Small towns are no barrier to overseas sales

Niru Somayajula was recently named CEO of Sensor Technology Ltd., a Collingwood, Ont.,-based maker of ceramics-based sensors and hydrophones used for military defence and communication operations, oil exploration and marine biology projects around the world.

The only child of immigrant Indian parents who originally founded the business as a high-tech division of Blue Mountain Pottery in 1983, Somayajula, 30, grew up with the company and has watched it expand from a small, single factory operation to a three-building plant with 44 employees.

Niru Somayajula, CEO of Sensor Technology Ltd.

“It has grown in 27 years,” says Somayajula, who holds a master’s degree in mechanical engineering from the University of Toronto. “We are now pushing to grow even more, expanding into Europe, which is my initiative, what I’ve been developing since formally joining the company in 2007 to enable my parents to ease into retirement.”

Taking her company global requires much foreign travel to persuade clients who are skeptical about doing business with a small-town Canadian operation such as hers. “It’s cultural,” says Somayajula, who is married and expecting her first child in the spring. “People like to work with their own. We need to convince people we’re an alternative source.”

When and why and how did you first start expanding outside Canada?

We started exporting right from the very beginning. Due to the niche market of the types of things we make, we were forced from the beginning to export our products. Hydrophones, which are essentially underwater communication devices, are used by such a small percentage around the world. Our customers are in the fields of oil exploration, in defence and other military operations. Our products are used on submarines and by fisheries who put our sensors inside nets to make sure they’re wide enough. We also make commercial probes for listening to dolphins and whales. You don’t find much of that in Georgian Bay, if you get my meaning.

What’s your primary market?

Fifty per cent of what we do is in the field of oil and gas exploration and monitoring. The rest is taken up by fisheries and military and defence and other commercial interests rather evenly, about 15% each.

What challenges do you encounter when exporting your product?

The kind of exporting we do is very regulated; the rules are very strict. We need sometimes to obtain export permits to ship products, and if we don’t have a permit and our product is at the border then the government can shut us down. Why that can sometimes be problematic is that it requires asking the customer what they plan on doing with our product, and often they don’t want to tell, especially if they’re military and it’s supposed to be top secret.

You say you travel a lot for business. How often?

Over the past couple of years I have personally done most of the trips. Face-to-face contact is really important to us and our clients. We meet potential new customers at trade shows around the world. We generally attend one to three trade shows a year to try and get our name out. On top of that, we make it a point to visit our customers at their facilities. What we make is generally a small component of a large system, and we find that seeing how the client implements our products is important for the suggestions we make to them in terms of design and use. In any given year, I will make anywhere from six to 10 trips to see customers, excluding trade shows. Last year, we travelled to both ends of Canada, along with a trip to both the eastern and western seaboards of the U.S. We also visited customers in France, Switzerland, Norway, Japan, and the UK.

Does a strong Canadian dollar hurt or hinder?

The strong Canadian dollar definitely hinders us. Many of our customers, American or not, prefer to do business in U.S. dollars. For long-term contracts, we are stuck with pricing for multiple years, and this has caused us much financial grief.

Do you have a foreign office?

We do not have any foreign offices. We do, however, employ agents that usually work on commissions that are located around the world that try to promote our business on our behalf. We have been successful with agents in France, the U.S., Japan and India.

Biggest surprise?

When I first made the decision to move home to run the family business, I had no idea that I would be learning a little bit about every portion of the business. I think that is really what can make or break a person trying to start or run their own business. My biggest surprise was that I really enjoy this type of work. I never believed that I would be happy moving home to small-town Ontario, but I am constantly surprised by how much I love both my job, my lifestyle and my community.

What would you tell others in your shoes to do?

I was given some very wise advice from a lady with experience under her belt–my mother. She told me: “she who controls the money will eventually control the company.” She was right, and in different ways. By managing the finances at SensorTech, I see every aspect of the company at the bare-bones level. I see money as it comes in, gets spent, and goes out. Managing money is often something overlooked by entrepreneurs, especially the highly technical ones. But it can be a real insight into your company without having to talk to a soul. We have very competent accountants and lawyers who have guided me every step of the way, but by knowing what’s happening with the money, I feel I have better control on the day to day of the company.

Not to do?

Sacrifice your health for your company. The long hours and the travel can take their toll, and it’s important to find the things that give you peace and balance.

Anything else to tell Canadians about taking their business abroad?

My experience working with foreign customers is that they often feel more comfortable working with their own. It’s important to do your research about culture, customs and the countries abroad. While Canadians are generally well received abroad, especially compared to our neighbours to the south, it’s still important to make sure your customers are comfortable doing business with you. We make it a point to educate our customers about Canada, talk about our culture, and show them in person that it’s a great country to deal with. Through these out-of-office interactions, it’s often discovered that there are many similarities between the cultures that you didn’t realize, and this goes a long way in doing business.