Chinese fire manufacturer’s new $30m plant in Quebec to target U.S. market

But analyst says developing distribution channels could pose a problem
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Monday, September 22, 2014

SAINT-BRUNO-DE-MONTARVILLE, Quebec—A Chinese fire manufacturer plans to build a $30 million new plant in this city near Montreal next year. However, its plan to eventually target the U.S. market could face challenges, according to an industry analyst.

“I think it could be hard for them to set up distribution,” Justin Siller, manager, security and building technologies, for IHS, a Colorado-based market research company.

He noted that the fire alarm manufacturer, Maple Armor, would be competing against well known and trusted American brands that have “huge distribution channels [through integrators and other distributors] … to get to the end users. That’s the way really to get to this market.”

For Maple Armor “to develop those channels, I don’t think is going to be an easy solution overnight,” Siller said.

Maple Armor announced in August that it planned to open the 70-employee plant by the end of 2015. The full name of the company is Solutions D'alarme Incendie Maple Armor Canada, and it’s a division of Beida Jade Bird Universal Fire Alarm, a subsidiary of the Chinese company Beida Jade Bird Group.

The plant “will build components for fire alarms, such as control panels, sprinklers and heat and smoke sensors,” according to The Gazette, a Montreal newspaper.

Initially, about 70 percent of its products initially will be shipped to China because of a strong demand for certified alarm products there, according to the company and news reports.

But the company eventually plans to target the U.S. market, according to Marilie Beaulieu-Gravel of CNW, a Canadian-based commercial news release service. She is handling publicity for the announcement of the plant’s construction.

Marketing for selling in North America, “is part of the plan for the future, but it’s not a done deal at the moment,” she told SSN.

Company officials were not available for comment but The Gazette reported that Weimin Cai, president of Beida Jade Bird Universal Fire Alarm Devices, said the company is targeting the U.S. market, but that building in Quebec offered more of a sure investment perspective.

“We think we can meet the U.S. demand from here,” The Gazette quoted Cai as saying. “China’s relations with Canada are very good, but sometimes China-U.S. relations suffer.

Beaulieu-Gravel said building the plant in Canada is “a way to start to be in North America.” The company also plans to sell in the European market so a plant in Quebec is a “good link” to that, she said.

Why not build the plant in China and export from there?

The Gazette reported that a major reason the company chose to build in Canada is that it “has a certification process that meets stringent international norms for the alarm systems.”

The plant would cost more to build in China because the process for certifying fire alarm systems is complex there, the newspaper said.

Beaulieu-Gravel said, “Canada has a world-recognized certification. It’s easier to [get] this certification in Canada, than if we asked the person who gives the certification to go in China. … [The goal is] to have the best product possible with the certification that goes with it and to sell that to the world.”

Also, The Gazette said, by building in Canada, the Chinese company is eligible for NAFTA. In addition, a Quebec government agency, Investissement Québec, is contributing $4 million in grants and interest-free loans to the cost of the $30 million plant, news report said.