No opportunity too tall for Moncton company
As a small company in Atlantic Canada that makes specialized products for use in manufacturing, MASITEK Instruments Inc., needs to muster all the resources that it can in order to get ahead in the world.
In five years the Moncton-based firm has done just that, finding a niche for itself in the giant food, beverage and pharmaceutical industries. From its global business development strategy to its worldwide partners, and with the assistance of the Canadian Trade Commissioner Service (TCS), MASITEK has already expanded to 28 countries and counting.
“The TCS makes us look bigger than we are,” says Tracy Clinch, president and CEO of MASITEK. “When you're dealing with companies like Nestle, McCain, Carlsberg and Unilever, it helps to have a larger presence.”
The company was started in 2010 with funding from the Technology Venture Corporation, a venture capital group based in Moncton. MASITEK’s patented technology uses replicas of items handled in production lines that are equipped with sensors to determine the cause of any rough handling they receive from machinery. This maximizes efficiencies and improves the quality of the automated processing of fragile agricultural goods, for example. There are also sensor systems for bottling, canning and packaging food products and for use in pharmaceutical manufacturing.
The company’s state-of-the-art, real-time wireless detection and reporting technologies are designed to immediately identify and quantify damage to goods in production and distribution, Clinch says. The customized replica devices can be placed anywhere on the line without an interruption or shut-down, moving through the handling process exactly like the regular product does. They mimic movements and gather data on what is experienced throughout the supply chain, such as the impact, pressure and vertical load on the items.
The data is reported in real time to a client portal and can be monitored on a computer from anywhere in the world. This allows customers to instantly take corrective actions and then validate whether they worked. The data is also stored for later analysis and reporting.
Clinch says that the innovative technology helps reduce plant downtime, enhance product integrity and increase a company’s productivity and profits. MASITEK today has made more than 300 different sensor systems for clients all over the world, including massive entities such as AB InBev, the global brewing company, and Diageo, a British multinational alcoholic beverages company.
Some 95 percent of MASITEK’s sales are outside of Canada, and it has 15 partner agents in strategic locations around the world, Clinch says. There are sensor systems for handling eggs, potatoes and other fruits and vegetables, for capping and sealing machines, to reduce glass breakage and damage to cans and to limit scuffing, label-tearing and other problems on production lines.
An important element of MASITEK’s international sales, given its size and location, has been the involvement of the TCS, Clinch says, starting with trade commissioners in the Atlantic region and extending to many global markets.
She says the free service helps introduce the company to “industry leaders”, sets up meetings with potential customers and partners and helps MASITEK follow up on foreign sales. Clinch notes that this has been instrumental in places such as Mexico, Brazil, India and Germany.
“It’s beneficial for us to have multiple people speaking on our behalf. We need to get as many qualified leads as we can before going into an area,” she says, noting that other organizations such as the Atlantic Canada Opportunities Agency, Opportunities NB and the National Research Council have also been helpful as MASITEK develops its strategy, plans markets and looks for additional customers in areas.
“Most of the time it’s a collaboration,” she says. “When making the transition from ‘start up’ to full commercialization, a company like ours needs the services of the TCS in regions to ensure that every dollar spent is maximized in-market, to meet the right people who have the ability to make the purchasing decision.”
Charles Gaudet, a trade commissioner who works in the Atlantic region, says that MASITEK is making all the right moves, especially in using the resources available to it and diversifying into unique products and markets. Touching base with the TCS to learn about markets and meet qualified contacts there is key, he says.
Trade commissioners abroad can help companies build and deepen relationships, increase their visibility and become more aware of what’s happening in the market. “These people are there to work for you,” he says, noting that the TCS in Canada helps companies make sure that they are ready and have the resources and plans to be successful.
MASITEK has been successful in winning contracts with large companies because “it has the technology you need in these industries,” says Gaudet.
It’s critical to have a strong business development plan and strategy in place, he says, “or you're going to be spending a lot of time and resources and it’s going to take longer to get results.” As well as generating sales, think of the future and stay on the leading edge of the technology, he adds. “This is a global market now; you can be successful doing business abroad from the start.”
Clinch says that strategies to increase sales in international markets have included cold-calling and attending trade shows, as well as “organic growth,” where it leverages relationships with existing customers and others close to them. “We use the success of the product to generate additional sales.”
The sensor systems are affordable compared with many other equipment purchases, Clinch says. Companies typically see a return on their investment in three to six months, through reduced down-time and lower breakage levels. For example, an egg-producer in Europe with multiple hatcheries saw a 10 percent reduction in its breakage rates, while a community of potato farmers in Washington State saved $500,000 in losses from potato bruising. “That’s a lot of money,” Clinch says.
The company has focused its efforts on zones with a high level of manufacturing, where it can put together “clusters” of customers. Europe is particularly a “natural fit,” Clinch says, with its emphasis on efficiency, increasing speed and the “light-weighting” of glass containers. This reduces costs but raises concerns about compromising safety, as well as the quality and integrity of the process and final product.
One rather ironic problem for MASITEK is the uniqueness of its technology, Clinch allows. “It’s hard to believe it’s going to do everything you say it’s going to do.” This means that potential customers often need to “touch” and see the systems in action, which MASITEK tries to arrange in areas where it already has business. “We need to get the product into the hands of everyone who wants to try it.”
Given how labour-intensive and costly it can be to do demos, the company looks for a local partner or customer with an aptitude for the product to teach others about it. MASITEK attends a number of trade shows, especially those where it can find a company close by to show off its technology.
New markets are being explored and new products are planned for the bottling and canning industries, says Clinch. The company especially consults with existing customers to develop “new verticals for the technology.”
She advises up-and-coming companies such as hers to stick to their core competencies and “avoid chasing squirrels,” which means looking far beyond their typical business lines for tempting opportunities. “You want the revenue and you want the business, but if you take your eyes off of where you want to get and you chase squirrels, you can get thrown off track very easily. Sometimes you never get back to what you're trying to achieve.”
It’s important to “over-deliver on the technology” and maintain strong processes, she says, “or when your growth comes, they will be harder to put in place while you are ramping up production.”
She says her best advice is to spend time accessing the many services available for Canadian companies looking to do business abroad, such as the TCS. “I have had the chance to work in many markets, and Canada does a better job of supporting business development in key priority sectors than many other countries,” she adds. “There are many different levels of support here to help you be successful.”
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