How Recycled Tires led to Foreign Buyers: GNR Technologies’ story

How Recycled Tires led to Foreign Buyers: GNR Technologies’ story

Who says Superheroes have to be masked crusaders?

GNR Technologies (GNR) has a unique power; they transform discarded tires into specialized humps, bumps, and guards that bring order to unruly parking lots and municipal streets around the world.

And while their products protect cars, drivers and pedestrians from dings, scratches and injury, GNR is also doing their part to protect the environment by recycling non-degradable tires. What’s more, they re-invested profits from their parking solutions to build radar speed signs that calm traffic in school zones, meaning their products also help protect school children. Impressed?

These products (powers?) did not come overnight, however. Like the protagonist in any good comic, GNR had to come-of-age.

Chapter 1: Where the rubber hits the road

The Montreal-based company started in 1995, manufacturing rubber adjustor rings for manholes and rubber bases for traffic barrels. They were quality products in their own right, but profit margins were relatively low and it was slow-going early on.

“We were producing great products and getting by, but eventually realized that selling to other companies without really getting our own brand and identity out there wasn’t a great strategy for real international growth,” said Alain Masson, President of GNR. “We had to change our focus, and start promoting ourselves, rather than simply contributing to other company’s end products.”

The turning point for GNR came in 2004 when management turned the company’s focus to parking lot safety solutions. These would be the proprietary products that GNR would use to build their public brand and identity. Next, they pushed for GNR to grow their sales outside the U.S. and Canada.

Chapter 2: Mexico, the land of opportunity

Mexico was the natural choice. An untapped market of more than 100 million people, with more than 21 million packed into the capital city region; this dense population means lots of cars and congestion, and in the world of parking lot safety technology, that equates to opportunity. But it was difficult to find Mexican distributors with enough credit to purchase GNR’s products in advance. And as a small company, they could not afford to ship $100,000 worth of freight without being paid in advance.

Montreal's GNR Technologies has invested in the Mexican market

Montreal’s GNR Technologies has invested in the Mexican market

So when one particular distributor did show promise, GNR engaged Export Development Canada (EDC) to insure their receivables. However, one year into the relationship the distributor ran into financial trouble and could no longer pay for his accounts.

With the accounts receivable insurance in place, GNR was able to collect their lost revenue from EDC, protecting their bottom line from a major hit. In the meantime, GNR had built a number of strong business relationships while doing business with the distributor, and were able to leverage their new ties to really kick-start growth in the area.

In 2007 they rented a 5,000 foot warehouse near Mexico City and hired three local employees. Soon GNR was moving some production equipment from Montreal to Mexico in order to meet increasing demand in Latin America.

Chapter 3: From rubber to radar signs, and beyond

Fast forward to 2015 and the warehouse has been replaced by a 25,000 foot production facility (which is already at capacity) that fills orders for Mexico, South America, Europe and the U.S. GNR Mexico is now an official foreign affiliate of the Canadian parent and accounts for 30 per cent of overall production. Growth has been such that EDC provided the affiliate with a $750,000 loan in 2014 to help with their continued expansion.

“EDC’s insurance allowed us to explore the Mexican market and eventually succeed in that market, enough so to make a production facility viable,” said Masson. “The profits from our increased sales came back to Canada and we were able to invest in more engineers to develop more proprietary products. We’ve gone from one engineer working on rubber products to 15, most of which are now focused on the growing electronics side of our business.”

Masson is referring to the radar speed signs that GNR now builds as part of their municipal line of products, along with elongated speed humps and “table” humps. These “traffic-calming” measures are used for sections of municipal streets that have high volumes of pedestrian traffic, such as school zones.

The plan for GNR moving forward is to continue developing new product lines. They would also like to bottle the success they had in Mexico and use the same formula to expand operations into South America.

“GNR is essentially a case study on how to grow your business through exports and foreign investment,” says Luis Torres, EDC Account Manager for GNR. “Innovate, diversify, manage risk, invest and reinvest – all the elements are there for a great corporate coming-of-age-story.”

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