STEP Manufacturing Team AmCon Expo & Texas Business Development Mission Contract Manufacturing October 5 9, 2015 Dallas & Houston, Texas USA
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1 STEP Manufacturing Team AmCon Expo & Texas Business Development Mission Contract Manufacturing October 5 9, 2015 Dallas & Houston, Texas USA TRIP REPORT
2 Executive Summary Saskatchewan Trade & Export Partnership (STEP) coordinated a Business Development Mission to Dallas & Houston in October The purpose was to expose contract manufacturers from Western Canada to potential export opportunities in the oil/gas, power generation, construction, transportation, aerospace and defense sectors in the Southern US. This trip involved a group exhibit at the AmConDesign & Contract Manufacturing Expo in Dallas and extended business programming in both Dallas and Houston which was supported by the Consulate of Canada Dallas & Houston Offices and in market strategic partner. The mission was executed in three parts: Part 1: Welcome to Texas Business Briefing Session October 5, 2015 in Dallas, TX Primary Industry Focus: Aerospace, Defense& Transportation Activities: Information Session on the Texas Economy, Sales Seminar (Working with a Manufacturers Rep), Group Tours Part 2: AmCon Design & Contract Manufacturing Expo October 6 7, 2015 in Dallas (Plano), TX Activities: Trade Show and Canada Networking Reception Part 3: Extended Business Outreach Program October 8 9, 2015 in Houston, TX Industry Focus: Oil/Gas, Power Generation, Construction & Transportation Activities: Update on the Oil/Gas Sector, Information Session on Business Opportunities in Houston, Business Meetings Overall, the business mission was a success. It was a good opportunity to expose contract manufacturers from Western Canada to export opportunities in the massive Texas market. The population of Texas is 95% of Canada s population, and their GDP is 92% of Canada s GDP. The results of the mission are summarized as follows: Quantitative Results # of Companies Participating: 3 Sales Contacts: 42 Trade Leads: 24 Total Estimated Value of Export Sales (Immediate): $500,000 Total Estimated Value of Export Sales (12 Months): $1.0 million Estimated Jobs Created: 3 Please Note: Estimated jobs created is based on 1 new full time job for each $500,000 of export sales.
3 Mission Details Mission Title: AmCon Expo & Texas Business Development Mission Date: October 5 9, 2015 Dallas & Houston, Texas Markets: Southern USA Sector Focus: Oil/Gas, Power Generation, Construction, Transportation, Aerospace, Defense STEP Staff: Stacey Sauer, Trade Specialist Manufacturing Project Background & Objectives Project Background: In Western Canada there is a relatively strong group of members involved in contract and OEM manufacturing. It was felt the combination of tradeshow and extended business-to-business programming would be a good way to service these contract manufacturers from Western Canada. It was decided to target the Dallas / Houston market because of the AmCon show and the focus on manufacturing, oil/gas, power generation, construction, transportation, aerospace and defense. About AmCon: AmCon has been assisting contract manufacturers to find customers throughout Texas for over 25 years. The show is designed to reach OEM s from Northern Texas, Oklahoma and Louisiana. It is highly targeted with 80 exhibitors and 800 decision makers looking for suppliers of outsourced parts, components and services. AmCon exhibitors are job shops and contract manufacturers that provide custom metal, plastic, rubber and electronic parts/finishing services to OEM s. The majority of AmCon attendees are top level purchasing, engineering and production managers that are directly involved in buying contract manufacturing and job shop services. In the past, the following OEM s sent engineers and buyers to the Dallas show Atlas Copco, Baker Hughes, Boeing, Halliburton, Lockheed Martin, Schlumberger, Siemens. About Dallas: Dallas is the 9 th largest city and 4 th largest metropolitan area in the US with a population of 1.2 million. The Dallas area thrives in aerospace, defense, telecommunications and banking. There are 18 Fortune 500 companies located in Dallas including Exxon Mobil, Southwest Airlines and Texas Instruments. About Houston: Houston is the largest city in Texas, and the 4 th largest city in the US with a population of 2.2 million. Houston is the US energy capital and the global center for virtually every segment of the oil/gas industry including exploration, production, transmission, marketing, supply and technology. There are 26 Fortune 500 companies located in the Houston region including Schlumberger, NOV, Shell Oil Company, BP America and Baker Hughes Incorporated. Why Texas? Why Now? One of the most diverse economies in the US including advanced manufacturing, tech, aerospace, telecom, military, infrastructure, medical, mining and oil/gas. Pro business and pro growth policies (low taxes, stable regulations). Texas has been a bright spot (job creation, low unemployment) in an otherwise dim U.S. economy. A highly diversified economy with pro-growth policies will potentially shelter the economy from falling oil prices.
