Sitting at lunch in Colebrook with Stephane Lefebvre, the manager of Codet’s Colebrook plant, NH business recruiters Michael Bergeron and Benoit Lamontagne talk about Lefebvre’s trip to Boston to see the Red Sox, his daily commute across the Canadian border and his search for employees. Following the conversation can be tough, as it sometimes switches to French. But the conversation is typical for Bergeron and Lamontagne as they try to recruit Canadian businesses to the Granite State.
Codet, a Canadian-based manufacturer of work and outdoor apparel, is among their success stories, having recently invested $700,000 to double its Colebrook factory to 27,000 square feet. It also plans to double its headcount to about 70. This is the largest business expansion in Colebrook in about 15 years and points to the vital role Canada plays in boosting the North Country economy.
The North Country appeals to Canadian companies that must show a Made in the USA label in order to win government contracts. While Codet currently only makes 10 percent of its clothing in the United States, that percentage will grow as it pursues more of those contracts.
Helping businesses like Codet grow in NH and recruiting other Canadian companies south is a big part of Lamontagne and Bergeron’s jobs at the NH Division of Economic Development. This involves trips over the border every few months, including a recent overnight in May (when Business NH Magazine tagged along), and fundraising to cover recruiting costs, which beyond a state car, are not covered in the state budget.
A Delicate Courtship
While Canada is a mere 10 minutes from Colebrook, Quebec is culturally a world away and language can also be an additional barrier. When Bergeron recruits companies from Massachusetts, meetings are all business. In Canada, business is personal, and relationships take time. While it generally takes two years to recruit businesses to move to southern NH, recruiting Canadian businesses to northern NH takes four or five years.
Bergeron and Lamontagne visit prospective companies regularly (sometimes keeping company names off paperwork to maintain confidentiality) and hold dinners and meetings in Canada, bringing mayors of northern NH towns, Canadians already doing business in NH and state officials to tell their stories and answer questions. Dinners can cost thousands of dollars to host.
It’s been more than two years since the last dinner was held—June 2012 in Sherbrooke, Quebec—in part due to the loss of Public Service of NH as a major sponsor. The dinner, which cost $3,350 to hold, attracted 66 Canadian business people and was also attended by five NH officials—including the former commissioner of the NH Department of Resources and Economic Development—and executives of Canadian companies with a presence in NH. From that group, four promising companies were invited to a private dinner three months later at the Mountain View Grand in Whitefield where Bergeron and Lamontagne provided more information about visa applications and available real estate.
One of those four was Alain Boisvert, owner of Abco Inc., a manufacturer of auto parts in Stanstead, Quebec, who was looking to invest in NH. Bergeron and Lamontagne introduced him to Rick Tillotson, who then opened Tillotson Performance Polymers in 2013 in Colebrook with Boisvert’s financial backing. Tillotson now employs seven people there.
A typical overnight trip, like the one in May, which was sponsored by the Colebrook Development Corporation, costs $500. The return on investment was two deals, the second sealed last month with Vaporium, a manufacturer of flavored electronic cigarettes in Sherbrooke, signing a lease in early August for a 7,500-square-foot space. As part of the lease agreement, Vaporium must hire at least 10 full-time NH employees within six months of opening. It took a few years to woo the company here though. The owner, Sylvain Longpre, first heard about NH as a potential place to expand from someone who attended the 2012 dinner. He called Bergeron and Lamontagne, prompting a visit from the duo in 2013 and then again in May before closing the deal.
Bergeron says while Canadian deals take longer, they have better odds. Besides the two deals from the dinner of 66, there are also four solid leads, which Bergeron claims is a good track record. He says 100 cold calls in the U.S. may lead to five prospects and only one completed transaction.
Another person at that 2012 dinner was Gilles De Blois, who was among those Bergeron and Lamontagne also visited in May. De Blois owns Proflex Inc., a Drummondville, Quebec, manufacturer of custom plastic molded parts for a variety of industries. Bergeron and Lamontagne have met with De Blois a handful of times, the first about five years ago at a dinner the pair held in Canada. He then came to the 2012 dinner and offered a testimonial as to why it is a good idea to work with the pair—even though De Blois has yet to open an American operation as he is still seeking contracts with a Buy American clause, requiring some U.S. manufacturing.
This day begins with talk about a recent vacation and a plant he owns in Indonesia. De Blois speaks quickly in French, and the discussion moves to opening a U.S. operation. De Blois recently created a product that has sparked the interest of Bombardier, a manufacturer of planes and trains based in Canada. But the deal hasn’t been sealed yet.
