OTTAWA, March 11, 2015 /CNW/ - Export Development Canada (EDC) today announced a USD 750 K credit facility for GNRTECH, S. DE R.L. DE C.V (GNR Mexico), a foreign affiliate of Montreal, Quebec's GNR Technologies (GNR).
The facility will be used to finance the continued growth of GNR's affiliate, which has already expanded operations from a 5,000 square-foot warehouse to a 25,000 square-foot production facility, since being established in 2007.
GNR is a leading global manufacturer of recycled rubber parking lot safety devices and traffic solutions.
"Expanding into Mexico initiated what you might call a growth movement for GNR," said Alain Masson, President of GNR. "Our sales volume went up, our production capacity increased, and we started to save on freight costs. We used the additional revenue to hire more engineers in Canada and invest in research and development. With more value added jobs we were able to create new products and improve on our existing ones, further increasing sales. Our affiliate in Mexico really acted as a catalyst in all this, and with EDC's support, we look forward to more growth in new geographies."
EDC finances Canadian foreign affiliates like GNR Mexico because market and production diversification strengthens the Canadian parent company. Foreign affiliates insulate the parent against economic and currency fluctuations, both domestic and international, and help grow the parent company's bottom line. In addition, a stronger Canadian parent usually creates higher value jobs in Canada, like the engineering positions that GNR was able to create.
In the past decade, Canadian foreign affiliate sales have grown twice as fast as traditional export sales and today, Canadian companies generate as many sales from affiliates every year as they do from exports, roughly CAD 500 B each.
"GNR provides a great example of the advantages that international expansion provides," said Carl Burlock, Senior Vice-President, Financing and Investments, EDC. "Once Canadian companies are operating abroad, they reap the benefits of in-market exposure to new supply chains and deeper relationships with major foreign buyers. This allows them to learn about new opportunities sooner, and improves their competitiveness in bidding for new contracts."
But expanding through foreign investment has its challenges. Small-to medium-sized enterprises (SMEs), for example, might have trouble getting access to the resources they need, such as financing, insurance, and foreign market knowledge.
EDC has a number of solutions to help SMEs overcome these challenges, including financing, guarantees that will help unlock financing from banks, foreign market intelligence, insurance against political risk, as well as insurance that will cover SMEs in the event that a foreign buyer can't or won't pay. In GNR's case, EDC worked in collaboration with their bank to determine the best options for financing.
"If Canadian companies are thinking about investing into a new market, EDC can provide all of the financial tools necessary to make it possible. If your company is ready to take that step, give us a call; we'll make sure you're well-equipped," said Mr. Burlock.
Companies interested in learning more about financing and insurance options for their foreign investments can call 1-888-434-8508 or visit our investing in foreign markets page.
ExportWise.ca article about GNR Technologies: How Recycled Tires led to Foreign Buyers: GNR Technologies' story
EDC is Canada's trade finance agency, providing financing and insurance solutions locally and around the world to help Canadian companies of any size respond to international business opportunities. As a profitable Crown corporation that operates on commercial principles, EDC works together with private- and public-sector financial institutions to create greater capacity for Canadian companies to engage in trade and investment.
SOURCE Export Development Canada
For further information: Simon Forsyth, Export Development Canada, (613) 598-3852, [email protected]