Cultivating Export Expertise for Northern Ontario’s Mining

Supply and Services Sector

For 39 years, KBM has drawn on our deep understanding of the economics of natural resources extraction in a manner that is socially responsible and that ensures the ecological integrity of an affected region. Based in Thunder Bay, Ontario, with satellite offices in Toronto and Prince Albert Saskatchewan, we have grown to 30 employees after retooling during the downturn in the forestry sector. By applying adaptive and creative strategies, and by augmenting our services to the mining sector in Northwestern Ontario and Minnesota, KBM Resources Group – originally KBM Forestry Consultants –have increased our business by 30% and nearly doubled our consulting staff over the past five years.

KBM’s Aerial Survey program has remained at the leading edge of digital aerial imaging technology and grown to include two aircraft equipped with state of the art aerial mapping systems. KBM currently provides colour and thermal infrared aerial imaging. In spring 2013, KBM purchased new Trimble Harrier 68i LiDAR system for simultaneous image capture and 266 kHz effective measurement rate (at 60 deg scan angle). This system delivers high point density (up to 12 points per square meter) to provide detailed data needed for precise planning, engineering, and monitoring applications.

KBM offers a wide range of consulting services which include aggregate and road planning/permitting, EA facilitation, wildlife studies, forest management planning, certification auditing, First Nation land use planning / consultation, forest resources inventories , softcopy photo-interpretation, GIS / mapping services, site remediation / rehabilitation, and technical field data setup / collection.

One of KBM’s practical innovations is the application of an environmentally-friendly emulsion branded Entac© which is used to pave trail and road surfaces, control erosion on road shoulders, suppress dust on roads, and seal stockpiles and tailings ponds. KBM believes Entac© which is constituted from a residual of the Kraft pulp process, will become a key product in the emerging ‘green economy’ and a potential locally-made product drawn from regional mills. Other leading-edge technologies we are adopting include Unmanned Aerial Vehicles (UAV) for cost-effective surveying; Juniper rugged handheld computers for taking customized, accurate field records; and EnviroSpan culverts; solutions for maintaining natural streambeds.

Internationally, KBM has been targeting the Minnesota market. We have been doing aerial surveys for mining clients in the Iron Ore Range and Entac© has been successfully used on service roads and mine tailing ponds in the Iron Range mines and on municipal roads in Southern Minnesota. As we expand our business outside of Northern Ontario, our main challenge is to create awareness about our company, services and products in a new market place as well as to get to know this new market. KBM uses a twofold strategy. The first step is to build partnerships with local companies. The second step is to build product /service awareness and trust in the local business community through marketing and properly executed service and product delivery. (Continued on page 4)

September, 2013

Laird Van Damme, M.Sc.F, R.P.F., senior partner of KBM Resources Group in Thunder Bay, ON commented on their company’s growth from a lead service provider in forestry management planning into a compre-hensive resource sector provider with a growing list of mining sector clients outside of Ontario.

KBM has been participating in the Mining Supply and Services Export Assistance Program since 2012.

KBM RESOURCES GROUP

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Inside this issue:

• KBM Resources Group

Corporate Growth and Exporting

Congratulations to SEMP Graduates

International Trade Shows

High resolution orthoimagery of a mineOne year after combined Entac and grass seed application on palladium mine tailings.

“To succeed in exporting, the character and quality of the people in the company can make all the difference. Do they possess a growth mentality? Do they like a challenge? Will they invest in a calculated risk?”

CORPORATE GROWTH AND EXPORTING

WHEN IS A COMPANY ‘EXPORT READY’?

The term ‘export readiness’ is often used, but it is difficult to define or quantify. Both ‘export’ and ‘readiness’ are relative terms. To me, ‘exporting’ is the capability of achieving sales outside of a firm’s ‘home’ market, thus an ‘export’ could be from a local to a regional market or beyond, to national or international markets. Since April 2011, I have been engaged in the Strategic Export Marketing Program (SEMP) which offers export-marketing advice to mining supply and services firms in Northern Ontario. So far, I have done individual strategic planning exercises with 35 firms and, when the program ends in October 2013, I will have worked with 40. In selecting companies to participate in the program, here are some of the characteristics that I have found are critical to helping firms enhance their ‘export readiness’. • They must have an exportable product or service. There

are many factors here, such as: need and acceptance in a new market, the level of value offered, state-of-the-art technology, the competitive situation, shipping/travel and other costs to reach the new market.

