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“
Brad Thorlakson is the CEO of Tolko Industries – a manufacturer of specialty forest products based in Vernon, BC.
When and why did the company first start thinking about exporting?
In the early 70s my grandfather started exporting metric lumber for international markets because he got a better financial return by doing that. It was finding customers in international markets that helped the company grow from its early stages.
What has your export journey been like?
It’s been exciting and it’s been very rewarding because we’ve been at it for 40 years, and each year we continue to grow. It’s part of the solid foundation for our company to make sure that we can operate our assets at their full capacity.
What is the biggest difference between selling in Canada and selling in another country? How did you adapt to that difference?
The first piece would be any language or cultural barriers to deal with as well as time zones. Then there are the logistics of being able to get the product there and making sure you have the payment and credit process figured out. Additionally, dealing with any specific needs a customer might have from a product perspective.
How has exporting changed the way you sell your products in Canada?
One of the spinoffs of exporting is that some of the international companies have come to Canada and started businesses. For example, Mitsui Homes, a large Japanese homebuilder, has come to Canada and is building projects here. They built a school in my community and they used our lumber, so we’ve been able to leverage that international relationship.
What have you learned from exporting that has benefited your operations in Canada?
The Japanese are very demanding, both in terms of grade and service, so our dealings with the Japanese have benefitted all of our customers because of the expectations the Japanese put around doing business on an on-going basis. That affects the consistency of your product, the delivery date, the overall package that you put together.
Can you share the best lesson learned from a bad exporting experience?
The best lesson I’ve learned is to make sure you get it right before you ship it from the mill. It’s very expensive to go into an international market and have it not be correct, both from a cost and a reputational perspective. So it’s important to understand what the customer wants and to execute against that consistently. If you’re moving stuff all the way around the globe and you have an issue, it’s challenging from a cost and time perspective to resolve it.
What do you know now that you wish you knew when you became CEO?
I wish I had known how bad it was going to get in North America. But I think the positive is that the industry was able to reposition itself in a relatively short period of time to deal with the significant downturn.
What is the No. 1 thing new SMEs need to know about exporting and trade?
A small company can be effective in global markets, but it really has to know what customers are looking for and how to meet their needs successfully. At the end of the day, there are a lot of people competing for that business and you have to understand what you are and how you differentiate yourself from your competition. It could be finding a niche market, it could be how well you are able to ship your product, or it could be having an innovative product. There are many ways a company can differentiate itself.
What is the one characteristic that you believe every exporter should possess?
Persistence. It’s not easy because there are going to be hurdles to overcome to get in to new markets. Usually if it’s your first visit, you don’t come back with a lot of orders, but you have to stick with it. And you need to take a bit of a rifle approach to figure out what markets and customers you’re going to be the most successful with, rather than a shotgun approach, because the globe is a big place. Even though we do business in 30 countries, I would say we do most of our business in probably eight or nine and we probably put most of our focus into three or four.