The sea cucumber is an ocean-dwelling creature that few North Americans have ever seen, much less eaten. But for the president of G.E.M. Fisheries Ltd., Roger Foulem, this little-known bottom dweller is both a lucrative business opportunity and a symbol of his innovative approach to a traditional business.
Looking for more growth in his Saint-Simon, New Brunswick, lobster processing plant a few years ago, Foulem turned to sea cucumbers, a delicacy in some parts of the world that happens to be rich in essential omega 3 and 6 fatty acids.
"We realized that the Chinese were hungry for this product and our Atlantic waters provide a plentiful source," Foulem says.
It's just one of the forward-looking ways his company has diversified its product line. "We've always been creative and pushed ourselves to do things differently, whether it's tackling new markets or R&D," says Foulem, who opened his processing plant in 1983. "Not only have we managed our company through rough times, we've been able to grow significantly."
The company has grown its revenues to $25-million annually from $1 million its first year. But those 26 years saw their fair share of ups and downs in the volatile Atlantic fisheries industry. Initially, the company processed ground fish such as cod and haddock. However, with a federal government moratorium on fishing in 1992, Foulem's business dried up.
Changing to survive
Determined to keep the company afloat, he made the switch to lobster processing, investing $8-million to revamp the production line. "We had to dip into our own profits to make those big changes in our plant. But I've never been afraid to invest money to make money."
More recently, G.E.M. Fisheries has been working hard to develop business in the international arena, with the goal of becoming less reliant on the U.S. market, where it now exports 95% of its product.
In 2000, Foulem had the foresight to start developing new markets in China, which he hopes will eventually represent 25 per cent of his revenues. "The Chinese have shown a strong interest in our frozen lobster products that are used in giant restaurant chains," he says.
The company has attracted Chinese customers through trade missions and trade shows. "It's really important to get to know your customer, especially outside your country," says Foulem, who travels to Hong Kong, Shanghai and Beijing regularly, most recently in fall 2009. "The Chinese were interested in seeing how we cook lobster and appreciated our enthusiasm for our products."
It was also in 2000 that G.E.M. Fisheries jumped on the opportunity to develop a sea cucumber business, which has enabled the company to keep its plant open 10 months of the year. "The lobster processing happens between May and December and the winter months are now devoted to processing sea cucumbers," Foulem says. "We've been able to create jobs for people year round and reduce unemployment in the area."
Help from researchers
The company has also invested in R&D with the Fisheries and Marine Institute of Memorial University of Newfoundland and the Canadian Centre for Fisheries Innovation in St. John's to develop new technology that will mechanize the process of stripping the meat and skin off sea cucumbers. "Right now, G.E.M. Fisheries is processing this product manually. This equipment shows promise to improve their productivity," says Joe Dunford, food process engineer at the institute's Centre for Aquaculture and Seafood Development. "They are definitely on the leading edge in this industry."
It's an exciting time for G.E.M. Fisheries but, like most exporting companies, the firm has felt the impact of the fluctuating Canadian dollar. And last year, the plant saw a dip in sales because of the global recession, especially a downturn in lobster prices because of belt-tightening south of the border.
To get through that tough period, the company went to BDC to refinance its debt. "We're a long-term client and we had already earned the bank's confidence by showing we were not sitting on our laurels," Foulem says.
The company also recently hired a controller to ensure its finances are tightly managed. "It's so important today to watch your cash flow and expenses. We've learned that vigilance is crucial to growth and keeping your company healthy."
The next big step for Foulem, now 65, will be succession planning. He eventually intends to hand over his business to his son Steve, who handles buying for the company, and his son Eric, the plant production manager. "I'm not ready to go just yet," says Foulem, who describes himself as a workaholic. "As a family, we've worked hard to build our company, and I want to be here as we make this transition. I know that when I retire, my business will be in good hands."
- Be creative and diversify your business to support growth
- Invest in new technology in order to expand your products and services
- Explore international markets to become less reliant on U.S. customers
- Build a strong rapport with your international clients by visiting them on site
- Work closely with universities to conduct R&D and gain a competitive edge in your industry
- Keep tight control of your finances, particularly cash flow and expenses
- Plan the succession of your company to secure its future
Content in this section is provided in partnership with the Business Development Bank of Canada. BDC provides entrepreneurs with financing, venture capital and consulting services. To find out more go to BDC.ca.