If you walk into any hockey rink in Hamilton or Burlington, chances are you will be sitting under one of Superior Radiant Product’s arena heaters. Or you may bask in the warmth of one of SRP’s outdoor heaters on a restaurant patio some cool evening. But that would only be the tip of the iceberg for a Stoney Creek company that has a global footprint– shipping industrial radiant heating products around the world– including China.
While so-called futurists make a cottage industry out of trying to predict what is to come in what they believe to be the post-industrial Hamilton you have advanced manufacturing companies like Superior Radiant– only one of dozens of small to medium sized advanced manufacturing companies working away quietly in Hamilton—shipping products around the globe. A Deloitte study of Hamilton’s advanced manufacturing sector commissioned by Hamilton’s Economic Development Department showed the number of manufacturing jobs in 2017 projected to be 54,300 –capping 6 years of steady growth in he sector.
For Kevin Merritt, SRP founder and President it all started when he worked as a manager for an American heater manufacturer, who had a branch plant in Grimsby. When they shut down their Canadian plant, Kevin and some of his fellow managers decided to start their own company. “We had a few coffees and decided this is what we know and can do best and we can do it better.” Thus was born SRP, and over the years Kevin emerged as the principal owner. From the beginning, Kevin always had the export market in mind. “I’ve always been involved in exporting because the Canadian market wasn’t big enough. The more diverse the market the less risk for the corporation.” The American heater manufacturer experience had given Kevin a leg up in developing foreign markets. “As the Canadian division of a US company we had always been given the export market because Canadians were well respected in other parts of the world.”
Kevin says he is comfortable opening markets offshore. “I was always exposed to the world so I never had an image of the market as being just Canada for anything.” The company set about to develop a strong presence in a number or world markets. “We first looked at the US market because it was the biggest,” said Kevin, “but then we had further opportunities in China—Russia. We were never afraid—I’ve never looked at other countries as something you can’t do…it’s a challenge sometimes…but why not?
The popular perception is that North American manufacturers ship jobs to countries like China, not products, but the reality is more complicated. To successfully operate in China, says Kevin, you have to be adaptable. “With China we were initially offering a product that wasn’t available there so the price wasn’t a big deal…price is a big deal now and as a result we are establishing a factory in China for the Chinese market. Duty is a factor in China—3 years ago they imposed a 20% duty on our product going into China…so barriers have been popping up, prices have been going down, local competition has been increasing. Those factors were not there at the beginning but we had gotten a foothold…so now we are re-strategizing and re-grouping with the Chinese market.” In some cases SRP ships partial product to China where it is finalized. But there is still demand in China’s growing middle class for 100% made in Canada products because of another reality of the Chinese market says Kevin—quality. “We do get customer demand in China for something that is completely made outside of China…and that’s a sentiment that comes from within China itself.”
Kevin Merritt says Canadian manufactured products enjoy a great reputation for quality around the world, and contrary to another misconception—wage rates are not that big of a problem when competing against emerging economies. “Quite honestly we can produce product here as competitively as we can produce it in China…because in manufacturing, labour is not a big part of it…it isn’t anymore…you have automation—and the same thing is happening in China. We go to one of our suppliers in China where 8 years ago everything was done by hand…now its computer assisted machines, robotic welding so the cost of production is not that much higher in Canada than China. All the design…all the research and development is still being done here. In addition to all of the research and development for the global operation, the 50 employees at SRP’s Stoney Creek plant are kept busy supplying the Canadian market and the US market which is still SRP’s largest and which has potential to become a bigger market.
To be a successful competitor on the world stage requires anticipating shifts in trade policy and staying ahead of them. Kevin is already taking steps to respond to developments like Brexit ( he doesn’t think Canada will be overly disaffected), and CETA –the Canada Europe free trade agreement which Merritt sees as an opportunity for growth. “We have a new product line that will go into the UK and Europe. CETA was an integral part of the discussions we had with new partners in the UK.”
Then of course there is the little matter of a gentleman named Donald Trump and his buy-America policies. Kevin is not overly worried. “There’s been a lot of talk but we haven’t seen any actual impact of Trump’s trade platform, our distributors in the US say not to worry—‘you’re Canadians…you’re our neighbours to the north…we’re not going to be messing around with you guys too much…’ The one thing I see Trump is a businessman.” But just in case…. SRP has opened a plant in Indiana as a hedge against protectionism and to better serve a growing market opportunity.