In 2006, when Karen Keebler joined Pure Technologies Ltd.—a leader in the development and application of technologies for inspection, monitoring, and management of physical infrastructure, headquartered in Calgary—the company was generating about $8 million in revenue annually.
Today, that figure has grown to nearly $80 million, and Pure operates a dozen global subsidiaries. Such rapid expansion into far-flung international markets has created new financial and legal complications for the company, but as its CFO, Keebler (along with her staff) works to rein in its operations and logistics across the globe.
The regulations and customs for doing business in North America are fairly consistent, but across any major body of water lies a mess of differing laws, traditions, and trade agreements that can tie up even the most straightforward tasks.
“Years ago, we could go in-country and do a job fairly easily because we saw it as a one-off opportunity,” Keebler says. “Today, though, we’d rather maintain a continued presence in our markets. And my group does a tremendous amount of work toward getting Pure Technologies established in those areas. We’re an integral part of the team in expanding our markets.”
The primary task of Keebler and her team is developing the proper corporate structure for each of Pure’s overseas operations. “That includes everything from the legal, tax-structure, and contract-compliance points of view,” she says. “Most of our business in water and wastewater is with government agencies, and they have a lot of specific requirements.”
The company’s first step is assessing an area’s potential. “We assess an area in terms of the technology we can bring to the situation, but we must also assess whether it shows the potential to meet our targets,” Keebler explains. “We like to see growth of 50–100 percent annually for about five years, with margins above 60 percent.”
Securing such contracts involves more than presenting a bid. There are numerous hurdles to overcome first, including local statutes and customs.
“In New Zealand, for example, a company must be a legal entity in that country before doing any work,” Keebler says. “In the Middle East, you must have a ‘trade sponsor’—such as a joint venture with a native company.”
Such arrangements are handled by a representative local legal practice that’s accustomed to working with North American firms. “Our legal department will work with that law firm to examine possible tax and legal options based on what we want to do and how it intends to proceed,” Keebler says.
Keebler adds that the overseas legal partner must acknowledge that Pure Technologies is obligated to comply with all Canadian and US anticorruption laws. It can be a sticky situation because in many developing countries bribery can be commonplace. Pure finds many opportunities in areas that have high levels of official corruption, “so we have to review all of our processes and practices to ensure everything is aboveboard,” Keebler says. “And when we hire subs, we must be sure they’re in compliance as well. At times, we could be held responsible for their misbehaviour.”
Keebler and her staff also address varying tax structures and employment options. National and intercompany trade agreements, tax laws, and treaties can impact logistics and cash flow. And some countries insist on the hiring of a certain percentage of local labour, so Keebler helps determine whether it’s more beneficial to bring native workers to Canada and the US for training than to send North American employees overseas.
The final step is transportation and ensuring the easy flow of equipment across borders. “We focus on going through commercial hubs when shipping,” Keebler says, “so we’ll need to consider what duties we might have to pay, and we want to be sure nothing gets tied up for months in customs.”
It’s enough to make one’s head spin, but it’s all necessary for the company’s growth. “Pure Technologies wants to partner with municipalities for long-term programs rather than just performing a simple, one-off service,” Keebler says. “Even when we’re working on a relatively small project, we also look out for other problems and then lead the way in presenting possible solutions to the local government.”