GLOBE-Net (June 11, 2009) - How does a company in a small city become a global player in the high-tech industry? It's not easy; and it doesn't happen overnight. It takes holistic strategic thinking and a worldwide vision - two things that have been at the core of Carmanah Technologies Corporation since its founding in 1996.
Carmanah Technologies is currently the largest supplier of solar power systems and solar-LED lighting in Canada. Headquartered in picturesque Victoria, British Columbia, population 340,000, the company has managed to take its unique, niche-focused products into markets in over 110 countries, securing million dollar contracts in countries like the United Arab Emirates and Morocco. As stated on the company's tagline, "we put solar to work" - often in remote locations and under extreme conditions, away from electricity grids.
The company was started by Dr. David Green. An engineer by trade, Green is experienced in the management and operation of high-tech companies. He is also an acknowledged expert in light emitting diode (LED) technology. On a family sailing trip over a decade ago, he found that using his boat lights when anchored at night would drain the battery. This gave him the idea to produce marine markers that operate on stored solar power and led to the creation of Carmanah Technologies.
After years of research, product development, testing, and certification, the company closed its first deal with the Coast Guard, providing self-contained solar-powered LED marine lanterns for navigational buoys. Guaranteed to last for five years, each installation cut their customer's servicing costs by approximately $250,000 over the lifetime of the light.
From there, Carmanah began branching out to new solar lighting opportunities including transit shelters, construction sites, airport taxi ways, and street signs to name a few. With ISO standards and international patents, the company created barriers to entry from competition and was able to grow rapidly.
It began developing solar power systems, for both off and on-grid applications. Its unique solar power systems provide off-grid power in a variety of industries including oil and gas, mining, and telecommunications. The company has undertaken dozens of solar grid-tie projects across Canada, including a $1.4 million contract to install a 108-kilowatt photovoltaic (PV) system on a Provincial building on Prince Edward Island back in 2008.
Despite the solid leadership from previous CEO Art Aylesworth, Carmanah's quick growth resulted in increased pressures in the areas of design, manufacturing, marketing, sales, and distribution. Being pulled in so many directions resulted in high expenses and lower margins, forcing the company to take a hard look at its core strategies.
Enter current CEO, Ted Lattimore. Since coming on board in 2007, he has led Carmanah through a major restructuring focusing on core competencies. He is not new to reorganizing companies. He successfully managed a $300 million loan restructuring as President and COO for Vodafone Romania, the biggest private placement in Romanian history.
According to Lattimore, for a company to be successful, it needs to take a comprehensive approach to business. "While many organizations put too much emphasis on a single area like product development, market demand, or customer relations, it is important for companies to focus on all details as a whole," he told GLOBE-Net.
Lattimore identifies four major areas of focus for his company; strategic partnerships, worldwide sales tactics, scalability throughout the business, and unique product features and product investment strategies.
With the assistance of the new corporate executive team, he has helped Carmanah to focus on its strategic business units - solar LED lighting and off-grid power systems.
The company has since exited of the transit and home power markets, and divested of its non-solar LED roadway signage business. It has also changed from a vertical distribution structure to a more regional-based model, adding key sales, marketing, and business development positions. 2008 was a "year of transformation" according to the company.
The company's new focus following restructuring has resulted in stronger partnerships with Original Equipment Manufacturers (OEMs), suppliers, and distributors. To avoid layoffs during boom and bust periods in manufacturing and to help achieve economies of scale, Carmanah now outsources its manufacturing to Texas-based Flextronics. A partnership with RUUD lighting in Wisconsin was concluded to further improve area lighting and general illumination installations, suitable for locations like parking lots and jogging trails.
With no debt and a cash balance of more than $9 million, Carmanah plans to invest $6 million in research and development in 2009, focusing in particular on making its solar area lighting more cost-competitive with traditional lighting fixtures. In an interview with GLOBE-Net, Lattimore noted that a "tipping point" will be achieved in developing area lighting installations that are three to four times brighter than present, allowing for increased sales around the world.
Despite the current recession and flat first quarter sales in 2009, the company expects future growth to be strong, pointing to the fact that the company's trusted solar power systems and lighting solutions provide safety and security.
With approximately 80 percent of its $60.6 million revenues in 2008 coming from North American sources, Carmanah sees big opportunities outside the continent in sun-drenched locations like Europe, South America, and in particular, Africa. Carmanah realizes that winning strategies often revolve around a company's ability to adapt to local realities. Since many places in Africa are isolated from reliable electricity grids, the potential for sales is significant as decreasing prices for solar lighting systems expand market access.
Carmanah Technologies has a goal of reaching $200 million in annual sales within five years, half of which are planned to come from outside North America. As climate change issues and emissions reduction schemes begin to have an impact on countries worldwide, the opportunities for low-carbon lighting and power solutions are endless. Carmanah Technologies is perfectly positioned for the future, and with a holistic strategic approach, the company is all solar-powered systems go.