To casual onlookers Ottawa-based Clearford Industries Inc. may look like it has had a facelift in recent years.<\/p>\n
To a large extent it has. Two years ago the company realized it was floundering in North America. With the recession cutting into municipal budgets and slowing development, few governments or developers were eager to spend the sizeable infrastructure costs to upgrade to a Small Bore Sewer (SBS) system \u2013 the staple of Clearford operations.<\/p>\n
The company switched to focus exclusively on international markets and is now courting municipalities and private developers from Beijing to Peru.<\/p>\n
But internationally demand continued to be high. The 2011 Canadian Clean Technology Industry Report by Analytica Advisors pegged the global market demand for clean-tech at $1 trillion, set to grow to $3 trillion by 2020. Much of that demand is in emerging countries with rapid population growth and scarce water resources. Clearford\u2019s SBS technology is less costly and less disruptive than traditional sewer systems, creates green energy and uses less water to treat and transport waste, putting it in an attractive position for regions like China\u2019s underdeveloped inland and India\u2019s sprawling suburbs.<\/p>\n
\u201cSo we decided to market our technology where it was really needed,\u201d said Clearford chief executive Bruce Linton in an interview with the Ottawa Citizen. In 2009 after jettisoning its successful but Ontario-focused Brooklin Concrete division the company switched to focus exclusively on international markets and is now courting municipalities and private developers from Beijing to Peru.<\/p>\n
WORKING THROUGH FOREIGN AID<\/span><\/strong><\/p>\n \u201cClearford has a very clear or direct strategy of focusing on part-two countries – the countries that are ODA (Official Development Assistance) eligible\u201d says Analytica Advisors spokeswoman C\u00e9line Bak. These are countries that receive Organisation for Economic Co-operation and Development support for infrastructure and green technology.<\/p>\n \u201cWe are actively working on turning what we see as our vast market opportunity into tangible revenue-producing commercial contracts.”<\/p>\n But foreign development dollars aren\u2019t Clearford\u2019s main focus. According to Bak, Clean-tech industry revenues in Canada grew 19% from 2008 to 2010 and are expected to reach $61.4 billion by 2020 \u2013 more than Canada\u2019s automotive sector today. For many clean-tech companies, survival means transitioning to capitalize on the high international demand.<\/p>\n Clearford is no exception. After years of scraping by with the Brooklin Concrete division\u2019s profits offsetting the SBS\u2019s multimillion dollar losses, moving into developing countries to give the SBS more of a fighting chance seemed a necessary next step. But despite Linton\u2019s efforts the company continues to struggle to finance its operations.<\/p>\n \u201cWe are actively working on turning what we see as our vast market opportunity into tangible revenue-producing commercial contracts” said Linton in a statement. Break down the rhetoric and the message is that while global markets hold promise, profits are still a ways away.<\/p>\n General and administrative costs alone, which totaled $1.3 million for the company in 2009 and $1.8 million in 2010, were more than ten times revenue ($4,000 and $171,658 respectively) each year. Sales and marketing costs also rose with Clearford\u2019s attempts to build relationships and promote its brand in India and China. Operating loss for 2010 was $2.7 million, up half a million from 2009.<\/p>\n While the company\u2019s second quarter is traditionally slow for Clearford\u2019s SBS sales, its most recent quarterly results announced zero revenue from April to June 2011.<\/p>\n A REPEAT OF 2004<\/span><\/strong><\/p>\n In many ways the company is in a similar state to what it faced in late 2004, when it stockpiled contracts throughout Ontario but failed to complete them in a timely or profitable manner. Investors took note and from second quarter 2003 to the end of 2004 Clearford\u2019s share price dropped more than 75% from around $0.40 to as low as $0.09. Today the share price sits just above a 52-week low at $0.15 and has been on a steady decline since a high of $0.44 in March.<\/p>\n The visit led to a trip by Chongqing Construction to Ottawa a few months later, and four followup meetings for Clearford in Chongqing, China, a city with a population of over five million.