edc nov.7.12

anada’s aerospace industry is known for its leading-edge products

and manufacturing processes, but persistent global competition is eroding Canada’s worldwide market share.

Part of the solution, say some experts, is for more of Canada’s small and medium-sized aero-space firms to ratchet-up their capabilities and international trade efforts.

Carl Marcotte, vice-president, Transportation Group at EDC, says, “While we are fortunate to have strong anchor companies in Canada, the global aerospace industry as a whole is moving to-ward a more globalized produc-tion approach. That’s where we see the new opportunities, and where Canadian aerospace SMEs are beginning to look.”

Technologically, Canada is a heavyweight, notes Mr. Marcotte, citing Bombardier’s use of ad-vanced, lightweight composites in its C-series aircraft, and Pratt & Whitney Canada’s (P&WC) development of its revolutionary, fuel-efficient geared-turbofan jet engine among examples of world-class Canadian innovation.

Similarly, he says sophisticated production processes such as GE Aviation Bromont’s almost fully robotic manufacturing plant, which produces aircraft engine components, and P&WC’s new “clean-room” manufacturing fa-cility in Mirabel reflect Canadian production prowess.

“The sub suppliers to these Canadian majors work with the most advanced materials and processes, Mr. Marcotte says, “and that experience is in high demand around the world, especially in growing aerospace markets like China. Because of that level of expertise, Canada’s aerospace suppliers might be surprised how easy it could be for them to grow their international sales.”

Thanks to its wise re-launch and overseas marketing of the iconic De Havilland Twin Otter aircraft, Victoria, B.C.-based Viking Air is among the Canadian SMEs prospering internationally.

Designed by De Havilland in 1965, the sturdy and versatile Twin Otter rose to become the world’s largest-selling 19-passen-ger aircraft, with 844 aircraft sold over its original 30-year run.

Several years ago, Viking Air president and CEO David Curtis and his team identified latent de-mand for the Twin Otter in BRIC and other high-growth emerg-ing markets, where the aircraft’s capabilities are well suited to commercial and military applica-tions.

“Here we are in 2012, and the Twin Otter is back,” says Mr. Curtis, noting that Twin Otters built and sold by Viking are today being used in applications rang-ing from tourism in the Maldives, to transport mountaineers in the Himalayas and miners in Aus-tralia’s Outback, and for govern-mental use in Vietnam. “We are building one every 15 days and selling them globally,” he says.

Mr. Curtis says his firm’s suc-cess is premised, in part, on mar-ket strategies designed to address each target country’s unique dynamics. “It takes some strate-gic thinking to determine how to work within a country’s rules and thrive,” explains Mr. Curtis, who notes that the company markets its products through its own sales force and sales agents abroad.

Meeting rising demand is Viking’s next challenge. The ver-tically integrated company cur-

rently manufactures Twin Otters in Calgary, where it incorporates components made by suppliers in the U.S. and across Canada.

Mr. Curtis says the company’s tightly controlled approach has helped Viking hone every aspect of its operations and focus on the Twin Otter’s quality and profit-ability – keys to success that Mr. Curtis is not willing to sacrifice for the sake of growth. “There are a lot of dead bodies in aerospace – companies that were seduced by volume. I’m not going to blow up the good things we’ve done.”

Instead, his measured expan-sion efforts will soon see Viking’s supply chain feed final assembly lines in key overseas markets where Viking has established joint venture operations, includ-ing China, where Mr. Curtis expects demand will “require us to double production.”

Mr. Marcotte says that when Canadian firms like Viking expand overseas, it offers their sub suppliers a vital chance to go – and grow – with them.

To do that effectively, he says suppliers are wise to build the capacity to serve the needs of large original equipment makers (OEMs) as well as Tier 1 integrators, which are playing increasingly large roles in aircraft production in markets including China and Russia.

In Quebec, several of Canada’s largest aerospace firms have joined industry association Aéro Montréal and the Government of Quebec to co-fund several multimillion-dollar programs designed to help smaller Quebec-based aerospace suppliers posi-tion themselves for growth.

Aéro Montréal president Suzanne Benoit says the MACH initiative, for example, helps accelerate SME competitive-ness and performance in supply chains.

The program emanated from Aéro Montréal’s Supply Chain Strategy Group, which comprises supply chain executives, manag-ers and procurement experts from Quebec-based OEMs and Tier 1 integrators.

While MACH’s ranking system

helps large companies evaluate a SME’s suitability as a supplier, the program also identifies areas where SMEs need to improve in order to play in the big leagues of aerospace.

“During the process, these SMEs are mentored by OEMs and Tier 1 suppliers who are also their

clients. The large firms provide pro-bono time to help the SMEs increase their performance,” says Ms. Benoit.

The program is intense, but the upside is worth the effort, says Ms. Benoit, noting that lead-ing Canadian OEMs “bring their proven SME partners with them internationally and introduce them to the major integrators.”

“It’s absolutely the way to go, given the complexity of the world and the costs involved,” says Mr. Marcotte. “You have to build trust among your partners. And you have to go global.”

Mr. Curtis says, “The bottom line is that Canada is fifth in the world. There are a ton of coun-tries that want to be where we are. And they are investing. For Canada to remain in that top ech-elon is going to take some real strategic thinking and action.”

