VOLUME 1 – NUMBER 3 – SPRING / SUMMER 2006
E X P O RTAT I O N
Cycles Devinci:
aluminium bicycles that will go far...
Félix Gauthier, Cycles Devinci
When Félix Gauthier acquired Cycles Devinci in
1990, the company was in difficulty. But Gauthier
had a dream: to manufacture the best bikes in the
world. We’re talking aluminum bikes of course,
since the company was founded in Chicoutimi,
in the heart of the Aluminum Valley. Today, Cycles
Devinci is one of the two Canadian companies that
manufacture aluminum frames.
Félix Gauthier quickly understood that to succeed,
he had to go beyond hand-crafted production and
adopt the way of innovation and new technology.
For two years, he worked at developing an industrial
manufacturing process that would enable him to
produce larger quantities of frames. Then, in 1994,
he created a research and development division.
Cycles Devinci immediately earned a name for its
leading-edge technology, including the instrumented
bike developed in 2002—an experimental prototype
that can collect thousands of data items in real time
on the forces and stresses on the bike. The company
also set up a sophisticated test lab, which uses 3D
modelling technologies.
It’s easy to understand why Cycles Devinci had to
extend its market beyond Québec. Such research
and development efforts have required considerable
resources—$1 million since 2000. It couldn’t generate
a return on its investment without increasing
production and sales. For a high-end product like the
instrumented bike, the Québec market was simply too
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small. So the distribution network, which in 1993
included specialized shops in the province, had to
expand. Since 1996, Cycles Devinci has extended its
network across Canada and attempted to make
inroads into the US.
When it first started to expand, Cycles Devinci
contacted Investissement Québec and obtained a
loan guarantee to help it finance its market development
activities. Investissement Québec then advised the
company on the different financial programs and
products available: financing of working capital for
growth, and financing of tax credits for R&D and for
the Aluminum Valley. “Over the years,” says Gauthier,
“we’ve developed a relationship of trust with
Investissement Québec. They’re very professional
and know our particular situation inside out. Thanks
to them, we’ve been able to finance our expansion
without diluting the company’s ownership. Had it not
been for Investissement Québec, we would’ve had
to find shareholders and eventually transfer some of
the control of the company.”
Devinci bicycles are now available in more than
60 Canadian cities outside Québec and in a number
of American states. Europe is next on the agenda.
If all goes according to plan, the company will be
implementing a distribution network in 2008–2009.
SMBS WITHOUT BORDERS
SMB export projects often involve a higher
level of risk than what financial institutions
are willing to accept. That’s where
Investissement Québec can come in: it can
support quality projects by assuming more
risk than the private sector. And thanks to
the expertise of its professionals, it can advise
executives on the most appropriate financial
solutions for their business. Last year alone,
the agency authorized 112 SMB export
projects, evaluated at close to $45 million.
Investissement Québec’s SMB Financial
program has two components intended for
businesses wishing to expand their markets.
The first component, the Export Credit, is
designed for businesses planning to carry out
a sales, marketing or acquisition project
outside Québec. It enables these businesses
to obtain a repayment guarantee from
Investissement Québec that can cover 50% to
80% of the financial loss assumed by the
lending institution.
The second component, Market Development
Outside Québec, is aimed at businesses
seeking to penetrate new markets or
consolidate their export activities outside
Québec. It provides support in the form of a
repayment guarantee or a term loan for
market development activities such as
participation in trade shows, production of
promotional material, hiring of representatives
or the acquisition of a distribution network.
To find the complementary financing you need
for your export project or market development
outside Québec, simply contact an Investissement
Québec advisor at 1-866-870-0437.
L’Intégral takes on Europe
To break into the European market,
L’Intégral needed more latitude.
That’s what Investissement Québec’s
export credit gave it.
Located in the Lower Laurentians,
L’Intégral specializes in the design
and manufacture of tanning
machines. When it first started up in
1997, the company had only one
model of machine. But, it was
already exporting to the United
States for a group of American
distributors which had contracted
the company to manufacture a
private brand. Today, some 50% to
60% of L’Intégral products are sold
to consumers south of the border.