4 Western Canadian companies will need to focus on how their unique product/technology/service can save their customer money. This becomes their competitive advantage which is crucial during these challenging financial times. The falling CAD dollar makes Canadian products/services more financially appealing to US customers. Export sales are about establishing long term relationships and what better way to do that than to visit new and existing customers in person. Objectives: The key objective was to plan, organize and implement a business development mission to AmCon along with extended business programming in Dallas / Houston with the goal to assist Western Canadian contract manufacturers in finding OEM and other customers throughout the Southern US. The main deliverables would be the number of companies participating, trade leads generated, expected export sales and full time jobs created. Agenda October 5, 2015 Monday Dallas, Texas Time 7:00AM 7:30AM Meeting/Event/Activity Group Breakfast Meeting Welcome to Texas Consulate General of Canada Dallas (Confirmed) China Berry Room Southfork Hotel 1600 North Central Expressway Country Continental Breakfast will be served. Welcome to Dallas Greetings by: David Weiner, Senior Trade Commissioner Consulate General of Canada Dallas Company Introductions and Profiles Each SK & MB company will provide a brief overview of their company and their objectives for the trip. 7:30AM 8:00AM Group Meeting Market Briefing Session (Confirmed) China Berry Room Southfork Hotel Texas Market Overview (High Level) Presented by: David Weiner, Senior Trade Commissioner Consulate General of Canada Dallas Overview: About Texas (Population, Demographics, Geography, Economy, Key Industries, About TC Service)
5 8:00AM 9:00AM Group Meeting Sales Information Session (Confirmed) China Berry Room Southfork Hotel Working with a Manufacturers Rep Presented by: Metal Working Solutions Overview: This information session is presenting an outsourced sales representative/agency option for our manufacturers to consider. The guest speaker will discuss how to work with a manufacturers rep, advantages/disadvantages, selecting the right rep, compensation rates, client prospecting, etc. 9:00AM 10:00AM 10:00AM 11:30AM Group Transportation to Denton, TX (40 miles) Group Meeting & Tour Mayday Manufacturing (Confirmed) Mayday Manufacturing Facility 3100 Jim Christal Road Denton, TX Overview: Mayday Manufacturing is in the aerospace industry but they are also an industrial machine company. They will discuss their experience in being a lower Tier 3 / Tier 4 supplier. 1:00PM 2:30PM Group Meeting & Tour Peterbilt Trucks (Confirmed) 3200 Airport Road (Manufacturing Facility) Denton, TX Overview: The objective of this group meeting would be to learn about their supply chain system, understand their supplier requirements and tour their facilities to gain insight into their operations. Peterbilt will discuss their experience in being a Tier 1 supplier. 2:30PM 3:30PM 3:30PM 6:00PM Group Transportation to Plano (40 miles) AmCon Setup Hours Plano Centre Booth 400, 402, 403, E Spring Creek Pkwy
6 October 6, 2015 Tuesday Dallas, Texas Time 7:30AM 9:30AM 9:30AM 3:30PM 3:30PM 5:00PM Meeting/Event/Activity AmCon Final Setup Hours Plano Centre Booth 400, 402, 403, E Spring Creek Pkwy AmCon Tradeshow Hours Day One Plano Centre Booth 400, 402, 403, E Spring Creek Pkwy Canada Reception (Confirmed) Plano Centre Spring Glade Room 2000 E Spring Creek Pkwy Attendees of AmCon were invited to this reception with our Saskatchewan contract manufacturers. October 7, 2015 Wednesday Dallas to Houston, Texas Time 9:30AM 3:00PM 3:00PM 8:00PM 5:00PM Meeting/Event/Activity AmCon Tradeshow Hours Day Two Plano Centre Booth 400, 402, 403, E Spring Creek Pkwy AmCon Take Down Hours Plano Centre Booth 400, 402, 403, 404 Fly/Drive from Dallas to Houston October 8, 2015 Thursday Houston, Texas Time 8:30AM 9:30AM Meeting/Event/Activity Group Meeting Sales Information Session (Confirmed) Working with a Manufacturers Rep Presented by: Galtway Industries