Mr. Marcotte says help is avail-able, including that provided by EDC. “Take the time to talk to us, to the Canadian Trade Commis-sioner Service, to BDC and your bank, and to your industry as-sociation partners. Each organi-zation brings unique expertise. Make a couple of phone calls. That’s the way to start making in-troductions to foreign enterprises and gaining access to foreign markets.”

sk pulse water jet innova-tor Mohan Vijay and he will tell you the road from

research to technology com-mercialization is a hard path to follow. But as Dr. Vijay and his colleague, VLN Advanced Tech-nologies’ vice president of busi-ness development, Willie Bloom attest: persistence pays.

Dr. Vijay, who holds a PhD in nuclear engineering, spent more than 30 years advancing water jet technology, before Mr. Bloom helped VLN land a multimillion-dollar deal with Pratt & Whitney.

VLN’s system uses ultrasonic waves to generate an intense, pulsed water jet stream that is or-ders of magnitude more powerful than conventional systems. For example, a VLN pulse water jet supplied by a pump operating at approximately 10,000 psi delivers 82,000 psi of water-hammer pres-sure on its target.

Eventually, Pratt would become the first to put VLN’s pulse water jet to work in a Maintenance Repair and Overhaul (MRO) ca-pacity – using it to efficiently strip coatings from used aircraft parts.

Mr. Bloom says originally Pratt bought an earlier commercial iteration of VLN’s technology in 2003, but “they ended up parking

it. We always stayed in touch, keeping them up-to-date on our advances. Eventually they came back to us.”

In the meantime, Mr. Bloom continued to knock on doors, in part by attending aerospace trade shows in the U.K., Japan, Poland and Germany and working with the Canadian Trade Commission-er Service overseas. “It’s always great to have someone from your own land on the ground in an-other country who can help make introductions,” says Mr. Bloom.

In 2005, a contract with U.S. aerospace giant Alliant Techsys-tems (ATK) looked imminent. ATK planned to use VLN’s pulse jet to refurbish NASA Space Shuttle rocket boosters, but the cancellation of America’s Space Shuttle Program scuttled the deal.

In 2010, however, Pratt re-turned – this time sealing a lucra-tive deal with VLN.

Pratt has since built two robotic versions of the pulse jet, one of which resides in Alabama and the other at VLN’s Ottawa facility. “We continue to do R&D with Pratt to grow the technology, make it more proficient and ex-pand its applications. This is just the beginning,” says Mr. Bloom.

t’s one thing to have strong skill sets. It’s an-other to leverage them

for full advantage. Montreal-based AV&R Vision & Robotics has done both.

The company was apply-ing its expertise in automated visual inspection and finish-ing of high-value components across a range of industries, but it wasn’t until AV&R honed in on opportunities in aerospace that its business really began to take off.

“Six years ago, aerospace rep-resented just 30 per cent of our business,” says AV&R CEO Eric Beauregard. “Today it’s nearly 75 per cent of our revenue, which has more than doubled over the same period.”

AV&R, which last year won the prestigious 2011 Desjardins Entrepreneur International Commerce Award, began its successful climb after introduc-ing its automation expertise to aerospace manufacturing.

“Traditionally, the final inspection of high-end engine components has been done manually by technicians and

engineers. The market wanted to automate these processes for the sake of better objectivity and consistency.”

Through persistence, AV&R team made inroads with Cana-dian OEMs including Pratt, GE and Rolls Royce. “We targeted the early adopters; they have the means and the interest. It’s tough to get in, but when you find the right people, their authorization to buy new tech-nologies can be substantial.”

By delivering on its promises, investing in its own continual im-provement and demonstrating an ongoing interest in collaborative R&D, AV&R built strong partner-ships with the biggest players in the aerospace industry.

“As soon as you do that, then they introduce you to their part-ners and their suppliers to explore ways that you can work together.”

For AV&R, this included part-nering with OEM technology labs, including GE Aviation. “We bring the background IP. We protect it. They package it for their own needs. It provides us with op-portunities worldwide that would otherwise be too expensive for us to pursue.”

AV&R’s efforts have taken its business from Canada to the U.S., EU, the Middle East and Asia, where Canadian embassies and the Canadian Trade Commis-sioner Service have helped AV&R further expand and diversify its contacts.

“We are living proof that you can survive in manufacturing, but it has to be high-tech, high-pro-ductivity and high-quality,” says Mr. Beauregard.

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Canadian aerospace front runners chart courses for global growth

this report was produced by randallanthony communications inc. (www.randallanthony.com) in conjunction with the advertising department of the globe and mail. grant macmillan, Brand Partnership manager, gmacmillan@globeandmail.com.

Viking Air’s reintroduction and manufacturing of the iconic Twin Otter aircraft has opened new overseas markets for the Victoria, B.C.-based company. Pictured above, villagers in Papua, New Guinea rush to see Viking’s delivery of a new Twin Otter to the Ok Tedi Development Foundation, which purchased two of the aircraft to service local communities. Photo: suPPlied

“Here we are in 2012, and the Twin Otter is back. We are building one every 15 days

and selling them globally.”

David Curtis is president and CEO of Viking Air

Pushing right buttons yields success for Quebec automation firm

For Ottawa tech firm, powerful technology and persistence pays

Case study: VLN adVaNCed teChNoLogies

Case study: aV&R VisioN & RobotiCs

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AV&R CEO Eric Beauregard says applying automation expertise to aerospace manufacturing has been a key to the company’s success.Photo: suPPlied

Pulse water jet innovator Mohan Vijay with senior engineer Andrew Tieu and vice president of business development Willlie Bloom. Photo: mark holleron