Lessons learned on the farm in building a battery empire

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[00:00] SPEAKER_00: Welcome to Canada's podcast.
[00:05] SPEAKER_00: Hello, I'm Mario Toniguchi and this is Calgary's podcast on Canada's podcast network joining
[00:11] SPEAKER_00: me today is Sean Sauer, who is president and CEO of Canadian Energy.
[00:16] SPEAKER_00: Thanks for joining us today, Sean.
[00:18] SPEAKER_01: Yeah, pleasure to be here, Mario.
[00:19] SPEAKER_01: Thanks for having me.
[00:20] SPEAKER_00: Well, let me just ask, first of all, just tell me what Canadian energy is and what you
[00:25] SPEAKER_00: guys do.
[00:26] SPEAKER_01: Canadian energy in Canada is mainly a distribution company.
[00:33] SPEAKER_01: So we distribute all kinds of batteries and battery-related products, energy storage systems.
[00:39] SPEAKER_01: But we also have manufacturing assets in Asia.
[00:43] SPEAKER_01: So we have a plant in South Korea where we manufacture transportation batteries and we
[00:49] SPEAKER_01: have a plant in Taiwan and one in China where we build other non-transportation type batteries.
[00:57] SPEAKER_01: So we're kind of got our foot in many different sectors.
[01:01] SPEAKER_00: And what kind of batteries are we dealing with here?
[01:03] SPEAKER_01: So mainly we participate in the transportation industry.
[01:08] SPEAKER_01: So today the biggest hunk of our revenue comes from starting batteries.
[01:12] SPEAKER_01: Automotive, truck, heavy duty, those types of batteries.
[01:17] SPEAKER_01: But we also sell renewable batteries, standby power batteries.
[01:23] SPEAKER_01: And we also build large format energy storage systems right here in Calgary under a different
[01:30] SPEAKER_01: brand, but sort of a spin-off of Canadian energy.
[01:34] SPEAKER_00: And in terms of the distribution, let's say in Canada, how can you describe what that
[01:41] SPEAKER_00: network is like?
[01:42] SPEAKER_00: Like a word?
[01:43] SPEAKER_00: Yeah.
[01:44] SPEAKER_01: So in Canada, sort of in Canada, because of the vastness of the country, it's difficult or costly
[01:54] SPEAKER_01: to do distribution.
[01:56] SPEAKER_01: So you need a lot of infrastructure.
[01:57] SPEAKER_01: So we've got 19 different warehouses, basically every major center across Canada.
[02:03] SPEAKER_01: You know, a large network of trucks, batteries are heavy.
[02:08] SPEAKER_01: So we support all of our customers out of those 19 facilities,
[02:13] SPEAKER_01: right from St. John's to Victoria.
[02:16] SPEAKER_00: Oh really?
[02:17] SPEAKER_00: And what about from a retail perspective?
[02:20] SPEAKER_00: What do you have something there?
[02:22] SPEAKER_01: No, we are typically a wholesale distribution company.
[02:27] SPEAKER_01: So all of our customers, most all of our customers, are people that resell our products.
[02:33] SPEAKER_01: So we would sell into the, you know, parts tours, parts chains, heavy duty equipment,
[02:41] SPEAKER_01: suppliers, those types of customers.
[02:45] SPEAKER_00: So it's something like I go for my 2010 Alantra Anita battery.
[02:51] SPEAKER_00: I go to Canadian Tire.
[02:53] SPEAKER_00: Am I likely to see your product there?
[02:56] SPEAKER_01: Well, we wish Canadian Tire was one of our customers.
[02:59] SPEAKER_01: Okay.
[02:59] SPEAKER_01: Because they're obviously a major player in the industry, but no.
[03:02] SPEAKER_01: They're not one of our customers.
[03:04] SPEAKER_01: But yes, that concept plays out for sure.
[03:08] SPEAKER_00: Okay.
[03:08] SPEAKER_00: Any, I'm just curious of any particular branded retail, you know, outlet that you work closely with.
[03:18] SPEAKER_01: Yeah.
[03:18] SPEAKER_01: So some brands that you would, you know, that people would recognize are, you know,
[03:22] SPEAKER_01: bumper to bumper auto parts, princess auto, you know, international Navastar trucks,
[03:28] SPEAKER_01: Volvo, Mac, those types of customers.
[03:33] SPEAKER_01: Those are all people that we supply.
[03:35] SPEAKER_00: Okay.
[03:36] SPEAKER_00: Super.
[03:36] SPEAKER_00: Then tell me a little history here.
[03:38] SPEAKER_00: You get into the battery business.
[03:42] SPEAKER_01: Well, if we've only got to 11, I'll try and squeeze it out into a shirt.
[03:47] SPEAKER_01: So in 1987, brother Darwin's hour purchased a battery shop in Lafbridge, Alberta.
