Billions of dollars are spent annually by resource companies on their facilities in Saskatchewan. Who they choose to do the work has a significant impact on our local community: a dollar spent with a Saskatchewan supplier has four times the local impact of a dollar spent with an out-of-province supplier.1
Procurement is the process of selecting suppliers. When procuring goods and services these resource companies consider suppliers from around the globe. It’s a competitive market and landing this work is difficult.
A Saskatchewan company is often chosen, but choosing to buy local is not a handout to local firms. To understand why, you need to consider the competitive environment.
Saskatchewan entrepreneurs respond to business opportunities and create local companies to help build and service industrial facilities such as mines, oil refineries, and pulp mills. These suppliers offer a wide range of services and products, from engineering services to custom manufactured equipment. Many of these companies are over 50 years old and are a valuable part of the industrial supply chain in this province.
With a robust, sophisticated supplier base right in their backyard, Saskatchewan’s industrial facilities spend a great deal of their annual budgets within the province. This is important. People can see the effect in their daily lives.
Adapting to increasing complexity
Over time, these suppliers have adapted as their customers’ operational requirements have become more complex and the procurement process now includes suppliers from around the globe. Saskatchewan’s suppliers continue to invest in their own facilities and operations to ensure they have the skills to compete. The investment is paying off. Not only are Saskatchewan suppliers doing business with local resource companies, they regularly sell to new customers in foreign markets.
With a robust, sophisticated supplier base right in their backyard, Saskatchewan’s industrial facilities spend a great deal of their annual budgets within the province. This is important. People can see the effect in their daily lives.
“The money that our province’s resource companies spend locally has a tremendous effect on Saskatchewan residents,” explains Eric Anderson, executive director of the Saskatchewan Industrial and Mining Suppliers Association (SIMSA).
RELATED CONTENT
SIMSA engaged PricewaterhouseCoopers LLP to assess the economic impact of mining and energy suppliers in Saskatchewan.
Learn the findings and download the report, The Economic Impact of Local Resource Suppliers in Saskatchewan.
Anderson’s comments stem from a new study conducted by PwC – The Economic Impact of Local Resource Suppliers in Saskatchewan – that reveals the economic impact of local procurement. When a Saskatchewan resource company purchases from a Saskatchewan-based supplier, there is a greater economic benefit to the province than if the same purchase was made from an out-of-province company.
The ripple effects are significant and can be measured in several areas. Local purchases increase the size of Saskatchewan’s economy. A greater number of Saskatchewan residents are employed. There is more tax revenue available for governments to build important local infrastructure that our community needs. The next time one of your kids or grandkids is in the new Jim Pattison Children’s Hospital, take a minute to think about the influence these large resource companies have on life in Saskatchewan.
Local suppliers deliver value
“We always knew that purchasing from local suppliers benefited the province,” says Rob Tebb, SIMSA’s board chair, “but now we have a more concrete idea of how much more impact local spending can have on our local economy.”
Why do resource companies based in Saskatchewan spend money locally? There are several reasons. The factors that are important to a specific procurement decision will change in each situation, but one thing is constant: these decisions are based on value. And when it comes to best value, Saskatchewan suppliers deliver. Our world-class local suppliers are an integral part of the mature, reliable, and affordable industrial supply chain that these local resource companies rely on.
Saskatchewan’s resource companies buy much of what they need locally, but their needs change over time and they are always learning about new Saskatchewan suppliers they can work with. The next time you talk with someone who works for one of these large industrial resource companies, thank them for buying local.
[1] PricewaterhouseCoopers. The Economic Impact of Local Resource Suppliers in Saskatchewan. SIMSA, Sept. 2019.
First published in the March 2020 edition of The Business Advisor.