<\/p>\n The biggest challenge to opening new markets appears to be getting the ball rolling with an initial major contract. In April 2010 the company thought it had its big break. Former Ottawa mayor Larry O\u2019Brien took Clearford and about a dozen other local clean-tech companies with him on a trade mission to China organized by the Ottawa Centre for Research and Innovation.<\/p>\n The visit led to a trip by Chongqing Construction to Ottawa a few months later, and four followup meetings for Clearford in Chongqing, China, a city with a population of over five million.<\/p>\n The meetings remain just talk, but Clearford hopes it can sign contracts with developers soon.<\/p>\n \u201cThey\u2019re definitely doing the right thing\u201d says Marc McArthur, manager of the Ottawa Clean-tech Initiative, a program of the OCRI.<\/p>\n McArthur says he believes the potential future demand will probably be worth this initial time commitment for Clearford.<\/p>\n \u201cThe resource constraints and booming populations that\u2019s causing this sector to exist in the first place; those things aren\u2019t changing and they\u2019re not getting any better any time soon, so I think there\u2019s lots of longevity in the sector moving forward\u201d he says.<\/p>\n INDIAN PAYOFF<\/strong><\/p>\n Meanwhile in India, some of Clearford\u2019s efforts appear to be paying off. In September the company signed an implementation agreement with a suburban developer in Bangalore for the sewer systems for 121 villas and cottages, an apartment building and a shopping complex. Clearford neglected to disclose the price of the agreement but SBS implementation on additional infrastructure in the region is possible if things go well.<\/p>\n In addition to the Bangalore development Linton hopes to have a landmark deal with a private-sector client in India by the end of the year. He is confident that such an arrangement would give Clearford the leverage it needs to catch the eye of local Indian governments.<\/p>\n In the meantime key investors are subsidizing the company\u2019s efforts by buying share options. One week after the Bangalore agreement Ottawa-based SC Stormont Holdings Inc. committed to exercising $700,000 in warrants throughout the remainder of 2011, giving the company nearly 25% of Clearford shares.<\/p>\n After several years with balance sheets for the SBS keeping Clearford in the red, it is unclear whether the company will be able to reign in sufficient revenue from this expansion.<\/p>\n As history has made abundantly clear, contracts (assuming they do start to roll in) don\u2019t always mean sustainable profits for the company.<\/p>\n","protected":false},"excerpt":{"rendered":" To casual onlookers Ottawa-based Clearford Industries Inc. may look like it has had a facelift in recent years. To a<\/p>\n","protected":false},"author":47,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7,1],"tags":[249],"class_list":["post-2328","post","type-post","status-publish","format-standard","hentry","category-corporate-profiles-2011","category-news","tag-lucas-kittmer"],"_links":{"self":[{"href":"https:\/\/www.cusjc.ca\/ottawainsight\/index.php?rest_route=\/wp\/v2\/posts\/2328","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.cusjc.ca\/ottawainsight\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.cusjc.ca\/ottawainsight\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.cusjc.ca\/ottawainsight\/index.php?rest_route=\/wp\/v2\/users\/47"}],"replies":[{"embeddable":true,"href":"https:\/\/www.cusjc.ca\/ottawainsight\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2328"}],"version-history":[{"count":11,"href":"https:\/\/www.cusjc.ca\/ottawainsight\/index.php?rest_route=\/wp\/v2\/posts\/2328\/revisions"}],"predecessor-version":[{"id":4443,"href":"https:\/\/www.cusjc.ca\/ottawainsight\/index.php?rest_route=\/wp\/v2\/posts\/2328\/revisions\/4443"}],"wp:attachment":[{"href":"https:\/\/www.cusjc.ca\/ottawainsight\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2328"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.cusjc.ca\/ottawainsight\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2328"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.cusjc.ca\/ottawainsight\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2328"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}