Going global is the way to grow.
That's the message business leaders have heard time and again from analysts, advisers and even most persistently from Canada's central banker, Mark Carney.
But if the message still hasn't sunk in, this year's list of the fastest-growing enterprises in B.C. is local proof that expanding into new markets and tapping global opportunities are paying off handsomely.
More than half of the companies on Business in Vancouver's 2012 list of the fastest-growing companies in B.C. had national or international operations. And it's these businesses that experienced some of the most rapid top-line revenue growth over the past five fiscal years.
Overall, the average rate of revenue growth for the companies on the list was a staggering 1,543%. While the top 10% of the list contributed the most to the overall average, most of the companies posted revenue growth of between 100% and 500% over the past five years.
The mining sector has experienced some of the fastest growth from a revenue standpoint. The 21 mining companies on this year's list posted an average revenue growth rate of 4,230% between 2007 and 2011. The bulk of these companies have operations all over the globe.
For some companies, much of that growth can be attributed to projects that entered production after being explored and developed for years. Such has been the case for this year's top company, China Gold International Resources (TSX:CGG), the latest in a string of mining companies to take top spot on BIV's list. The company, formerly called Jinshan Gold Mines, has had production ramp up at its CSH gold mine in northern China, around the same time as the price of gold starting hitting new records. The consequence has been rapid revenue and net profit growth over the last half decade.
Other gold companies have experienced the same brilliant fate, including B2Gold Corp. (TSX:BTO), which ranked third on this year's list, Nevsun Resources (TSX:NSU) (fourth), Eldorado Gold (TSX:ELD) (24th), New Gold (TSX:NGD) (27th) and industry heavyweight Goldcorp (TSX:G) (73rd), which more than doubled its revenue over the past five years.
More than a quarter of the list consisted of rising stars in B.C.'s technology sector. These companies had an average five-year growth rate of more than 1,450%.
The fastest-growing tech company on the list this year was Vancouver's high-resolution video surveillance system developer Avigilon (TSX:AVO), which moved up to second place on the list overall from third last year. The company has managed to virtually double revenue over the past few consecutive years and has become increasingly profitable in that same period of time.
But the company's growth plans are far from over. Alexander Fernandes, Avigilon's founder and CEO, told BIV the company has a goal of hitting $500 million in revenue by 2016, or a further 733% above 2011's revenue.
Tapping the growing market and demand for high-definition surveillance systems will be key for the company's plans.
"The main catalyst for growth is really the fact that we're attacking a very, very large market where there is an unmet need," said Fernandes. "Last year's spend globally was $16 billion, and it's going to nearly double to $29 billion in 2015. Last year, we would have been less than 0.5% of the global market and by 2016, to be at $500 million, we just need to triple our market share."
Fernandes is "playing to win" and has set up the company with scalable business systems. "One key lesson I've learned is you've got to put in the systems before you actually need them, because if you try to implement it when you need [it], you've already lost because the worst time to implement an enterprise system is when you need it."
To maintain its growth trajectory, the company recently raised $27 million in additional financing to bolster its balance sheet and increase its working capital. Fernandes said the funds should be enough for the next two year's worth of growth for increased inventory and better service its clients.
And while Fernandes plans to grow the company into one of the country's leading technology companies, much of Avigilon's key operations will remain local, including its research, development and manufacturing. Aside from avoiding the risks of stolen intellectual property, Fernandes noted the company has benefited from better quality control and more rapid prototyping by keeping key functions in Metro Vancouver.
While staying local, Fernandes is focused on tapping the global market for the company's products. While half of the company's sales in the first half of 2012 are in the U.S., the company continues to increase its revenue in other regions of the world, particularly in eastern Europe, the Middle East and Asia.
"The world is increasingly going global, so if you're not thinking that way, you'll get squashed. But [in our market], we're running the steamroller."