STEP ArticlesBruce Johnstone - The Leader-Post - August 29, 2011 In August 1996, the Saskatchewan Trade and Export Partnership (STEP) was launched with a staff of 12, in 3,000 square feet of office space in Regina and a budget allocation of $2.6 million annually. Fifteen years later, STEP has grown to a staff of 32 in two offices occupying 13,000 square-feet and an annual budget allocation of about $2.9 million. During that same period, the province's export trade has exploded - from $8 billion a year in 1996 to $24.2 billion in 2010 - a three-fold increase. While STEP can't take credit for all of that growth, STEP CEO Lionel LaBelle says it didn't just happen by accident either. 'You deal with the cards that you have,'' said LaBelle in a recent interview in his Regina office. 'You deal from your strengths. 'Energy is No. 1, food is No. 2, potash is No. 3, uranium is No. 4, manufacturing is No. 5,'' he said, referring to the five major sectors in the Saskatchewan economy. 'We don't play any role in the energy business. We certainly play a role in the food business. We certainly play a role in some parts of the mining business, but not potash and uranium. In the manufacturing sector, we're absolutely engaged in every part of that.'' LaBelle, who has been CEO since 2008, likes to point out that Alberta, which operates six or seven trade offices around the globe costing about $6 million or $7 million a year, has about $12 billion in export sales outside of North America. Saskatchewan, with two STEP offices (head office in Regina and satellite office in Saskatoon) and a total operating budget of $4.5 million, has about $12 billion in export sales outside of North America. 'If you look (at export trade) outside of North America, we're almost identical to Alberta,'' LaBelle said. 'We're doing some neat things that the rest of the world is looking at.'' What the rest of the world is looking at is a government-industry organization - a public-private partnership, if you will - that actually works the way it was supposed to. When the former NDP government created STEP from the former Economic Development and Trade department, its mandate was to lever private sector expertise (through the board of directors) to use tax dollars to implement the province's export trade strategy. LaBelle said the wisdom of that vision has been vindicated by the remarkable growth and success of STEP and its members in the last 15 years. And he attributes much of that success to STEP's board of directors, which has 12 members, three of whom are senior civil servants. 'The concept of our board is a bunch of entrepreneurs that are pretty adamant about (what our mandate is, which is) 'what is it that we sell and how is it we can make those sales happen','' LaBelle said. One thing the STEP board doesn't like is spending money on fancy offices and big expense accounts. (There's a standing joke that Economic Development and Trade or EDT used to stand for Eat, Drink and Travel.) 'It's an interesting model because there are likeminded people on the board. They're very cognizant of waste in terms of spending money. We really ... try to get the best bang for the buck,'' said LaBelle, the Sedley-bor n entrepreneur, who headed the Saskatchewan Ethanol Development Council before joining STEP. The private sector board members give STEP a business focus that most government trade agencies lack. 'Other trade organizations run by governments have a scattered approach. 'We'll go here, we'll go there.' We're very specific.' LaBelle said that private sector focus is readily apparent in STEP's travel schedule. 'Our board knows clearly what our travel agenda is, based on specific market trends, whether it's by sector, by market, or by country.'' But STEP is also very nimble and can react at the top of a hat. For example, last week, STEP had a team of employees in China and a team in Australia. 'That's the nimbleness. That's the ability to say, 'we have to react, we have to go there'.'' STEP also represents companies that sell services, not just products and commodities. 'When people look at STEP ... they think we only sell widgets. People don't understand we do a lot of work on the knowledge piece.' For example, STEP has represented research and development organizations based at the two universities on numerous trade missions to foreign countries. 'We open doors for them. It's been really quite spectacular.'' One of STEP's main roles is to convince Saskatchewan companies that they can compete on a global level. 'People don't believe they can compete in the global market, until we start working them and introducing them to other opportunities. Then all of the sudden, they realize, 'Holy cow, we have products and services that are really quite remarkable'.' Of course, that means lots of travel to exotic locales like Kazakhstan and Mongolia. But STEP also uses new technology, like Internet 'webinars,' to reach out to potential customers around the world. 'We're doing a lot of both. My second line item is travel, but we're doing a lot with new technology as well.'' But STEP doesn't just take Saskatchewan companies to the world; it brings the world to Saskatchewan. 'We spend a great deal of time in the April, May, June, July, August period bringing people here. We pay half their airline tickets and we qualify customers.'' While an individual airline ticket might cost STEP $1,000 or more, the sales they generate can be in the tens of millions of dollars, LaBelle said. It's all part of the elaborate mating ritual between Saskatchewan companies and foreign buyers, with STEP playing the go between, the matchmaker. 