Are difficult markets worth it?
This week’s Ask the TCS column features a company looking to sell its door products in Iraq and Afghanistan and is looking to make the right contacts. But is doing business in the region worth the risks?
Dear Ask the TCS,
Our company, Tru Tech Doors, is looking to establish contacts in our efforts to rebuild Iraq and Afghanistan. We manufacture a wide variety of doors and door products for use in residential and light commercial applications.
Thanks for your time and we appreciate your efforts on our behalf.
Sincerely,
Chris Sexsmith
Tru Tech Door Products
Toronto, Ontario
Dear Mr. Sexsmith,
Iraq is a market with a lot of potential for Canadian companies in sectors such as building products, oil and gas, agri-food and heavy machinery. It is, however, a very challenging market for obvious security reasons but also because of important differences in business culture.
Canadian companies interested in doing business in Iraq are encouraged to do so in partnership with a local company that has the knowledge of the market, and above all, the right connections in the Iraqi government. Take time in selecting a partner for the development of your business in Iraq and make sure the division of obligations and rights is clear. And remember, being successful in this market will likely require more than one visit.
Ask the Trade Commissioner Service
If you are a Canadian entrepreneur and you have a business-related question, ask us! We might even post your question and the answer on our website. (We'll ask you first of course.)
Iraq is still trying to rebuild its economy and its political infrastructure, as well as its business environment and legislation. However, there is still a lot of work to be done and Canadian companies entering this market need to be aware and ready to enter a world where cash payment is the norm and transparency is often lacking. With any contract be sure the financial arrangements satisfy your requirements for risk mitigation.
Companies that have been able to find the right partners and have used caution in their approach have found some success. Others face significant financial and legal obstacles. Companies with no flexibility regarding terms of payments and with limited resources should approach Iraq with caution.
That said, the Trade Commissioner Service can provide market assessments and help with finding qualified contacts. For this, we called on Alan Ballak, Trade Commissioner at the Toronto Regional Office of the TCS. Alan has several sources that could be helpful.
The first is a Middle Eastern builder who is active in Iraq, Iran and Afghanistan. This builder is an active member of the Canada Kurdistan Business Council and has an office in Iran. In fact, this builder is bringing an Iraqi/Iranian/Afghan business delegation to Construct Canada, an international building and construction fair coming up in December. If you can attend, Alan may be able to arrange business-to-business meetings with members of this delegation.
Also, the Kurdistan Regional Government in Iraq has consultants active in the Toronto region. These consultants are often looking for suppliers and joint venture partners for various construction projects and Alan could arrange to meet these contacts as well.
You should also get to know the Trade and Investment Services Alliance, or TISA, which is a network of professional service providers based in Toronto that works to develop international business opportunities for Canadian companies. TISA often works closely with federal and provincial government partners. Alan says his sources at TISA have a detailed understanding of the markets in Iraq and Afghanistan and can give you a detailed briefing on the market potential of your company in the region.
Good luck Mr. Sexsmith and don’t hesitate to call on us for additional support.
The CanadExport Team
tradecommissioner.gc.ca
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