2011 Exporter of the Year: Kudu Industries
When Hans Gjerdrum moved to Canada in 1967, he didn’t plan on staying long. “I was going to stay here for one year minimum, five years maximum,” he says. But the affable Norwegian remains to this day.
Well, sort of. As vice-president of international business development for Kudu Industries Inc., Gjerdrum spends an awful lot of time abroad, especially in the winter – up to half of every year. Avoiding all the snow and ice might sound appealing, but Gjerdrum often leaves the province for even colder climes. “Sometimes I leave Alberta in the winter and I go to Siberia,” he says.
At least some destinations, like Muscat, Oman or California, offer a little more sunshine. Gjerdrum has travelled everywhere that Kudu does business, which makes for an impressive collection of passport stamps: Russia, Romania, Kazakhstan, Australia, Bahrain, India, Venezuela, Mexico, the United States and more. The list demonstrates the impressive globe-spanning reach of the family-owned oil and gas manufacturer.
It also highlights the size of Kudu’s competitors. Kudu manufactures progressing cavity pumps, or PCPs, which can suck everything from heavy oil to coalbed methane out of the ground. (The company takes its name from the horns of a genus of antelope that resemble the rotor of one of its pumps.) This matches the company up against oil and gas Goliaths like Weatherford International, Baker Hughes and Schlumberger, the world’s biggest oilfield services company. Kudu gathered more than $90 million in revenue last year, and should finish higher in 2011. Not bad, though it’s less than one-tenth of Weatherford’s revenue in the same year, and amounts to a whopping third of a per cent of Schlumberger’s 2010 income.
How does the comparatively small Kudu compete with firms many times its size? Greg Jardine, executive director of the international and intergovernmental relations branch of the provincial government, thinks invention plays a large part. “They invest a great deal of money and research into their product to maintain its high quality and innovative nature,” he says. “They’re truly an international company.”
Kudu holds more than 25 patents and, unlike its larger competition, focuses exclusively on progressing cavity pumps. It also consults closely with customers to develop new products that will meet their demands and generate sales for Kudu.
The approach seems to pay dividends. Jennifer McMurtry, Kudu’s marketing manager, is quick to point out that the company regularly comes a close second to Weatherford for the coveted global market leader position among PCP providers. Kudu sells about 5,500 pumps a year. In 2011, it opened new service centres in Romania, Kazakhstan and California and a new office in Perm, Russia, as well as expanding one of its three Australian service centres.
Gjerdrum says the biggest challenge facing the company these days is finding the manufacturing capacity to get everything built and shipped in time – “A good problem to have,” in his words. Another continuous concern is the challenge of cultural literacy. Different places do business differently, so maintaining effective relationships across a cosmopolitan customer base isn’t easy. “It’s very difficult to find individuals who have the capability to navigate the cultural norms and practices of a place like Kazakhstan,” says Jardine.
Kudu takes a multifaceted approach to dealing with the challenge. First and foremost, it exercises due diligence when it comes to research. “Before we go into a country, we do our homework,” says Gjerdrum. “We don’t just go to the airport and buy a ticket.”
Kudu also targets locals in its recruiting, both for work abroad and in its Calgary office. And it offers extensive training to international customers to make sure their pumps operate safely and effectively. “Internationally, it’s a huge educational curve. They are not used to progressing cavity pumps,” says McMurtry. “That’s really where our staff excels. They go in there and they really work with the customer.”
Commercial cultural fluency is a definite challenge, but Gjerdrum appreciates the variety it brings to his work. “The business culture is so different in all these markets,” he says. “The product stays the same. The challenge becomes being close enough to the customer to provide the service that’s needed to go with the product.”
Kudu isn’t the biggest player on the field, but Jardine still considers them industry leaders. “They’re truly an international company, on par with any other manufacturer in the province,” he says.
Gjerdrum puts it a little differently. “For a small Calgary company, I think we’re often playing in the big league. It’s exciting to play in the big league, but you really have to be on your toes.”
This article originally appeared in the December 2011 issue of Alberta Venture.