not having the right pieces in place can lead to cultural discrepancies, misaligned marketing approaches, and ultimately, failure.

Another crucial element is finding the right local partners. BioteQ has been fortunate to work with Jiangxi Copper Company, as they bring tremendous resources in project management that have been essential during the construction stages of our plant. Their knowledge of the local regulations and labour market has been helpful for our continuing operations.

Building partnerships with local business leaders and suppliers that are knowledgeable about the local market and are receptive to working with you to champion new ideas is essential. Having local knowledge can prove invaluable when you are entering negotiations and/or construction phases, or establishing joint venture agreements. In both cases, an “inside” understanding is essential to a successful outcome.

Also, international trade organizations can play a valuable role in supporting your export efforts. Federal and provincial trade agencies, as well as professional services firms (e. g. banking, legal, accounting) can help immensely in providing local contacts, strategic direction and support.

For example, our company uses HSBC ( “the world’s local bank”), which provides for seamless financial transactions between countries. Our accounting firm, PricewaterhouseCoopers, has an international network of offices that provide accounting support for our foreign operations.

Establishing a local presence is essential in ensuring sustainability and building trust. We firmly believe that to be successful in foreign markets, companies must commit both financial and human resources to develop those markets. This includes hiring staff that speak the local language and understand the cultural nuances, as well as ensuring that senior executives maintain a high profile with current and potential customers. This practice not only helps companies build stronger human resource capacity in foreign markets, those same resources can help to ensure operations run smoothly and also be used to develop even more new business opportunities.

To that end, BioteQ has established operating subsidiaries in key international markets, including the U.S., South America, Australia and Asia. This type of local company presence helps to demonstrate our commitment to the market.

In a global economy, it is essential to look beyond our borders. Canadian firms are well positioned to grow internationally, with a multi-cultural workforce and strong networks. The key is to ensure that the right business relationships, local partnerships, human and financial resources, and marketing strategies are in place to support customers in meeting their goals. Ultimately, staying true to this approach will lead to sustainable success in international markets.

CMJ