Powell River, B.C.-based Aero Design Ltd. specializes in cargo baskets for helicopters.Chris Kreamer
They make the kind of niche products most of the world barely registers: cargo baskets for helicopters.
But the market forces faced by manufacturer Aero Design Ltd. are a quintessential example of those faced by Canadian exporters.
The main customers for Powell River, B.C.-based Aero Design Ltd. are Canadian helicopter operators, those that lug passengers and supplies to all sorts of hard-to-reach locations throughout the country. Cargo baskets clipped on the outside of the helicopters reduce wear and tear inside the cabin and allow for carrying far more equipment.
"Anything from large equipment that simply won't fit into the cabin, to things like dangerous goods, bear spray, fuel, things like that that you just don't want to have in the interior of the helicopter," Mr. Rekve said.
But unlike another Canadian competitor, Hawkesbury, Ont.-based Dart Aerospace, which sells an array of aviation parts, Aero Design specializes primarily in baskets. The six-person business is growing and is increasingly looking toward overseas sales as word of mouth about their baskets spreads. Besides direct sales worldwide, its baskets are distributed by a few other companies (such as Aeronautical Accessories, a division of Bell Helicopter) which are looking for more global reach.
But here's the crux: Aero Design as a small manufacturer buys its raw materials in U.S. dollars. And because aviation regulations are so tight, it must buy top quality materials, and therefore has little leeway to shop around. Yet, Aero Design sells the baskets in Canadian dollars, which makes them more competitively priced with the currently low loonie. But it also eats into revenue.
"It's a double-edged sword," said Jason Rekve, co-owner of the company, alongside business partner Jeff Clarke.
So why can't Aero Design raise its product prices when the Canadian dollar drops?
"There are a few reasons," Mr. Rekve said. Primarily, the company doesn't want to lose its competitive pricing, particularly as it expands abroad, with customers now as far flung as Australia and Papua New Guinea.
It also doesn't want to lose its edge when pitching the baskets at trade shows, a key tool in promotion, or in online sales. "A good portion of our customers now actually come to us. … A lot of our customers we don't even talk to. It's all over e-mail." Mr. Rekve said.
A helicopter mechanic by trade, he designed a part that he brought to Aero Design when the company was still located in Calgary. Mr. Rekve worked with the company to get the part certified. Then Aero Design's previous owner decided to retire, and Mr. Rekve and Mr. Clarke bought the company, moving it to B.C. and changing its focus from aeronautical consulting to manufacturing.
And as it expands its product range internationally, certification is a continuing process. "We, as a company, are approved by Transport Canada to do manufacturing. So we have that certificate in place," Mr. Rekve said. But other certifications are involved: "Each product we do, on each aircraft type that we work on, has its own certification. That process is actually something we're going through right now."
It also means that Aero Design can only grow so fast, regardless of the dollar. "The potential for growth for us is massive. But if you scale up too fast, it can be uncontrollable, as well. We've owned the company for about three years. And we're just trying to manage the growth so it's done correctly," Mr. Rekve said.
For such a specialized company, the next step is even further specialization. It is developing helicopter bike racks for Airbus helicopters, working with pro biker and guide Lorraine Blancher, and tying that into a separate heli-biking company Ms. Blancher is starting with Mr. Rekve and his wife, Wanda.
But at Aero Design, with the Canadian dollar making the products that much more attractive to some buyers, "we've decided to maintain the focus on what it is we're doing now," Mr. Rekve said.
"We're very strong in the Canadian market. We've tapped into the U.S. We have tremendous growth potential there. And the world, we're just getting into. So the growth potential is actually substantial," he said.