[03:54] SPEAKER_01: We grew up on a farm down there.
[03:57] SPEAKER_01: So we're farmers from southern Alberta and very shortly thereafter, I've got involved.
[04:03] SPEAKER_01: So just curious potato farmer?
[04:06] SPEAKER_01: Sugar meat.
[04:07] SPEAKER_01: Sugar meat?
[04:07] SPEAKER_00: Okay.
[04:08] SPEAKER_00: Yeah.
[04:09] SPEAKER_00: But before you went to rock thing, I was curious.
[04:11] SPEAKER_01: Oh, that's okay.
[04:12] SPEAKER_01: That's okay.
[04:14] SPEAKER_01: And we both went to work just building the distribution network.
[04:19] SPEAKER_01: So I was quite young.
[04:20] SPEAKER_01: I was 19 at the time.
[04:22] SPEAKER_01: So basically, I just lived out of a duffle bag and went from city to city setting up,
[04:27] SPEAKER_01: you know, the different distribution locations.
[04:30] SPEAKER_01: And, you know, there's a lot of water under the bridge in this story.
[04:33] SPEAKER_01: But 35 years later, you know, here we are with kind of a diverse asset base.
[04:41] SPEAKER_01: We've we've ended up with a real estate investment company and manufacturing assets in Asia.
[04:47] SPEAKER_01: You know, an R&D group in Vancouver, you know, as a pool of engineers there, where we we work on
[04:55] SPEAKER_01: new products mostly outside of the transportation industry.
[04:59] SPEAKER_00: So just out of curiosity, what was the appeal for your brother to buy a battery shop?
[05:07] SPEAKER_01: Well, I think that we were both very entrepreneurial.
[05:11] SPEAKER_01: And we knew the gentleman that currently owned the facility and he was getting older.
[05:19] SPEAKER_01: And it was just an opportunity to get our feet into into business.
[05:22] SPEAKER_01: We didn't really have any previous experience in the industry.
[05:27] SPEAKER_01: You know, it wasn't a family venture.
[05:29] SPEAKER_01: We were starting from from a new.
[05:31] SPEAKER_00: Well, so so when you look at the company now, you know, obviously, tremendous growth from
[05:38] SPEAKER_00: from from the from the very beginning, what are your plans and thoughts, vision for the company going
[05:45] SPEAKER_01: forward? Well, we want to obviously the distribution assets in Canada are very valuable.
[05:53] SPEAKER_01: You know, it's put us into a number two position in terms of market share here in Canada.
[06:00] SPEAKER_01: So that's fantastic.
[06:02] SPEAKER_01: Where most of our investments are taking place in new product development.
[06:06] SPEAKER_01: So we've all heard about, you know, lithium batteries and and most of those stories are coming
[06:12] SPEAKER_01: out of the tier one transportation business. So the electric cars and and where we're focused
[06:19] SPEAKER_01: is more in the smaller electric vehicle markets, whether that's let's say,
[06:26] SPEAKER_01: scissor lifts, renewable energy, that type of thing.
[06:30] SPEAKER_01: We currently build lithium modules and we take those technologies and we try to adapt them
[06:39] SPEAKER_01: into those specialty markets where we excel. So more investment in that in that direction and
[06:45] SPEAKER_00: the growth is phenomenal. So interesting. Yeah. So when you look at being an entrepreneur,
[06:53] SPEAKER_00: it's like an interesting question here because I've seen it in my career over over the years.
[07:00] SPEAKER_00: What do you think you learned from being on the farm that's helped you as a business?
[07:05] SPEAKER_01: Well, without question, it was the ability to work. Work, sacrifice, get things done.
[07:18] SPEAKER_01: Without those without that spiel set, there's absolutely no way that I'd be sitting here today and
[07:23] SPEAKER_01: you know, the old adage, right? One percent inspiration, 99 percent perspiration.
[07:28] SPEAKER_01: Yeah. It's a lot of hard work.
[07:31] SPEAKER_00: Yeah. Yeah. No, I see that often, right? My wife's some Saskatchewan and grew up in the farm and
[07:37] SPEAKER_00: we often talk about that and you can see it in a lot of people like, you know, that work ethic.
[07:43] SPEAKER_00: You know, if they grew up on the farm, it is incredibly there.
[07:50] SPEAKER_00: In terms of being an entrepreneur, what are kind of things that you enjoy being your own
[07:57] SPEAKER_01: business owner, an entrepreneur? Well, I think the number one thing over the years,
[08:03] SPEAKER_01: it's changed. When I was younger, I thought it was all about the money for sure.