Innovation and technological
advances have always been central
to the company’s operations. Over
the years, L’Intégral has designed
new products, expanding the line
available. However, the company did
EXPORT TO THRIVE AND PROSPER
SMBs today know that they
can’t ignore globalization and
open markets. In a world
without borders, they have to
take advantage of business
opportunities around the globe.
International trade has become
one of the most significant
determining factors for econo-
mic growth in industrialized
countries. In Québec, the export
of goods and services represented
$88.3 billion in 2004, or 33.3%
of the GDP*.
SMB Solutions ISSN 1715-569X To reach an Investissement Québec advisor, call us at 1-866-870-0437
or write to us at infoiq@investquebec.com
not start manufacturing high
pressure tanning beds until very
recently. “My distributors got their
supplies from other manufacturers,”
explains Alain Lamoureux, President
of L’Intégral. “We wanted to
complete our line of products and
crack this segment of the market
with a machine that was really
different.”
Two years ago, L’Intégral developed
a new concept of high pressure
tanning bed. While doing so, it
scoped out the European market. In
2005, the bed was ready. “Its
distinctive, compact and open
design immediately appealed to the
merchants at the Solaria* trade
show in Germany. “Our bed’s in a
class of its own,” says Lamoureux.
“The lamps rotate around the
person lying down, which gives an
even colour very close to a natural
tan. We’ve been able to compete
Businesses wishing to export and
develop foreign markets must
prepare—first taking stock of
their present resources and
setting clear objectives, then
assessing the potential of the
target markets and choosing a
sound marketing strategy.
Finally, they must determine the
budget needed to achieve the
sought-after results. If financing is
required, Investissement Québec
can propose a financial solution
tailored to the business’s needs.
with the major players, as European
manufacturers have always domi-
nated this market. But we’ve been
the only ones to innovate in this way.”
The machine has attracted the
attention of a number of European
distributors. But to support the
inventory the company needed to
meet the demand and hold its own
against European competitors,
L’Intégral needed funds. “Investissement
Québec granted us a loan guarantee
on the net loss of our line of credit
with the Royal Bank,” explains
Lamoureux. “Without their support,
we wouldn’t have been able to carry
out the project. We’re now negotiating
with British, Polish, Russian and
Chilean distributors.”
“This experience has enabled me to
discover the entire range of financial
solutions that Investissement
Québec offers SMBs. If everything
goes as planned and L’Intégral
expands, I know that Investissement
Québec will be able to help us with
other projects.”
* International tanning product and equipment
trade show held in Cologne from October 27
to 29, 2005.
For more information, contact
one of our advisors.
* Le commerce extérieur du Québec,
January 2006. Ministère du
Développement économique,
de l’Innovation et de l’Exportation
DID YOU KNOW?
In its 2006–2007 Budget Speech, the
Québec government announced several
measures affecting SMBs in Québec.
$425 million for the
forestry sector
A new $425 million program has been
set up to encourage investment and
modernization by businesses in the
forestry sector, including sawmills,
panel manufacturing plants, and pulp
and paper mills. Some $350 million has
been earmarked for loans to exporting
companies that have had to pay
antidumping and countervailing duties,
while $75 million has been reserved
for loans to SMBs.
$30 million more
for FIER-Regions
The government plans to inject an
additional $30 million in the Regional
Economic Intervention Fund (FIER-
Regions). Since Québec matches every
dollar invested by the private sector
with $2 of public money, $45 million
will ultimately be devoted to the
start-up and development of businesses,
primarily in the regions that do not yet
have funds, i.e., Gaspésie–Îles-de-la-
Madeleine, Outaouais, Centre-du-Québec,
Laurentides, Côte-Nord and Nord-du-
Québec.
Tax measures:
online forms
Investissement Québec has just
updated the annual application forms
for eligibility certificates regarding tax
credits for Major Employment-generating
Projects and Biotechnology Development
Centres (CDB), two programs which
underwent a few changes in the new
budget. The forms, now simpler and
easier to fill out, are available on
Investissement Québec’s website, in
the Forms section.
Please note that you’re required to file
your annual application form at the end
of your fiscal year to meet the deadline
set by the Québec Taxation Act. Don’t
hesitate to contact your project
manager for details.
Find out about our other financial
solutions at: www.investquebec.com