'It usually works this way: We go there, we source the opportunity, we find the client, we give them the brochures and tell them the story ... Then, with any luck, they'll follow us or have a business colleague that's worked with us. If they do, then deals will flow from that. If not, we have to get them here, so that's what we do. We get them here, looking at the buildings, looking at the facilities, so they understand the size of these companies and their capabilities.'' It's an approach that seems to be working, based on the success of recent trade missions. 'The India trip (accompanied by Premier Brad Wall earlier this year) is a good example. Immediately following the India trip, we're aware of at least half a dozen companies that flew back in first six weeks to follow up with transactions.'' The numbers back up STEP's success, despite recent turmoil in the global economy. 'Our goal last year was 2,300 qualified sales leads. We delivered 4,200 qualified trade leads. We got 200,000 hits a day on our web page. We used to get 5,000 hits a day.'' 'We have been getting some exposure that has been beneficial for all of Saskatchewan.'' Bruce Johnstone - The Leader-Post - February 1, 2010 Unofficially, STEP's job is to bring Saskatchewan to the world -- and the world to Saskatchewan. The government-industry partnership, formed in 1996 from elements of the former Economic Development and Trade department, was designed to get more private-sector input and involvement in the design and delivery of trade promotion programs for exporters. The board of directors of STEP is made up almost entirely of exporters, while the staff consists generally of young professional types with a keen interest in business and international trade. Aside from about $3 million in annual funding from the provincial government, STEP generates its own revenues from memberships, operating overseas projects for the UN and CIDA, hosting conferences, and holding seminars, among other activities. With a small staff of about 30, STEP covers the world for its 400 or so members -- attending trade shows, representing or accompanying companies on trade missions, arranging meetings with buyers and hosting events in Saskatchewan for STEP members and their customers. Not surprisingly, this is one busy group of people. In fact, it's hard, if not impossible, to gather them up in one place at any given point in time. The closest thing is STEP's regular staff meeting, held at STEP's Regina head office at 1801 Hamilton St. and its Saskatoon office on 402-21st St. E. STEP president and CEO Lionel LaBelle recently invited the Leader-Post to sit in on one of these meetings, which took place Jan. 27. The following is a brief account of that meeting, just to give readers an idea of the wide range of activities and far-flung corners of the world in which STEP staff are active. LaBelle opened the meeting by introducing two guests from the Leader-Post, then turned the floor over to Brad Michnik, executive director of trade development for STEP, who spoke from the Saskatoon office via videoconference. Michnik explained that trade development is 'the unit within STEP that does the market intelligence work ... as well as organizes an aggressive program of trade missions and the trade activities of incoming buyers who come into the province to source goods and services.'' For example, Michnik said, he was meeting with two STEP-sponsored Saskatchewan delegates of an upcoming Junior Team Canada trade mission to Singapore and Malaysia. 'We're going to charge them with some specific responsibilities to help them develop their international business skills,'' Michnik said. 'It will pertain to doing some market intelligence work in a specific sector.'' Michnik is also involved in organizing a seminar with the Canada-China Business Council in Saskatoon on March 2 on the subject of doing business in China. Also in early March, Michnik is going to meet with other export trade organizations, like Nova Scotia Business Inc., to discuss innovative ways of promoting export trade. 'It's really a best-practices initiative in the sense that we want to learn from people doing similar work.'' Michnik said he and another STEP trade specialist, Yi Zeng, are working on a STEP trade mission to China and Mongolia in early April. 'We're going to start digging a little deeper into that market to see what opportunities are there for agricultural equipment.'' STEP members on the trade mission will also be attending AGMET, a large agricultural trade show in Beijing. 'We think there are some pretty good opportunities in China.'' Angela Wojcichowsky, international projects officer, outlined some of the projects going on in STEP's export services division. 'We just got in an expression of interest for a project in Tajikistan (a mountainous, landlocked country in Central Asia) with the Asian Development Bank. It's a rural development project that is almost a replication of the FARM project (in Ukraine).' STEP is joining forces with a Swedish consulting firm and a local Tajikistan company to bid on the project, she said. 