There’s no denying that hard work and perseverance are the backbone of success for Canadian exporters, but being in the right place at the right time also helps, as Scott Forbes discovered in 2011.
The president, CEO and co-founder of Langley, B.C.-based International Play Company (iPlayco), a manufacturer of premium-quality, durable indoor playgrounds for children, was at a trade show in Saudi Arabia. The global financial meltdown that started in 2008 was still hurting. iPlayco’s annual sales were down to $8 million.
Also at the trade show were representatives of a Saudi company who knew of Forbes. At the request of the company’s owners following the trade show, Forbes helped create Billy Beez, a chain of soft-play children’s entertainment centres themed around a family of active and friendly honey bees that live in the rainforest.
The Saudi businessmen were impressed with iPlayco’s initial Billy Beez offering, and Forbes won a contract to build several other entertainment centres for the company. That led to more work and eventually to his client, FAS, purchasing shares in iPlayco.
Since it was established in 1999, iPlayco has sold more than 2,800 playgrounds to clients in 50 countries. Sales last year reached $17 million, up 4 per cent in 2015, with 90 per cent of sales revenue coming from exports.
iPlayco’s accomplishments include the 25,000 square foot Billy Beez family entertainment centre in Al Khobar, Saudi Arabia, which is ranked as the world’s largest indoor soft-play park.
In 2014, iPlayco won the BC Export Award for Manufactured Products, an accolade presented by the B.C. government and the B.C. division of Canadian Manufacturers & Exporters.
Forbes points out that competition in iPlayco’s sector can be stiff, with some Asian-based manufacturers offering what appear to be similar products at lower prices.
“We have several differentiators,” he adds. “One is our liability insurance. We carry one of the highest liability policies available and to get that coverage we need to focus very clearly on our quality controls. We pride ourselves on offering a high-quality product and the best liability coverage available.”
iPlayco has also been successful in adapting to a rapidly-evolving market. Before co-founding iPlayco, Forbes was with a company that provided seating and décor for clients like McDonald’s and Burger King.
“We started seeing the first playgrounds pop up in McDonald’s and other restaurant chains and felt that it was an interesting product and a market that we could get into,” he says. “We thought we could do something unique by offering a high level of customer service and expertise.”
iPlayco’s initial export market was the U.S., where its clients included restaurants that could offer parents a place to let their children play while they had a meal. Then larger family entertainment centres started to emerge and iPlayco saw the opportunity to expand.
“The market has continued to evolve since then,” says Forbes. “In many cases we are looking at an indoor theme park as opposed to a playground and a snack bar. A lot more goes into them – different equipment, redemption games and so on.”
The changing market brought new challenges to iPlayco. The size and cost of many of the playgrounds it is now building for clients meant the payment model it used previously was not always suitable for some larger contracts.
“It’s typical in our industry to get a 50 per cent deposit upfront and the balance on shipment,” says Forbes. “That’s fine for contracts of $100,000 to $200,000. But when the value goes into the millions, clients are not prepared to pay everything up front. They want flexibility. Some even want to be operating before they start paying.”
The solution for iPlayco was to work with its banking partner, HSBC Bank, as well as Export Development Canada (EDC) to set up trade financing and insurance for its larger contracts.
Chief Financial Officer Max Liszkowski says access to trade financing can be a significant advantage.
“As far as we know, no one else in our industry does this,” he says. “It can be very helpful when it comes to competitive bids. If we can pull out a card and say: ‘If you’re going to order this much from us then we can work with you on the terms,’ it could be a key factor in winning the bid. Of course we also need to have a very creative solution to the client’s needs, but the financing can be a decider.”
Get more export insights from Scott Forbes here.