[08:08] SPEAKER_01: You know, I was going to become the big millionaire and in a way we go. But very rapidly, money
[08:13] SPEAKER_01: takes sort of a second seat to that. And I've learned over the years where I get my biggest joy is
[08:22] SPEAKER_01: watching other people succeed. Building businesses and watching other people succeed is, I really
[08:29] SPEAKER_01: enjoy that. So, you know, we've got lots of really good people within our organization that
[08:35] SPEAKER_01: you know, started out as a new hire in the warehouse and today are playing, you know, executive
[08:41] SPEAKER_01: leadership roles in this organization and that feels really good. So, you know, that's for me,
[08:48] SPEAKER_00: that's the biggest check. Okay. If you had somebody come to you, say a younger person or even just
[08:55] SPEAKER_00: someone who wanted to start up a business, what advice would you give them on being an entrepreneur
[09:01] SPEAKER_01: and what they should do? Well, I think I would probably point towards culture. So, one of the things
[09:07] SPEAKER_01: that I've learned over the years is I think it came from Lou Gersner, the old CEO of IBM. He said,
[09:16] SPEAKER_01: look, culture is not just part of the game, it is the game. And, you know, if you can create a really
[09:24] SPEAKER_01: good culture, then an organization can succeed. So, you know, we have a very disciplined culture
[09:32] SPEAKER_01: that we like to talk about daily. But one of my favorite ones is we call it humble student.
[09:39] SPEAKER_01: So, in order to succeed in this organization, you need to be a humble student. That means that
[09:45] SPEAKER_01: regardless of your title, you can learn from anybody at any time. And so, I think my main advice to
[09:52] SPEAKER_01: young people is to be humble and continue to learn every day from everybody, regardless of their
[10:01] SPEAKER_01: position in the organization. You know, that's not everything, but it's a real good character piece
[10:07] SPEAKER_00: to have. Yeah, no, that's true. What about in terms of the challenges that you face as being
[10:13] SPEAKER_00: an entrepreneur? What are some of the biggest challenges you would say throughout your career?
[10:19] SPEAKER_01: Well, you know, I always say that we didn't start out with millions of dollars. So,
[10:27] SPEAKER_01: we didn't have any money. And so, the battle was always for capital. You know, if you had a good
[10:35] SPEAKER_01: business model, it was profitable, you were growing. It was always a struggle to attain enough
[10:41] SPEAKER_01: capital to keep up with the growth and et cetera, et cetera. And I think the other big lesson is
[10:47] SPEAKER_01: making sure that you can make all of the big mistakes quick enough. I think it's a pilot
[10:54] SPEAKER_01: adage. You'll never live long enough to make all the mistakes yourself. So, you need to listen
[11:01] SPEAKER_01: to other people's mistakes. And we've made a lot of thank goodness we made them early.
[11:07] SPEAKER_00: Yeah, no, that's it. You need to make them. Yeah, but the whole thing, though, is if you don't
[11:12] SPEAKER_00: learn from mistakes, you can't, you know, and mistake truly becomes a mistake. Yeah, yeah.
[11:19] SPEAKER_01: I think, you know, just to add to that, what you learn is important is integrity and reputation.
[11:29] SPEAKER_01: And sometimes doing what's right is tough. But over the years, if you make those tough decisions,
[11:39] SPEAKER_01: and you continue to do it right, do what's right, those customers, those vendors, they learn to
[11:45] SPEAKER_01: trust you. They're there with you in the good times and the bad times. And so, again, advice to
[11:51] SPEAKER_01: young guys, there's no real quick path for me to be. Yeah, you got to do the work and you got to be
[11:58] SPEAKER_01: honest and do the right things. And you'll get there. Yeah, that's quite interesting. Yeah.
[12:05] SPEAKER_00: You know, we've gone to two years of pandemic here. A lot of things and probably the most overused
[12:11] SPEAKER_00: word in those two years is pivot, right? And how important, you know, I like to use word change.
[12:20] SPEAKER_00: And but how important is it as a company, as an entrepreneur to be adaptable to, you know, to see,
[12:29] SPEAKER_00: you know, where things are going in the world in terms of trends, etc. And to, I guess pivot,
[12:37] SPEAKER_01: if need be. Well, I think that, you know, the last two years, it's been incredible.
[12:45] SPEAKER_01: Because again, I don't think anybody has all the answers. You would wake up day to day and all
[12:51] SPEAKER_01: of a sudden, the challenges would be completely different than what they were the day before. So,
[12:57] SPEAKER_01: you know, right up front, you know, we cut capacity by probably 45% and then within literally weeks,
[13:06] SPEAKER_01: we realized that that was a huge mistake for whatever reason or demand went through the roof.
[13:12] SPEAKER_01: So we had to turn back, you know, get the production back going again. That led us into supply chain
[13:18] SPEAKER_01: issues. And so when you say pivot, I understand the term, but I would just say, Mary, it's coming from
[13:26] SPEAKER_01: all directions. And you know, so that's just one of them, you know, getting your forecasting and your
[13:32] SPEAKER_01: demand correct, huge challenge. And then employees. So the labor market has been incredibly challenging.
