When compressed natural gas (CNG) retailers gathered in Billings, Oklahoma earlier this year to celebrate the completion of a five-year project to establish at least one CNG refueling station every 100 miles along Oklahoma interstate highways, a Canadian exporter shared in the achievement.
Winnipeg-based Kraus Global Ltd. provided CNG refueling dispensers that helped Oklahoma achieve the distinction of having more CNG stations per capita than any other state in the U.S. Part of state governor Mary Fallin’s comprehensive energy plan, the project is seen as a significant milestone towards the use of cleaner energy throughout the U.S.
Kraus Global’s participation in the Oklahoma project was not a surprise. With more than 6,000 dispensers in operation worldwide and 30 years of experience in the alternative fueling industry, the company has built its reputation on quality products, reliability and a commitment to finding innovative solutions that meet each customer’s unique need, says President and CEO Ossama AbouZeid.
The company’s prospects for continued success were bolstered last year when Toronto-based private equity firm PRIVEQ Capital Funds led a management buy-out of Kraus Global, investing $6.2-million in common equity.
Kraus Global’s history goes back 40 years and includes pioneering the development of electronic self-serve technology and electronic motor fuel dispensing for the petroleum industry and the delivery of turn-key gas stations.
Today, Kraus Global’s focus is on manufacturing smaller, specialized electronic equipment and technologies for the industry with a particular emphasis on the alternative fuels market including the development of CNG and hydrogen dispensing systems and liquefied petroleum gas dispensing solutions.
“We recognized that there would be a demand to move toward cleaner fuels, particularly in the U.S. and started developing the dispensing technology that would be needed as the industry expanded,” says AbouZeid.
At the same time, retailers in Asia were looking for simple, easy-to-use technology that would be compatible with their existing dispensers. Kraus Global’s solution: sell its proprietary software that controls the dispensers.
“In essence, it’s the brain of the dispenser,” he adds. “We don’t sell many dispensers in that market, but there is demand for our unique IP.”
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AbouZeid says Kraus Global has three core specialties that underpin its export success:
- A strong focus on the design and engineering of world-class dispensing equipment;
- An intense dedication to the creation and development of leading-edge technology for core CNG, LPG, hydrogen, and petroleum components; and
- Flexibility to accommodate requests for customized dispensing solutions.
The limited size of the Canadian market means that 90 per cent of the company’s products are exported, of which 80 per cent goes to customers in the U.S. However, the trend towards alternative fuels is gathering pace elsewhere as well.
Kraus Global has customers in several Asian and European countries including Thailand, Pakistan, China, Bangladesh, South Korea, Italy, Belgium, Russia and Germany. AbouZeid hopes that easing of sanctions against Iran will reopen what was once an important market for the company.
As an exporter, the company faces many of the same challenges confronting other Canadian firms doing business around the world: opening lines of communications with potential customers, gaining their confidence, establishing working relationships and getting through to decision-makers. Kraus Global also faces the added hurdle of having its technology certified in each market.
“Each country has its own regulations and certification standards and we have to meet them all before our products can be used,” says AbouZeid. “If we claim to be dispensing a gallon of fuel, someone has to certify that we are doing so and in a safe manner. Certification is our biggest challenge because no-one will buy from us unless they know our product is officially certified in their country.”
He sees the U.S. as the company’s best opportunity for growth.
“The alternative fuels industry is still in its infancy, but there is a strong commitment to cleaner fuels driven by the desire to have cleaner cities,” adds AbouZeid. “The U.S. is a good market for our product.”
He says one of the biggest changes he has seen since Kraus Global started exporting is in the knowledge and sophistication of customers.
“For us, the days of simply manufacturing and shipping a complete product are long gone,” says AbouZeid. “Instead of exporting product, we’re exporting solutions. We determine exactly what the customer needs and then work out how best to engineer our product to meet that need. Our expertise lies in our ability to create customized and innovative solutions and our commitment to providing exceptional customer service, wherever our customer might be.”