Canadian manufacturers that are relying on the low dollar to spur a recovery might want to listen to Joerg Stieber, chairman of a company whose family has been making things in Canada since 1962.
“You cannot rely on a cheap currency,” said Mr. Stieber, chairman of Ontario Drive & Gear Ltd. “I’m dead against that as a business philosophy.”
The way to succeed as a manufacturer in Canada – with its small domestic market – is to constantly innovate, be at the forefront of technology and find a niche, maintains Mr. Stieber, whose father founded the maker of all-terrain amphibious vehicles.
The company introduced the all-terrain Argo in 1967.
The Argo still sustains a business that is profitable on sales of about $65-million a year and employs 230 people at two plants in New Hamburg, a 15-minute drive west of Waterloo, one of Canada’s high-technology hubs.
Ontario Drive has kept the Argo fresh by introducing about 50 new innovations or improvements every year and adding models of the vehicle for use by fire departments, utilities and the military to expand beyond its long-time recreational and exploration markets.
The newest versions, which were unveiled at a week-long fair for the company’s dealers, distributors and suppliers this week, include heated handle bars, UBS ports, new anti-corrosion paint and improved suspensions.
“You have to be the best in your class in terms of product,” Mr. Stieber said in an interview after buzzing around the company’s property with a reporter and a photographer in an eight-wheeled Argo.
Sales for the company, which also has a gear and transmission unit and a space division, have grown from $34-million in 2005 to what he says could hit $140-million by the end of the decade, depending on the economy and the success of new products now in development or being tested.
Among those products is Artemis Jr., a rover that could go on a NASA expedition to the moon planned for 2020.
Ontario Drive is now testing gears and bearings to see how they will withstand the harsh lunar environment and moon dust, which Mr. Stieber describes as “basically like ground glass, only sharper.”
The company has purchased a bucket of simulated moon dust for $5,000, which it is using to develop the rover and its components.
“What I would like to see one day is a Canadian rover on the moon with a little Canadian flag on it that [also] says Argo on it,” he says. “That’s on my bucket list. It’s a possibility but it’s a long shot.”
Robotic vehicles represent another key focus.
The company also has prototypes under development of a robotic vehicle for infantry that would be tethered to a soldier and carry the 30-kilogram packs for about 10 soldiers while they’re on a mission.
If the soldier backs up, the vehicle does also. If the soldier comes under fire, he can detach the tether and the vehicle will park itself.
This vehicle has other applications, such as crop spraying, Mr. Stieber noted.
On the downside, the collapse of oil and commodity prices has hurt sales on the exploration side of the business, which has been a strong market.
So has the collapse of the economy in Russia, which has been Ontario Drive’s largest overseas market. Western sanctions have hurt and the plunge in the value of the ruble has forced the company to almost double the prices of its vehicles.
“It’s a huge challenge and our market in Russia has seriously declined,” Mr. Stieber said. “We are looking at possibilities about what to do there.”
A resurgence of oil prices would obviously help, but he said the company is not pinning its hopes on that. The company is trying to make up for the declines in Russia and the oil patch by boosting sales in Western Europe and increasing the number of dealerships it has in the United States.
It’s also trying to increase sales to utility companies, which can use Argo vehicles where there is no road access.
“It’s a nice market because it’s not affected by recession and it’s a worldwide market,” he said. “Every country has a utility and a grid they need to maintain.”Report Typo/Error