[13:41] SPEAKER_01: So our demand right now is very, very good. We are growing faster than we can actually handle it.
[13:48] SPEAKER_01: Well, everybody needs batteries, right? Well, yeah, and thank goodness, you know, we're in that sort of
[13:53] SPEAKER_01: essential market. It's not a luxury item. We can't get enough people. We can't get enough people.
[14:00] SPEAKER_01: And so we're having to learn how to recruit and look in different ways. It's very important.
[14:08] SPEAKER_01: So I would like to tell you that we've made all the right moves through this. The real answer is,
[14:14] SPEAKER_01: we've made, we continue to make, you know, mistakes, but we're trying to pivot as quickly as we can,
[14:20] SPEAKER_01: you know, to maintain the health of the company and the employees and that type of thing.
[14:25] SPEAKER_00: Yeah, what about yourself, personally, Sean? You know, one of the phrases that we learned over the
[14:33] SPEAKER_00: years is this work life balance, right? Where do you find the balance in your life? Obviously,
[14:40] SPEAKER_00: every entrepreneur and you're probably like them, your guys are busy.
[14:46] SPEAKER_01: Well, I would like to tell you that I have this picture perfect balance. And that would be a lie,
[14:52] SPEAKER_01: Mario, but what I've tried to do over the years is to, at the very least, focus on my family
[15:00] SPEAKER_01: and then the business. And so I feel like if I can get those two things correct,
[15:07] SPEAKER_01: and I've got a little bit of extra time, you know, on the side, great. I'll see what else can be
[15:11] SPEAKER_01: done, but that's really all I focus on. And I'm sure someday that that might start to change,
[15:20] SPEAKER_01: but I don't know. I love to build businesses. I get a kick out of it, I love working with people,
[15:25] SPEAKER_01: and I don't see that changing anytime soon, you know. But those are the two things I focus on.
[15:32] SPEAKER_00: You know, I guess the danger, right? Being an entrepreneur is that you're basically working 24-7,
[15:38] SPEAKER_00: right? And learning how to turn it off, so to speak, and take a break is a very difficult thing,
[15:48] SPEAKER_00: right? How important do you think that is for?
[15:52] SPEAKER_01: I think for your own personal health, it's crucial. And again, for your family, it's crucial.
[15:59] SPEAKER_01: I took up flying airplanes. So I'm a commercially rated pilot. And it's peaceful up there.
[16:08] SPEAKER_01: So when, you know, the traffic is not bad up there, you look down at the highways, and you know,
[16:15] SPEAKER_01: you thank goodness that you're up there and not down on the highway. So I love to fly airplanes,
[16:20] SPEAKER_01: it's therapeutic. So that's the one thing that I've sort of done for myself. But absolutely,
[16:28] SPEAKER_01: you've got to get the balance right, and it's not always easy.
[16:33] SPEAKER_00: Yeah, no, it isn't. And just on a curiosity, where do you like flying?
[16:39] SPEAKER_01: Well, I've got a SESMA 414. So that's a twin engine pressure, an older twin engine SESMA.
[16:47] SPEAKER_01: I fly at a spring bank and all over Western Canada. So I get to as many of our warehouse locations
[16:54] SPEAKER_01: as possible. I use it for business, especially now when commercial transport is a lot more difficult,
[17:01] SPEAKER_01: a lot more time consuming. I've been able to use it a lot more.
[17:05] SPEAKER_00: Okay, let me just ask you one last question, Sean. If you never got into the battery business,
[17:13] SPEAKER_00: what do you think you would have done?
[17:17] SPEAKER_01: Well, that's an interesting question, I guess. I'm not sure I've given it much thought.
[17:22] SPEAKER_01: I know I can farm. I know I can drive truck. I've done them all. I went to college.
[17:29] SPEAKER_01: You know, actually, I probably would have been a commercial pilot. I get a real kick out of that.
[17:35] SPEAKER_01: I'm not sure that my entrepreneurial desires would have not taken over. I'm pretty sure that I
[17:43] SPEAKER_01: would have had to have been in some sort of business. But it would have been just a different business.
[17:51] SPEAKER_01: There might not have been batteries that have been something else.
[17:55] SPEAKER_00: Interesting. Very interesting. Well, thanks very much, Sean, for joining us today. That was excellent.
[18:00] SPEAKER_00: You bet. It was great to meet you. Give me a call anytime.
[18:03] SPEAKER_00: All right. Super. That's Sean Sauer, was president and CEO of Canadian Energy.
[18:08] SPEAKER_00: This has been Calgary's podcast on Canada's podcast network. I'm Mario Tonogusi.
[18:14] SPEAKER_00: Thanks for joining us today.