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CanadExport is the official source of news and advice on trade and investment opportunities around the world, for Canadian entrepreneurs who want to compete, partner and prosper in the global marketplace.						CanadExport Vol. 25, No. 2 (PDF)

Trade News

January 12, 2007

Canadian wood-frame houses find markets overseas

The list of manufactured goods exported from Canada has a small but growing entry: wood-frame houses.

Countries around the world are coming to appreciate Canadian expertise in the construction of wood-frame houses, housing technology and energy efficiency. The result is a growing demand for that expertise in the form of pre-engineered homes, and DAC International Inc. of Carp, Ontario, is finding success entering international markets with its products.

A DAC International home in Easton, Maryland.

DAC designs, prefabricates, ships and erects wood-frame homes around the world, from one-of-a-kind dream homes to large-scale residential developments. The company’s hard work has generated results, with DAC exporting more than 700 housing units to the U.S., Japan and the U.K.

“Canadians don’t realize how valuable their expertise in this area really is, but other countries recognize it, and they’re interested,” says Jeff Armstrong, the company’s president.

DAC began more than 20 years ago as a general contractor, building custom homes in the Ottawa Valley. Infused with Armstrong’s interest in energy conservation and a build-it-to-last philosophy, the company was doing well, Armstrong says.

But on a trip to Poland in the early 1990s, Armstrong found great interest in Canadian housing products and know-how and determined pre-engineered manufacturing would be a commercially viable way to export housing technology.

“We didn’t begin life as manufacturers, we brought our expertise as builders indoors,” Armstrong says, essentially reverse engineering the building process. With a product in place, attention turned to the challenge of international marketing.

“It was pretty lonely at the beginning,” says Armstrong. “We didn’t know how well the business model would work.” DAC persevered, however, and the company was well-positioned when Natural Resources Canada launched a drive to market Canadian energy-efficient technology to foreign markets by re-branding its R-2000 initiative as Super E housing.

“R-2000 encapsulated the way were already building houses,” Armstrong says. Canada Mortgage and Housing Corporation (CMHC) International came on board to promote Super E. CMHC International provides assistance with market intelligence in the housing industry and helps to find local partners for Canadian companies.

In 1999, DAC built one of Japan’s first Super E houses and has built dozens more since. Recently the company completed delivery of a seniors’ facility in Toyota City, demonstrating the application of Canadian wood-frame expertise to large-scale projects.

Armstrong says that in retrospect, his company might have been able to take advantage of even more opportunities in the early years if DAC had greater resources behind it. DAC was built from the ground up and didn’t have sufficient capital to expand to meet demand. In 2005, the firm was acquired by the KOTT Group, a large Ottawa-based building material supplier and manufacturer that was very supportive of DAC’s export agenda.

“We’re no longer a niche performer. We needed to get stronger and we set out to find a sound partner who shared our vision,” Armstrong says. About 90% of the company’s business is export.

Armstrong’s advice for those considering international markets is to take full advantage of existing information. Much of what needs to be known about housing export is freely available, he says, and absorbing it reduces risk considerably.

“You’ve got to learn as much as possible about the environment you’re going to be working in. The differences in the business culture from Canada may be subtle but they’re important. There’s a steep learning curve in every market.”

He also recommends seeking the assistance of agencies such as Canada Mortgage and Housing Corporation, and contacting the commercial officers at consulates and embassies in the market you’re entering.

Armstrong has praise for the quality of the people whose job it is to expand Canadian export opportunities.

“The people at CMHC and in the foreign service are very helpful, bright and able. Don’t try to go it alone, get the benefit of the experience at CMHC and Foreign Affairs and International Trade Canada.”

For more information, visit CMHC International website.

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