High dollar squeezes tech companies
CBC News included OCM Manufacturing in this radio and print story about the rising Canadian dollar.
“A rising Canadian dollar is posing a challenge for technology companies, which mainly pay expenses in Canadian currency but sell their products in U.S. dollars.
“In the past three years, the Canadian dollar has risen from 75 cents to 94 cents.
“For Ottawa’s Elliptic Semiconductor, which sells computer chip designs to the U.S. and Asia in U.S. dollars, that means fixed costs such as salaries have risen around 25 per cent relative to income from individual sales, says vice-president of marketing Al Hawton.
“‘The last couple of months have really kind of shocked us,’ he said, adding that a 10 per cent jump in the value of the Canadian dollar “means essentially taking 10 per cent off our top line.
“‘Really what it means is it’s harder for us to achieve our financial goals in terms of top line and profitability,’ he said, adding the company must compensate by selling more products.
“Michael Julian, CEO of OCM Manufacturing, an Ottawa-based company that produces a variety of electronics, said his company has found a way to deal with the problem.
“‘Now over the last five years, we’ve started to negotiate contracts in Canadian dollars, because of the currency situation,’ he said.
“‘I wouldn’t call it foresight. I’d just call it adaptation.'”
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