• The size and penetration of the geographic market now

handled is a factor. If a company is a front-runner in a regional market, they should have a better chance in a national or international market than a company that is trailing in that same regional market.

• The depth and breadth of previous experience outside

of their ‘home’ market is important. A firm that is used to managing remote offices or working with independent dealers or sales representatives should be able to expand their network more easily than a company that has never done such things.

• To succeed in exporting, the character and quality of

the people in the company can make all the difference. Do they possess a growth mentality? Do they like a challenge? Will they invest in a calculated risk? Do they have appropriate educational, business and travel expe-rience? Do they have an affinity for different cultures and languages? If they are lacking key experienced personnel, are they prepared to hire such people?

• The level of development of a firm’s business systems to back growth is important. This includes production, quality control, research and development, finance, human resources, and, perhaps most importantly, marketing and sales. Have such systems been delivering growth?

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Jon Baird, B.Sc., P.Eng. is the Managing Director of CAMESE - Canadian Association of Mining Equipment and Services for Export; and an export advisor for the Strategic Export Marketing Program in North Ontario.

EXPORT GROWTH BEGINS WITH A PLAN.

Virtually all of the firms that I have worked with in the SEMP program in Northern Ontario have developed some level of ‘export readiness’, and they realize that there is a huge potential market in the global mining industry. But for firms not currently selling outside of their home market, there is a noted lack of research and planning in regards to marketing. In fact, even the firms with more advanced exporting activities could benefit from a better focus of their export marketing and sales activities. Firms without a plan are strategically rudderless and, as the adages say: “If they do not know where they are going, any road will take them there”, or “If you do not know what port you are sailing to, there is no such thing as a good wind.”

When I ask most SME businesses if they want to grow, the response is almost always ‘yes’. When asked about the rate of growth that they are planning for, it is clear that there is no plan. When asked what it would take in terms of finance, production facility, human resources, new products, new markets, to, say, double their revenues, it is clear that this is a subject that has not been approached before.

The lack of a plan is the single most important limit to growth in the companies with which I have worked. And yet, this kind of planning is not difficult. Progress starts with the recognition of the need for it.

THE IMPORTANCE OF A DEFINED MARKETING BUDGET TO DRIVE GROWTH.

Most of the small- and medium-sized companies that I have been working with in the SEMP program have not previously recognized ‘marketing’ as a specific function within their company. When asked to define marketing, it is often confused with sales and, while the communication aspects of the marketing function are usually mentioned, the research, planning and the ‘putting in place’ of the tools of marketing are not considered.

As companies begin to define marketing better, they realize that they have created web sites, brochures, business cards and have advertised, developed promotional items, attended trade shows and undertaken business development projects and more. However, they have not done things in a coordinated way nor have they accounted for these expenditures under the marketing function, budgeting and planning are missing. As firms begin to realize that marketing can be a powerful, cost-effective growth mechanism, the challenge is to create a ‘marketing mix’ in which all the tools of marketing are weighed, balanced, budgeted and implemented for cost effectiveness.

Once they are aware of the importance of marketing, the question always arises as to what percentage of revenues should be spent on these activities. This is a difficult question to answer as it depends on company size, the tools selected, desired rate of growth they want to achieve in the target market and the level of brand presence that they already have. If selling costs are not included, it is my belief that if a small- or medium-sized firm is not prepared to spend between 1% and 5% of revenues on marketing, it is not going to grow. Further, without a budgeted marketing plan, I fail to see how a company can grow meaningfully outside its home market.

“It is my belief that if a small- or medium-sized firm is not prepared to spend between 1% and 5% of revenues on marketing, it is not going to grow.”

