The idea came to Calgary-based Fluid Energy Group’s CEO, Clay Purdy, simply enough. It was March 11th, fear of COVID-19 was growing, and he was out doing the same as everyone else – searching for hand sanitizer.
After going store to store and finding nothing, Purdy shot a few exploratory texts to his Chief Technical Officer, Dr. Markus Weissenberger, asking what was involved in manufacturing this liquid that had suddenly become so valuable and scarce.
He didn’t know it at the time, but that simple question would have a massive impact on the company he leads.
“The lab immediately started looking into sanitizer and quickly we recognized that we had major pieces in place to make this a viable addition to our product lines. We also had the contacts and distribution network to launch it in short order,” says Purdy.
Traditionally, Fluid mainly specialized in producing environmentally responsible, advanced chemical systems for a variety of uses within the oil and gas sector. They had business with customers in North America, the North Sea and the Middle East, among other markets. They also had Triton Cleaning Products, a sub-division specializing in cleaning solutions for RVs, marine and industrial uses like concrete truck wash.
Fluid already had a blending room where they could mix flammables, a license to buy specially denatured ethanol, an ethanol supplier relationship, and a relationship with packaging suppliers - all key requirements for producing hand sanitizer.
From idea to reality
There were still significant hurdles to overcome, however, like meeting government regulations. But Fluid was quick to check those boxes, so quick in fact that when the government started offering emergency licenses to produce sanitizer, Fluid was the second company in Canada to receive one.
Within two weeks of Purdy’s text to his CTO, Fluid was producing sanitizer that met World Health Organization (WHO) and Health Canada standards.
They also had a buyer. Canadian Tire already stocked Triton Marine products, and now like many retailers, was looking for more sanitizer to sell. Fluid did a pilot run with an outlet in Calgary and when that went well, started selling sanitizer (under the Triton name) to stores across Canada.
Soon after that, an even more high-profile buyer emerged.
“Months before the pandemic hit, we’d created a small government relations team,” says Purdy. “That ended up being well-timed because when the call went out to Canadian businesses to procure mass amounts of sanitizer, we were able to engage with the right people at Health Canada and other government offices to promote our abilities,” says Purdy.
In mid-April, Fluid received a federal contract to supply 10-million litres of sanitizer for use in hospitals and other government purposes. This would require seriously ramped up production. And that’s where EDC was able to help.
“We’d been working with Fluid Energy for a number of years and knew they had the ability to take on a challenge like this,” says Shaun Naidu, EDC’s Account manager for Fluid Energy.
“From the beginning, EDC’s role in the pandemic response had been to bring liquidity to the market and support companies as they navigate this crisis. By making sanitizer, Fluid would not only help their own business, but also help in the effort to fight the spread of COVID-19. We were excited to support them.”
To produce millions of litres of sanitizer, Fluid had to put in large orders for key inputs, such as ethanol for the sanitizer and bottles for packaging.
EDC helped by guaranteeing letters of credit (LCs) issued by Fluid’s bank to its suppliers, through the Account Performance Security Guarantee program. LCs are key for negotiating favourable terms with suppliers, but to get a bank to issue them requires a company to commit cash or credit as collateral. The APSG minimizes that collateral requirement, freeing up capital.
Fluid also tapped EDC’s Export Guarantee Program. Through it, EDC can guarantee the majority of a loan or line of credit provided to a company by its banking partner. With EDC now sharing in the risk, it gives the bank extra comfort knowing that they’ll be repaid, and it can encourage them to lend more if needed.
“Getting the financing in place so quickly was key for us to be able to supply this mass quantity of product to the government in an expedited manner. Without it, we would have had to look at other financing options which would have delayed the opportunity to make a real and timely difference in the fight against COVID-19,” says Purdy. “With the continued support of EDC and a now very strong financial position, Fluid is well positioned to pursue and execute on large, longer term contracts going forward.”
Fluid has now supplied the full 10-million litres of sanitizer to the government, and its new product line now accounts for a major portion of revenue, overtaking its oil and gas sector business. The company is also starting to roll out new sanitizer options (like gelled versions) and making all the necessary investments to make sanitizer a permanent offering.
Fluid is also diversifying into surface disinfectants as well – the products used to disinfect chairs, tables, desks etc. It already offers three of these products with more launching soon, some of which are unique to Fluid and have patents being developed by their large R&D team in Calgary. According to Purdy, the global hand sanitizer market is around $5 billion and growing, whereas the disinfectant market is around ten times that size.
“Since March we’ve been building a solid foundation under this new pillar of our business, all with the goal of meeting global demand over the long term. We now have very robust US-based business with additional progress across Europe and the Middle East,” says Purdy.
Fluid is also adding several full-time, high paying positions - an estimated 40 by the end of the year. These have been created in the laboratory and quality assurance/quality control division alone to manage their 24/7 operations, as they move to become a Good Manufacturing Practices (GMP) Certified facility.
“Like everyone else, we hope this virus goes away as quickly as possible, but even after it does, we think that people will continue disinfecting and sanitizing at much higher levels than before COVID-19. People are much more careful now, and we want to make sure they have what they need to feel safe.”