Small Alberta businesses seek a new frontier in China

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For more than two decades, Darryl Nelson has built a business in Spruce Grove, Alta., cleaning dirt. Oil, pesticides, PCBs – if it spills, chances are he can find a way to extract it from the ground. And on his province's tens of thousands of well sites, there has been plenty to clean up.

But last year, Nelson Environmental Remediation did not earn a single penny in Alberta. With oil prices plunging and companies slashing budgets, cleanup work has vanished. "Our conventional clients in upstream oil and gas have gone into a complete hiatus on environmental spending," he said.

So Mr. Nelson has been forced to look abroad for work, which is why he has travelled to China four times this year, hoping to capitalize on the country's rising desire to clean up its industrial messes.

"The scope of work to be done is astounding from a North American perspective," he said this week, midway through a 12-day trip through Japan and China organized by the Alberta government. "China is maybe the holy grail of the environmental industry."

With him are 150 people and some 80 companies and organizations, making it the province's largest-yet trade mission – proof, the Alberta government says, that it's making good on promises to diversify the provincial economy.

"Businesses that do the best in a downturn are those that have a diversity of products, or a diversity of markets," Deron Bilous, provincial Minister of Economic Development and Trade, said in an interview. "Our government believes there's a much stronger role for the government of Alberta to play to help facilitate that."

But the trip also underscores how difficult that will be. The oil downturn has stripped tens of thousands of jobs from the province, many from oil and gas giants not represented on the China trip. Law firms, engineering consultants and pump manufacturers are on the mission, as are some of the province's business associations.

Most of those seeking new frontiers, however, are smaller firms that count employees in single and double digits. Some are unconventional entrepreneurs like Vitality Air, which bottles Alberta air as a novelty for export. Others include TSX Venture Exchange-listed nutrient extraction upstart Radient Technologies Inc. (market cap: $11.29-million) and Fortress Mountain Holdings, which holds a ski property west of Calgary and has hopes China can help it realize dreams that have struggled in Canada.

Fortress may be Alberta's least-successful modern ski operation, with a current cat-skiing capacity of just 14 to 18 people a day at a mountain first opened in the 1960s, but largely left for dead a decade ago. Those now managing it hope to secure $28-million from a Chinese investor to build a day lodge, water systems and six lifts.

"It's a bit of a hidden gem that needs some polishing up," said Michel Berdnikoff, who does government and stakeholder relations for the company. He has pitched Fortress as a chance for Chinese investors to familiarize themselves with ski-hill ownership and operation as China embraces winter sports ahead of the 2022 Olympics it will host.

It's not clear, though, why anyone with those ambitions would choose Fortress over another, more established ski property.

Mr. Bilous acknowledges that "it's definitely not an overnight thing, diversifying the economy, and obviously there are challenges."

Still, the need is clear. Alberta has, in comparison to other major provinces, an insular commercial sector. Fully 85 per cent of its companies "actually don't export trade, goods, services and knowledge outside Alberta," said Mary Maron, president of Calgary Economic Development.

"We have to point our guns outwards and not inwards, and start to think of Team Alberta a lot more."

For those able to navigate the cultural and economic barriers, there are opportunities. Inspire Sports chairman Liang Cheng was born in China where he was once a champion gymnast. He then moved to Alberta and launched a gymnastics apparel company in Sherwood Park, Alta. In recent years, he also began opening gyms in China to train young athletes interested in the sport for fitness and fun rather than the patriotic glory that motivates national programs.

He has opened four gyms already in China, but has ambitions for many more.

"We are looking for partnership and investment," he said. "Because we want to expand quickly. China has no copyright. Lots of people are going to copy us. So we are looking for 100 cities to build out."