7 Overview:Galtway Industries is a manufacturer s representative of world class manufacturers providing solutions for Top Tier OEMs. With a specialty in open die forgings and turn key machining solutions to the Oil and Gas Industry, our experience rises to the challenge of today s manufacturing environment. Whether you are manufacturing Fluid End Blocks in the Hydraulic Fracturing Industry, or Blow Out Preventers in the Sub Sea Market, our supply chain solutions are built around providing you with the tools you need to meet and exceed your goals. Galtway Industries has offices in the Barnett Shale of Fort Worth and offices directly in Houston serving the entire SW USA. 10:30AM 12:00PM Pre-Scheduled One-on-One Meetings (Day #1) Individual meeting schedule in Houston. At the office/facility of the Houston company. 12:00PM 1:00PM 1:00PM 5:00PM Lunch On Your Own Pre-Scheduled One-on-One Meetings (Day #1 Cont d) Individual meeting schedule in Houston. At the office/facility of the Houston company. October 9, 2015 Friday Houston to Saskatoon/Regina, Saskatchewan Time Meeting/Event/Activity 8:00AM 9:00AM Pre-Scheduled One-on-One Meetings (Day #2) Individual meeting schedule in Houston. At the office/facility of the Houston company. 10:00AM 10:30AM Group Meeting National Oilwell Varco (NOV) (Confirmed) Richmond Avenue #100 Houston, TX About NOV: Every day, the oil and gas industry s best minds put more than 150 years of experience to work to help our customers achieve lasting success. We have the people, capabilities and vision to serve the needs of a challenging and evolving industry. Throughout every region in the world, across every area of drilling and production, our family of companies provides the technical expertise, advanced equipment and operational support necessary for success now and in the future.
8 10:30AM 11:30AM 11:30AM 12:30PM Group Transportation to Consulate General of Canada Houston Group Meeting Industry Briefing Session (Confirmed) Meeting Room Consulate General of Canada Houston Suite # San Felipe Street Houston, TX Oil & Gas Industry Overview Presented by: Kurt Abraham, World Oil Overview: This information session is presenting an update on the oil/gas industry in Southern US. The guest speaker will discuss state of the industry, future trends, key players, supplier capabilities, etc. 3:30PM Depart Houston Results STEP coordinated the business development mission to Dallas & Houston, TX from October 5 9, The focus of this mission was to develop and expand export business in the Southern US and to increase the sale of contract manufactured goods/services to the US market. STEP partnered with the Consulate of Canada Dallas & Houston and FasTrack Global Expansion Solutions, an in market strategic partner, to organize a comprehensive business focused program for the Saskatchewan delegation. The first part of the mission was the full day Welcome to Texas Business Briefing Session. This was a good way to kick off the week in Texas. It provided a strong foundation/understanding of the economy, market conditions and key sectors in Texas. With the exception of the oil/gas sector, the State of Texas is booming. Their economy is strong as you see significant infrastructure, road and building construction happening, especially in Dallas. The population of Texas is 95% of Canada s population, and their GDP is 92% of Canada s GDP. In Texas, there is no state personal or corporate income tax. Currently the value of Saskatchewan exports to Texas is $868 million, and is the 9 th largest US State trading partner. The largest Saskatchewan exports are oil/gas (80%) and canola oil (12%). The key priority sectors in Texas (as identified by the Consulate General of Canada Texas) are aerospace, defense, energy, agriculture food products, IT, communications and Clean Tech. It was felt there was an opportunity for expanded exports from Saskatchewan into the State of Texas. The second part of the business mission was the Western Canada group display at the AmCon Design & Contract Manufacturing Expo. There were four (4) 10 x 10 booths of Canadian contract manufacturers plus STEP on display at AmCon. The trade show floor was full of exhibitors; however the number of attendees was very low. After speaking to long time exhibitors of the show, this was not normal. In past years, the tradeshow floor was busy with activity. It was felt the show was slower this year simply due to the downturn in the oil/gas sector. The contract manufacturers from Western Canada still felt there was value being at the show, and even though the quantity of sales leads was minimal the quality of the leads was strong. The final component of the mission was to travel to Houston for two days of business meetings primarily focused on the oil/gas sector. The group was fortunate to meet with the Chief Forecaster for World Oil magazine, and he provided an in-depth assessment on the state of the oil/gas industry in the US and Canada.
