Makeup and pet food: Two of Canada's hidden export success stories

Canada a world-class exporter of cosmetics, pet food, synthetic rubber, inorganic chemicals and photonic devices

OTTAWA, May 28, 2014 /CNW/ - Canada's overall trade growth in recent years has been less than stellar in sectors other than primary products, but a new Conference Board of Canada report reveals some hidden success stories and the factors behind them.

"The common perception is that Canada only does well at exporting natural resources. Very few people think of Canada as being a global player in the cosmetics industry or being competitive at manufacturing and exporting high-tech equipment or chemicals," said Kristelle Audet, Economist, Canadian Industrial Outlook. "However, they are among some of Canada's hidden export success stories - it comes down to creating innovative products for niche markets."

HIGHLIGHTS

• Beyond primary products, Canada's export success in markets other than United States rests on the shoulders of a small number of companies.
  
• A key factor in achieving global success is the ability to develop and sell innovative products for niche markets.
  
• Canada is already a world-class exporter of cosmetics, pet food, photonic devices, synthetic rubber and inorganic chemicals.

The report, Canada's Hidden Success Stories: Competing Globally, identifies five little-known products from the non-primary sector for which Canada is globally competitive and assesses the factors behind their success. To identify these products, five economic criteria were applied to more than 1,000 different products that Canada exports. The criteria set minimum thresholds for total value of exports, export growth (for both Canadian and global trade), share of exports going to the United States, and type of products. The success stories involved the following products:

• Cosmetics - Canada is the world's tenth largest exporter of cosmetic products, accounting for three per cent of global cosmetics trade. Our competiveness at exporting cosmetics rests on our proximity to the U.S. and on Canadian companies' ability to establish themselves at an early stage in fast-growth markets.
• Pet food - Canadian exports account for 3.5 per cent of global pet food trade, making us the world's ninth-largest exporter. As in cosmetics, our competitiveness in pet food stems from our proximity to the U.S. market, and manufacturers' success at exporting premium brands to emerging markets. Another key factor behind Canadian pet food manufacturers' competitiveness in foreign markets is the "Made in Canada" advantage. Canada is globally recognized for producing high-quality food products in clean facilities.
• Photonic devices - Canada is the world's tenth largest exporter of photonic devices. Photonic devices include products such as imaging and machine vision systems, 3-D scanners, and light detection and ranging mapping and imaging systems. Our global competitiveness in this industry flows from a large concentration of interconnected organizations (industry clusters) located in Central Canada, as well as an ability to bring highly specialized and innovative products to market.
• Inorganic chemicals - Canada is the world's largest exporter of sodium chlorate, a chemical used as a bleaching agent in the pulp industry. It accounts for 98 per cent of Canadian exports of inorganic chemicals and 75 per cent of global trade for that product. Our global competitiveness at exporting sodium chlorate rests on low electricity costs, ready access to fresh water supplies, and on our proximity to some of the world's largest pulp manufacturing plants, providing us with an undisputable edge in the North American market.
• Synthetic rubber - 80 per cent of Canadian exports of synthetic rubber consist of butyl rubber, a key ingredient in making tires. Canada is the world's fifth largest exporter of butyl rubber, accounting for almost 15 per cent of global trade. Exports of butyl rubber come from a single plant in Sarnia, Ontario and are supported by the petro-chemical industrial cluster located in the area and our proximity to the U.S. market. However, our global competiveness is currently being challenged by other countries, both in the North American and Asian markets.

Although these five globally competitive products are diverse, they share some important similarities. For each of the five categories examined, successful sales to countries other than United States was due to a small number of companies. These companies generally built their success on one or more of the following factors:

• Proximity to key suppliers or customers
• Benefiting from the presence of an industry cluster
• Ability to develop and market innovative products and establish an early presence in fast-growth markets

The report was published by the Conference Board's Global Commerce Centre. The Centre provides evidence-based tools to help companies and governments respond successfully to the trends reshaping the global business environment.

Image with caption: "Key Statistics for Five of Canada's Hidden Export Success Stories. (CNW Group/Conference Board of Canada)". Image available at: http://photos.newswire.ca/images/download/20140528_C7219_PHOTO_EN_40823.jpg

SOURCE: Conference Board of Canada

Yvonne Squires, Media Relations, Tel.: [phone] ext. 221
E-mail: [email protected]