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MINING IS AT OUR CORE! A comprehensive listing of mining supply and services companies that are export ready and capable of serving international clients. A one-stop shop for international mining procurement executives. To view the more than 100 Northern Ontario companies already listed, visit www.ontario.ca\miningatourcore

To inquire about having your company listed, please contact Anne Belanger at anne.belanger@ontario.ca

THE FOLLOWING COMPANIES HAVE COMPLETED THE STRATEGIC EXPORT MARKETING PROGRAM:

• B&D Manufacturing• BESTECH• Blue Heron Solutions for Environmental Management• Conveyors Plus• Digital Engineering Inc.• Dingwells Machinery and Supply• Driller’s Edge• DST Consulting Engineers• Fladgate Exploration Consulting• Four Leaf Solutions• HARD-LINE• High Grade Controls• Industrial Fabrication• KBM Resources Group• Lakehead Marine & Industrial• Maestro Mine Ventilation• Mansour Mining Technologies• Metso Paper (ENERDRY Constructors Ltd)• Mikro-Tek• Miller Technology• Milman Industries Inc.• Nordic Mine Technology• Northern Superior Homes• Pneuma-Tool• Porcupine Engineering Services• QWAN Technologies Inc.• Rezplast Manufacturing• Rock-Tech• Symboticware Incorporated• Synergy Controls• TBT Engineering Limited• Temiskaming Industrial Mining Equipment• Tesman Inc.• Testmark Laboratories• Trident Mining Systems• Venshore Mechanical• Wabi Iron and Steel• Walden Equipment• WipWare

CONGRATULATIONS TO OUR SEMP GRADUATES

Dates for the next round of SEMP applications will be announced in the coming monthsPlease contact Scott Rennie, Project Manager, scott.rennie@sudbury.ca or Kaitlyn Dunn, Project Coordinator, kaitlyn.dunn@sudbury.ca for more information or visit www.investnorthernontario.com

We welcome your feedback on the newsletter. Please contact Scott or Kaitlyn.

is funded by the Province of Ontario through the Ministry of Northern Development and Mines (MNDM) and is being delivered by Ontario’s North Economic Development Corporation (ONEDC).

SEMP has been designed to fit the varied needs of mining supply and services companies looking to enhance their export potential.

Working directly with an international advisor, Mel Sauve, President of Global Growth, in the Northwest or Jon Baird, Managing Director of the Canadian Association of Mining Equipment and Services Export (CAMESE), in the Northeast.

Program Includes:

• Up to six months of customized ‘one-on-one’ consultation

• A confidential, two-day workshop with your senior management team

• Three one-day marketing and sales seminars designed to help you plan and select the right tools for your export development strategy

INTERNATIONAL TRADE SHOWS & EXPORT PROGRAMS

Extemin 2013September 16-20, 2013Arequipa, Peru

Bangalore, IndiaSeptember 19-21, 2013Bangalore, India

Minera 2013September 25-27Medellin, Colombia

30° Convencion Internacional de MineraOctober 16-19, 2013Acapulco, Mexico

Expomin 2014April 21-25, 2014Santiago, Chile

Mining Turkey 2014November 1-3, 2014Istanbul, Turkey

The Strategic ‘One-on-One’ Export Marketing Program (SEMP)

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KBM RESOURCES GROUP (Continued from page 1)

As we grow, our greatest advantage is in our central location and proximity to several developing mining markets, including Ontario’s Ring of Fire, Saskatchewan’s potash, uranium and valuable metal mines and the Iron Range in Minnesota (only 1.5-hour flight away). The Ring of Fire has been, and will continue to be, our most promising target in Ontario. Our advantage is in-depth local knowledge and good working relations with several First Nation communities in northern Ontario established through values mapping, forest management and land use planning.

Saskatchewan, with its fast developing mining and oil-and-gas sectors and associated infrastructure development, is one of our most promising new markets. KBM has flown and processed data on over 4,000 km of power line for SaskPower. Having a satellite office in Prince Albert, SK, and a well-established network with Saskatchewan forestry and utility sectors, will likely benefit our entry into this market. Manitoba’s resource sectors are also an important part of KBM’s growth strategy and can be sourced from both office locations.

Outgoing trade missions organized and led by the Ministry of Northern Development and Mines are bolded. For information on joining these missions, please contact Stephanie Dunbar at Stephanie.dunbar@ontario.ca

Export Seminars, Targeting the Saskatchewan Mining Sector and Secrets to Growing Your Export Business.Timmins, Thursday, September 19 2013 from 8:00 a.m.-10:30 a.m. and Kenora, Thursday, October 3, 2013 from 9:00 a.m.-11:30 a.m.To register please contact Kaitlyn Dunn at kaitlyn.dunn@sudbury.ca