'That (expression of interest) went in this morning at about four o'clock, because we had to have it translated into Russian,'' Wojcichowsky added. STEP staff will also be attending a trade mission in Manila, Philippines, sponsored by the Asian Development Bank, which funds development projects in Central Asia. 'We're looking at meeting with people from Tajikistan, Mongolia and Kazakhstan,'' she said. Then it's on to Vietnam and Bangladesh for more meetings. Finally, Wojcichowsky will journey to Kiev, Ukraine, in March to close up the STEP-managed FARM project. The Facility for Agriculture Reform and Modernization (FARM) project, which was supported by the federal government, along with the provinces of Saskatchewan, Alberta and Manitoba, is 'one of the largest and most comprehensive agricultural projects funded by CIDA in Ukraine.'' Since 2003, FARM has trained more than 40,000 people and improved farming practices on more than 1,000 farms in Ukraine. 'It was 100-per-cent CIDA-funded project, but the last two years, it was cost-shared with the Ukrainian government,'' LaBelle said. 'Now we're stepping back.' Blair Hudyma, programs and training specialist, said there are five applications being processed under the MAP program, which helps STEP members enter new export markets. 'We call it MAP, which stands for Market Access Program. We're going to take Saskatchewan companies to specific markets and we're going to help share their travel costs,'' LaBelle said. 'We think it's time to be proactive in those markets.'' In addition, five applications are also in for the Agri-Value Marketing Internship program, which provides funding for recent graduates or grad students to do market research for STEP members. Forum for International Trade Training (FITT) courses are also being offered at the STEP offices for international business professionals, he added. 'We do a lot of international (trade) training for people, whether they're government people or in business,'' LaBelle said. 'FITT training happens in this room, both in Regina and Saskatoon.'' Rob Ziola, director of trade development for manufacturing, said his team works with Saskatchewan manufacturers, such as metal fabricators, ag equipment manufacturers, building product companies, to find new markets. In January, Ziola attended the Ag Connect Expo, sponsored by the Association of Equipment Manufacturers, in Orlando, Fla., along with about a dozen STEP member companies. 'Being the first year, it was modest in terms of attendance. The results were not as good as we hoped, but some companies got some leads,'' he said. Ziola said the large Mongolian presence at the Ag Connect show confirms STEP is on the 'right track'' in terms of targeting Mongolia and China as promising markets for Saskatchewan exporters. 'These are two areas that have had growth ... and there are good opportunities there for equipment sales.'' Following the meeting, LaBelle said STEP is billed as a 'trade-promotion agency,'' but that doesn't adequately describe what STEP actually does, referring to the 2,600 qualified leads generated, 252 market intelligence reports produced, and 96-per-cent member satisfaction STEP achieved last year. 'What we do is trade facilitation. We literally introduce companies to opportunities. We show them how to do the deal, then get the hell out of the way. It's dramatically different than what governments do. 'Governments promote. We facilitate.''
Jeannie Armstrong - Trade & Commerce Magazine - October 2008 “In our province, exports generate over 70 per cent of GDP, a dramatically higher rate than other provinces. But in our economy it’s everything! Literally every person in our province directly benefits from our province’s export potential.” Saskatchewan’s export market continues to outperform all other provinces in the country. During the first eight months of 2008, the value of Saskatchewan’s international exports increased by 54.3 per cent, to $20.5 billion, compared to the same time period in 2007. The national average paled in comparison, at 4.9 per cent, over the same time period. In August 2008 alone, the value of Saskatchewan exports skyrocketed by 104 per cent, the highest increase ever recorded. The whopping jump was attributed to increased exports of petroleum products, agriculture commodities and minerals, in particular, potash products. LaBelle anticipates Saskatchewan will be very close to $30 billion in export sales in 2008, close to $10 billion higher than 2007’s record-breaking total. He attributes the strength of Saskatchewan’s export economy to its diversity. “Some of the phenomenal increases are due to increasing commodity prices, in the energy, mining and agriculture sectors. But collectively, all of our other industries are doing exceptionally well,” says LaBelle. “Manufacturing is up 31 per cent over last year. Everybody said when the Canadian dollar was on par with the U.S. dollar, the manufacturing sector would really be hurt. The reality is, it hasn’t been hurt.” Short-line farm equipment was once the primary focus of Saskatchewan’s manufacturing sector. Now the sector has a much broader base, including the manufacture of specialized equipment for the mining and energy sectors. “What most people don’t realize is that Saskatoon is now the largest steel fabricating city west of Toronto,” says LaBelle. The province has also seen rapid expansion in the manufacture of advanced electronics and instrumentation. Equally diverse are the province’s trading partners. Saskatchewan is second to British Columbia in terms of reliance on the