9 The countries with the largest oil production are the US, China, Canada and Russia. In 2015 World Oil is forecasting oil production (# of wells) to drop by 40% in the US and 50% in Canada. The number of oil rigs in the US has dropped 56% since September Looking at the state of Texas specifically, the number of oil wells will be down by 45% in 2015 and North Dakota will see a drop of 48%. In Texas, there have been 100,000 staff laid off in the oil sector and the lay offs are not done yet. The long term oil projects will still proceed forward however there will be no new development in oil projects right now. The three contract manufacturers from Saskatchewan participated in business to business (b2b) meetings during their time in Houston. These meetings were an opportunity to meet face to face with prominent players in the oil, gas and energy sector in Houston. There were several key messages coming from the oil/gas/energy service supply companies: They are looking to form long term relationships with reputable long standing suppliers. They are looking for ways to strengthen or diversify their product/service offering. They are hoping to come out of the downturn as stronger companies with stronger supply chain systems. They are looking to do more with less financial resources. They want to find unique solutions for their problems in their sector. Innovation, efficiency and new technology are going to be the keys to success in moving forward. Our contract manufacturers have the capacity, ability, experience and reputation to meet these newly revised expectations of their customers. At the conclusion of these b2b meetings, the contract manufacturers came away with the contact information for the procurement person responsible for machined components. They were advised to stay in contact with these procurement specialists to keep abreast of any new opportunities for them to bid on projects. The results of the business mission are summarized below: Quantitative Results # of Companies Participating: 3 Sales Contacts: 42 Trade Leads: 24 Total Estimated Value of Export Sales (Immediate): $500,000 Total Estimated Value of Export Sales (12 Months): $1.0 million Estimated Jobs Created: 3 Please Note: Estimated jobs created is based on 1 new full time job for each $500,000 of export sales. Recommendations Overall the business development mission was a success. Even though AmCon Expo was slower than expected, the quality of the leads was strong. The format of targeted business-to-business meetings worked very well for contract manufacturing companies. The Saskatchewan exporters made a number of qualified business contacts through their business-to-business meetings. Also, this mission was a good opportunity to gain an understanding of the economy in Texas, and to receive an in depth updated on the oil/gas industry in US and Canada. Another secondary benefit of the mission was that the Saskatchewan companies created a greater awareness about the Supply Chain Capacity in the province. The majority of the people the group met with had limited knowledge on Saskatchewan suppliers (including the Consulate General of Canada Dallas & Houston), their capacity and their level of expertise in working with large mining/energy companies.
10 Moving forward, there are opportunities to continue to explore new/expanded export sales into the Southern USA. I would not recommend the AmCon show again until the oil/gas sector starts to turn around. However, there are two other trade shows that were mentioned several times to the group. These are the largest oil/gas specific tradeshows in the Southern USA. OTC Offshore Technology Conference (May 2016 in Houston, Texas) LAGCOE Louisiana Gulf Coast Oil Exposition (October 2016 in Lafayette, Louisiana) A couple other industry associations that should be researched further are: IADC International Association of Drilling Contractors ( PESA Petroleum Equipment Suppliers Association ( The participants were pleased with the level of organization and support provided by STEP. They would be interested in future events targeted at the oil/gas sector in the Southern USA. Notice to Recipient: The attached information is provided by STEP on the express condition that the recipient of such information waives any and all claims of any nature whatsoever (including any claim based in negligence) that it may now or in the future have against STEP or its officers, directors, employees and agents resulting from or in any way connected with its use or reliance on such information.
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