De Blois provides Bergeron and Lamontagne with several leads as well as advice and background on the transportation sector in Quebec
Then it’s off to a cabinetmaker in Quebec. (The company name remains confidential at the company’s request as discussions are in progress.) Bergeron and Lamontagne first met the owners at a large dinner held two years ago and then invited him to a smaller private dinner for four business owners. Upon arrival for this third meeting, they learn the business was recently sold. They meet with both old and new owners and see that an opportunity still exists. “The potential in the states is much bigger than Quebec and the rest of Canada,” the new owner says.
Bergeron sums up the tax advantages—no sales tax, no income tax, no inventory tax—and Lamontagne explains that Colebrook is a foreign trade zone, allowing for duty-free movement of goods. “We help you get established and then we get out of your way,” Bergeron adds. He and Lamontagne returned to the company in late August to make a formal presentation, which includes information comparing tax rates and programs (like the NH Job Training Fund) that help companies become established and grow.
If We Build it, Will They Come?
Part of the draw for these companies may be a construction site in Groveton, which includes shells of a few buildings and lots of rubble. It’s the former Wassau Paper Mill, a 100-acre site owned by Bob Chapman, who has a demolition business and has invested $2 million in clean up. Chapman will be paid back when the land is developed and leased or sold.
Bergeron and Lamontagne envision the site filled with businesses from Quebec. “We’d like to get a company with a little vision,” Lamontagne says. “If you can get past all this rubble, you can see the mountains. I know it’s hard, but it’s a pretty spot.” Adds Bergeron. “There is an economic factor here. We think they could get into this at a lower cost.”
One incentive the state offers is an Economic Revitalization Zone Tax Credit worth up to $240,000 over 6 years for businesses that operate in distressed areas. While that pales in comparison to the tax credits that other states offer, NH is competitive in real estate, lower rents and a lower cost of living, says Bergeron. Proximity also works in the Granite State’s favor. While businesses may have partners elsewhere in the U.S., they do like NH because the owners can visit their NH location in a day.
Timing is tricky though. If the Groveton site isn’t cleared for buildings to go up this fall, Bergeron says nothing can happen until spring. And that could mean lost opportunity if a business is ready to move but doesn’t have a place to move into. “We can spend years cultivating a business relationship and they finally say they are ready, and then we say, sorry, can you wait a year while we build you a building?” Bergeron says. And that building must meet Canadian standards, including a spotless business park with landscaping and well maintained roads.
Once businesses are in NH, Bergeron and Lamontagne don’t leave them hanging. Lamontagne helped Kheops International, a Colebrook company that sells “meaningful and wellness gifts” (including wind chimes, candles and meditation aids), access job training funds and connect with NH Employment Security when it needed additional employees. The company, which is originally from Canada and still maintains operations there, ships 80 boxes daily from its Colebrook plant, just 10 minutes from the border. It employs 48. Kheops has been in Colebrook for a decade and this year, for the first time, U.S. sales surpassed Canadian sales. President Marie-Josee Vaillant often accompanies Bergeron and Lamontagne to meetings with Canadian prospects and serves as an ambassador to recruit other businesses.
Vaillant says part of the challenge for NH is name recognition among Canadians. While we share a border, she says, many Canadians know nothing about NH as opposed to Vermont or New York, which they see on TV.
The Challenges of Crossing Over
While NH has many advantages over its neighbors—Vermont, Maine and New York—it also struggles to compete against the extras other states offers such as buildings and tax breaks. “We’re always trying to come up with different ways to recruit,” Bergeron says.
And recruiting involves many unknowns. The scariest, they say, is being conned. Bergeron recalls a Canadian man who wanted to buy the Balsams and open a plastics company there. He promised to invest millions and provided information that seemed legitimate. When they thought the deal was about to close, Lamontagne was invited to the Queen Elizabeth Hotel in Montreal on a Sunday morning by the man’s father, who said it was urgent. “He had a tear in his eyes and gave me a $200 bottle of champagne. He said his son was a fraud and had stolen millions from him,” Lamontagne recalls. (He did not keep the bottle, as it would violate state rules.) “There is a lot in this job that is not as it seems,” Bergeron adds.
Border relations are also a struggle. Going into Canada, the duo are greeted cordially by the border patrol. Coming back to the U.S., they are chided for changing lanes and the car is searched.
“This doesn’t help us recruit,” Bergeron says. “You can see the difference in the attitude going into Canada and then coming back to your own country,” Lamontagne adds. “It’s not very welcoming.”
Bergeron and Lamontagne don’t always know what makes a company take the leap and open a NH office, but they pursue every possible lead. And while many promising prospects fade away, there are those like Vaporium that pay off and bring new jobs to NH. The key, Bergeron says, is to be patient and open to all leads. “That could be the next company moving to Colebrook,” he says, sitting outside Vaporium before the meeting. It turns out it is.
Current Issue - May 2024