London Calling

The EU's friendly economic climate attracts a fleet of B.C. companies - with the UK a natural launchpad.

Tuesday, August 7, 2007

A record number of Canadian companies have set up shop in the United Kingdom - including 86 from B.C. - with many using it as a launchpad for business with the European Union.

Canadian companies initiated 82 new projects in the UK last year, compared to 51 projects in 2003, making Canada the third largest foreign investor on British soil, according to a new report by UK Trade and Investment. Canada was behind only France and the United States as the largest investor in the United Kingdom in 2006.

Of the B.C.-based operators in the U.K., 52 are in the information and communication technology and business and financial sectors; 18 are in engineering and energy sectors (including oil and gas and aerospace) and the remaining are in life sciences, chemicals and retail sectors.

"We are half a billion people of a more or less developed economic mind-set, that is a huge market into which Canada incidentally sells extremely well," said Nicholas Armour, British consul general for UK Trade and Investment in Canada, referring to the European Union's 456 million consumers. For Canada, friendly economic regulations in the EU can make it worthwhile for Canadian companies to have a foot firmly planted there, said Armour. "Quite often it is easier to sell within the European Union, or to transfer employees within the European Union, than it is within Canada because of provincial jurisdictional requirements."

Victoria's Carmanah Technologies has been doing business in London since 2001, when it signed a contract to provide the capital city's transit system with solar LED lighting systems.

The company enjoys annual revenue of roughly $7 million from its UK office, with 2007 the first year that it is using London as a springboard for business in mainland Europe.

The expansion is necessary to remain globally competitive, said Carmanah CEO Art Aylesworth. While the company is ramping up business efforts in Europe, the company doesn't plan to grow its Canadian base. "The world is getting flatter. As we grow, we won't grow our manufacturing facilities here. We will do more and more manufacturing elsewhere."

Vancouver's Extreme CCTV extended its UK presence in August 2006 by acquiring Forward Vision CCTV of Newcastle upon Tyne, having purchased Derwent Systems Ltd. in 2001. Extreme's European operations are now based out of the Derwent office in Northumberland.

The company makes specialized surveillance systems that are used by the UK secret services and Ministry of Defence. For Extreme, setting up shop in UK made straightforward business sense - the nation has the highest per- capita usage of surveillance cameras in the world.

Extreme president and CEO Jack Gin said it certainly uses Britain as a gateway to new markets. "If we see market opportunities in the UK, Europe or the Middle East Â… it is nice to have people on the ground who are employed for you in that same time zone. People buy from people, and it is really difficult being here on the West Coast, eight to nine time zones away."

Canada's Ministry of Industry recently created a competition policy review panel to examine restrictions that limit foreign investment into Canada, as well as restrictions in place in other countries that may limit Canadian investment abroad. "This is about being more competitive, if the Canadians companies are allowed to invest abroad, it makes them more strong domestically," said Industry Canada's Isabelle Fontaine. The panel plans to update the Invest Canada Act and the Competition Act - both of which have not been reviewed in more than 20 years - to consider ways that Canada can dominate in global markets.