Know your markets and assess your risks: Export insights from Granules LG’s Ken St-Gelais

Know your markets and assess your risks: Export insights from Granules LG’s Ken St-Gelais

This story is part of the softwood lumber series.

To learn more about export opportunities for companies in this sector, please read Canada’s softwood industry needs innovation for long-term growth, not just a hot U.S. housing market

Ken St-Gelais is the General Manager of Granules LG Inc. – a Quebec-based company that sells wood pellets used in home heating to the U.S. and Europe.

You can read about its export journey here.

When and why did you first start thinking about exporting beyond North America as part of your business?

We were exporting to the U.S., but even with the growth of that market, in 2007 it was not accepting our capacity so we needed to open other markets and we looked at Italy.

What was your export journey like to get to where you are today?

In 2015, the domestic demand was so large that we had to stop exporting to the European market – but we still kept the U.S. market. Now, we have started to open the European markets again because of the warm weather here domestically.

What is the biggest difference between selling in North America and selling abroad? How did you adapt to that difference?

Logistics is really a big challenge. You have to find someone who knows about it and who speaks the language. You want the customer to take responsibility for logistics, but you have to understand it.

How has exporting changed the way you market/sell your products/services in Canada?

In terms of quality, Europe is more demanding, so it helped push us to get approved and certified to meet the quality standards there. We had to make higher-quality pellets, so that’s helped us domestically.

What have you learned from exporting that has benefitted your sales/operations in Canada?

We have learned about the different tools available to limit the risk of using credit. And, we’ve learned about getting paid.

Can you share the best lesson learned from a bad exporting experience?

We learned to read between the lines in contracts and also that the business culture can be different. A person can interpret a contract in a different way because of his/her culture.

When it comes to exports, what do you know now that you wish you knew then?

We know now that it’s important to know a market more in-depth and to assess the risk – not to sell on the spot. We are going to sell 40,000 tons this year and we anticipated that 18 months ago. We don’t do business now only for the opportunity. We visit the customer and we have them visit us. We do the due diligence because we are not looking for 1,000 tons, we are looking for 30,000 tons. It is a project; it is not just a sale.

What is the #1 thing new SMEs need to know about exporting and trade?

Try to know the market as much as possible. Try to know the customer and to understand their needs.

What is the one characteristic that you believe every exporter should possess?

Curiosity, because it forces you to dig deep enough to understand everything.

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