The Canadian Standards Association, now known as CSA Group, is familiar to consumers for its logo that indicates hockey helmets and electrical cords are up to scratch. But the organization does much more: Its 1,600 employees develop standards and perform testing and certification for everything from medical devices to fireplaces to solar panels. It has even issued a standard for maintaining mental health in the workplace. Chief executive Ash Sahi has spearheaded an aggressive international expansion, buying or setting up test labs in Asia and Europe to broaden the agency’s global footprint.
How do you describe what the CSA does?
When we began, the idea was to have more public safety in railroads and bridges and electrical products. We have transformed from just looking at safety, to adding other things that are important to society, such as writing standards in medical fields. I see our role as an organization that does social good. Whether it is workplace safety, mental health, electrical shock, or electric vehicles, we are interesting in making sure that people don’t get hurt, and that they have safe products.
How are you trying to make it a more global entity?
That evolution has taken place over the last 40 or 50 years, but in the last 10 years we have been much more focused on becoming international. Eighty per cent of our revenue today comes from outside of Canada. One reason is the China growth story. A lot of manufacturing moved from the Western world to Asia. Our customers manufactured products in Asia, then shipped them back here, and they still needed those products to be tested and certified. For a long time we would fly engineers over there, but then we decided to invest in our own laboratories in China. Today we have at least a dozen labs and 200 employees in China.
Where do you want to concentrate your international expansion?
We focus on countries that are stable politically, have reasonable control on currencies, and where there is technology and growth. In Europe we picked the United Kingdom, Germany and Switzerland, [as well as] Italy and Holland. In Asia, we selected China because we already had a big presence there, along with South Korea, India, and Taiwan.
Are developing countries really interested in setting standards?
The developing countries do write lots of standards. The problem is there is no implementation. Companies are broke, and they will put in thinner wires [in a product] than they need to. The policing of these standards is still behind the Western world.
Aren’t countries such as Germany already saturated with testing labs?
We have made two acquisitions there [of companies] serving the automotive industry and the electrical industry. We have about 40 engineers at BMW who go there every day to test electric cars and hybrid cars. We also built a power tools lab so we can test Bosch’s drills and those kinds of things. And we are building a new medical lab and a new hazardous locations lab where we test instruments to ensure that they don’t blow up in explosive environments.
How have you managed your international acquisitions?
We have chosen to run in each country with local management. We want people to be able to speak the language, understand the culture, and understand relations with government. Expats just can’t do that, especially in countries such as China where English is really not spoken very much, even at the higher levels of government.
Should private Canadian companies be taking a more aggressive approach internationally?
If companies don’t go to Asia where the majority of the population is on this planet, they will miss out on a huge opportunity. The middle class in China and India is already more than a billion people. That didn’t exist 20 years ago. If you are not participating in that, and you are [only] participating in the U.S. and Canada, you will miss a whole bunch of stuff.
Who actually controls CSA, since it is a not-for-profit entity?
We have about 8,000 members in Canada and the United States. Seventy per cent of our members are industrial manufacturers, but a member can be an engineer, a non-governmental organization, someone from a university, government, or a regulator – anyone who has something to contribute to a standard. They elect the board and the board elects the CEO.
How do you raise funds for international expansion, if you are a not-for-profit without access to capital markets?