U.S. market. “The U.S. market is still very important to us, representing 70 per cent of our total exports, but we sell more to other countries percentage-wise than any other province,” says LaBelle. Saskatchewan’s global trading partners include China, India, Japan, the European Union, Middle East, Latin and South America. “The U.S. is only expected to have 1 to 2 per cent growth at best over the next five or six years, where economies like India and China are having double-digit growth, year after year. STEP’s strategy is to engage other markets around the globe to take up a larger volume of our business,” says LaBelle. “The global financial crisis is real and its effects on Saskatchewan are uncertain. What may be perception to some are becoming very real to many global jurisdictions. Saskatchewan on many accounts appears to be somewhat insulated but not isolated from many of the issues being discussed. The ultimate impact to our economy remains uncertain but leading economists remain optimistic in regards to Saskatchewan's future prosperity.” STEP takes a targeted approach to trade development, says LaBelle. “We’re not a large organization. We have to do things very strategically – going after very specific trade leads. For example, we just got back from the Baltic States – Estonia, Latvia and Lithuania – where we had heard about the potential demand for some of Saskatchewan’s manufactured goods. We came back with some fabulous leads that we’re very excited about.” STEP assists its exporter members to reach new markets through specially tailored services and programs. The organization provides its members with over 300 customized market intelligence reports and over 2,200 qualified trade leads annually. “At any given time, our market intelligence team has 35 to 40 market intelligence reports that they’re working on,” says LaBelle. STEP even provides Saskatchewan exporters with an innovative program of short-term, affordable financing. “The nextrade™ finance program was created in direct response to the demands of exporters who regularly faced challenges and barriers to growing their businesses outside the borders of Saskatchewan,” says LaBelle. A capital pool totaling $2.2 million has been established through operational funding from Western Economic Diversification Canada, and financed through the Ministry of Enterprise and Innovation and the Saskatchewan Ministry of Agriculture. Since nextrade™ finance began operations in November 2004, the program has successfully supported 463 export transactions for more than 40 Saskatchewan-based companies. The total volume supported through these transactions amounts to more than $20 million in export sales. In February of 2008, nextrade™ finance underwent a policy review and update, and was relaunched in June. The restructuring resulted in greater clarity and detail, says LaBelle. “To enhance the value of nextrade finance and its services, I hired two retired bankers. Both individuals bring over 50 years of combined lending experience and history working with Saskatchewan industries.” STEP itself has become a Saskatchewan exporter, through the establishment of STEP International. The organization is exporting its expertise and core strengths as international trade trainers and professional consultants to other countries around the globe. Working with international financial institutions such as the Canadian International Development Agency (CIDA) and the World Bank, STEP International bids on strategic international development opportunities, then works with a consortium of Saskatchewan firms to manage the projects. Not only do these international projects create a revenue stream for the non-profit trade organization, they help to expand STEP’s on-the-ground knowledge and expertise in emerging markets. LaBelle points out that many of tomorrow’s trade opportunities will be found in these developing economies. For example, STEP International has managed four successful initiatives in the Ukraine, beginning with a small forage seed development project in the late 1990s. Currently, STEP is overseeing the Canada-Ukraine Facility for Agriculture Reform and Modernization (FARM) Program, funded by CIDA. “This is a five-year project that was just extended for two more years. We have established 19 agriculture extension service offices throughout the Ukraine that provide information on best practices related to agricultural and rural development. We have 51 people employed there,” says LaBelle. STEP International was recently awarded a new one-year project for the United Nations, valued at $1 million, competing against many international proposals for the contract. “We are writing a very detailed manual for trade facilitations, that will help emerging economies facilitate trade in this global economy,” says LaBelle. “There are two parts to that program. The first is the development of the detailed manual. The second is a teaching component. We currently have colleagues in Malaysia who are involved in the teaching process. The document and the teaching process will be completed at the end of March 2009. “It’s a good story. Here we are, a bunch of people from Saskatchewan, drafting a document for the United Nations on how to make countries competitive in this global environment, based on our competencies regarding world trade. We feel pretty good about what we’re delivering.” |
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