Pacific Region winner: Mining the Middle Kingdom

Written by Chris Atchison

Company: Bioteq Environmental Technologies Inc.
Location: Vancouver
What it does: Develops waste-water treatment plants and technologies for the mining industry

Some export strategies are born of diligent deliberations, careful planning and surgical strategizing — others of good timing and the right connections.

The latter was the case for Brad Marchant, CEO of Vancouver-based Bioteq Environmental Technologies Inc. Founded in 1998, the firm builds and operates plants that treat metal- and sulphate-contaminated water produced by acid mine drainage and mineral processing. Back in 2003, Bioteq’s annual revenue hovered at slightly more than $1 million, all derived from domestic sales.

But Bioteq’s export fortunes soon changed after Marchant described his company’s technology over lunch to an old friend and senior employee of Phoenix-based mining firm Phelps Dodge (now part of Freeport-McMoRan Copper & Gold Inc.). Marchant’s friend was floored to learn that sales of the metal recovered using Bioteq’s technology can significantly offset the cost of government-mandated water treatment and long-term waste disposal or, in some cases, cover the costs of building and maintaining Bioteq’s treatment plants, which typically occupy half the area of a soccer field.?

That conversation resulted in Bioteq’s first foreign sale, which in a year more than doubled the firm’s revenue. Today, the company boasts a global staff of 57 and customers in the U.S., Mexico, China and Australia. These new customer bases helped Bioteq triple its export revenue between 2006 and 2008, when it achieved foreign sales of $6.3 million on total revenue of $7.8 million.

“When we started to export, that’s when our sales really started to take off,” says Marchant. “Canada’s a little bit more risk-averse to technology. Other areas of the world, like the U.S., China and Australia, are technologically aggressive.”

That’s not to say that Bioteq’s success came easily. And typical exporting challenges are even more pronounced in China, one of the company’s early export targets.

“It took us a while to realize that you shouldn’t do business in China; you should do business in a very small part of China,” Marchant says. By bolstering research efforts and focusing on Jiangxi province, a centre of copper production where water-treatment rules were beginning to be enforced, Marchant and his team identified a prospective customer in Jiangxi Copper Co., the largest mining firm in the region. Lacking the contacts that are so crucial to doing business in China, Marchant hired a Chinese environmental-engineering graduate of the University of British Columbia to knock on doors in and around the would-be customer.

Some of those doors opened, leading eventually to Jiangxi Copper’s head of engineering and subsequent presentations to key executives. And in those meetings, representatives of International Trade Canada and the National Research Council helped Marchant sell Bioteq’s unique technology. “The Canadian government’s credibility factor around the world is a lot greater than people think,” Marchant says. “To have the government of Canada stand by your side while you’re making your presentation in a foreign country is hugely beneficial.” Bioteq also recruited the Canadian Trade Commissioner Service to locate reliable suppliers, law firms and recruiters who had worked with Canadian companies in the past.

Employing these tactics helped Bioteq close a deal with Jiangxi Copper in 2007 to the tune of $4.2 million in plant-construction fees and $2.5 million in recurring annual revenue, which Bioteq collects as part of its fee-based water-treatment services.

While many Canadian exporters try to manage overseas business from their offices at home, Marchant quickly staffed up in China with locals who are well versed in Chinese business culture. They’ve been crucial, not only to maintaining Bioteq’s lucrative Chinese business but also to freeing Marchant and his team to direct their attention to other export markets. Bioteq is applying the business lessons learned in China to other countries with large mining operations and water-protection laws similar to Canada’s, and to great effect: the company’s annual revenue grew by 72% between 2006 and 2008. Bioteq’s successes on the world stage have also earned the firm the 2009 Canada Export Achievement Award for the Pacific Region.

Next, Marchant plans to develop new customer relationships in his existing markets and apply Bioteq’s technology to oil sands and power-generation applications in China, Canada and the U.S.

Sara Elford, a Halifax-based sustainability analyst with investment-research firm Canaccord Adams Inc., puts Bioteq’s growth potential in perspective: “They’ve brought a solution to an industry that has global operations and specific problems only they can address.”

Sounds like the sky’s the limit. Not bad for a company whose customers work underground.

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