Quebec firms look to become suppliers of Russian home renovation retailer
Quebec suppliers to North American home renovation giants such as Rona (TSX:RON) and Home Depot are hoping to partner with a growing Russian retailer to diversify their sales opportunities.
More than 60 firms met Thursday with a buyer from Leroy Merlin Russia and an expert in the Russian home renovation market. About 20 of them also had individual meetings.
"The market over there has a huge appetite for lots and lots of products," says Michel Leblanc, president of the Montreal Board of Trade, which facilitated the meetings in collaboration with Quebec's economic development department.
A similar event was held earlier this month for three buyers from the United Nations.
While it's difficult to assess the financial returns of such efforts, the board says they have resulted in more than $100 million of economic return since 2001.
The Russian company, which sources 70 per cent of its products from abroad, has 11 stores, but plans to add 35 more by 2013.
Its parent company is the world's sixth-largest renovation centre company with more than 236 stores in Europe, Brazil, China and Russia, sales of 4.3 billion euros (C$6.6 billion) and more than 2,700 suppliers. It is part of France-based Groupe Adeo.
The buyer's day in Montreal was its only stop in Canada.
Among the companies that had private meetings were 20-20 Technologies (TSX:TWT), a leading provider of computer-aided design, sales and manufacturing software, toolbox manufacturer SPG International, and Synapse Electronique, a manufacturer of electronic thermostats.
None of the companies could be reached for comment, but each has worked to expand its global presence.
20-20 Technologies has partnered with Swedish furniture retailer Ikea, while privately owned Synapse earlier this year opened a sales office in the United States to tap into the lucrative market.
Russia is a small, but growing market, for Quebec exports. As of 2006, just 0.3 per cent of Quebec's exports were sent to Russia, and 0.9 per cent of its imports came from the country. That's triple the levels from 1998.
While the focus will remain first on developing the American market, Leblanc said it would be foolish not to attempt to diversify sales by taking advantage of an opportunity in Russia.
"Global trade if we can succeed we create jobs here, it's good for everyone," he said in an interview.
Canada could improve its chances of expanding exports if such events could be co-ordinated with other cities to allow buyers to meet with more potential suppliers, Leblanc added.
Russia is an attractive market for some Canadian producers, in part, because a similar climate gives them a competitive advantage. Despite the rising loonie, Canadian products are also very attractive to Russians because they are lower in cost, he said.
The residential and commercial construction sectors are growing in Russia because of a series of governmental programs.
The primary needs by buyers are in kitchens and basements, home decor, construction equipment and materials, doors and windows as well as gardens and landscaping.
Federal Trade Minister Stockwell Day led a 33-company trade mission to Russia last June in a bid to boost Canadian exports.
Day said the Russian Federation is an emerging market and a key partner for Canadian companies specializing in technology, agriculture and infrastructure.
Canada's exports to Russia grew by 30 per cent in 2008 and have increased almost sevenfold since 2000.
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