Virtual Marine Sales Up 500% In 2 Years
June 04th, 2013
Virtual Marine Technology, the St. John’s, N.L., developer of simulated training systems for maritime industries, has quintupled its revenues in the last two years with its drive into export markets.
And president Anthony Patterson says that move into foreign markets will only continue in the future.
Since emerging from Memorial University of Newfoundland nine years ago, the company has become a cornerstone of the St. John’s oceans industry cluster. But like so many startups, the challenge has been to grow revenues in a meaningful way.
It had been targeting two market segments — oil and gas and defence industries — within Canada for several years, and the change came in 2010. Its installations with a few Canadian clients drew the attention of clients in the Gulf of Mexico, the North Sea and scattered markets like Brazil and Germany.
In all, the company’s sales have risen 500 per cent in two years now that it’s hit export markets.
VMT began in the wake of the 1982 sinking of the oil rig Ocean Ranger. After the disaster, which claimed the lives of 84 people, Memorial began research into virtual training techniques that simulate extreme conditions but do not subject crews to danger or companies to undue expense during the training.
Working with the university’s Genesis Group, which commercializes the institution’s research, the university was able to license its intellectual property to VMT, which was then spun off as an independent company.
Patterson said the simulated training not only saves lives but also reduces costs because training people in real-life harsh conditions such as storms is expensive as well as dangerous.
“The people that we deal with are compliant with all of the rules,” he said. “But to meet these requirements can be very expensive.”
In some cases, he said, it’s impossible to recreate the conditions associated with a catastrophe unless you’re using a simulated system, so VMT offers the most thorough training available.
“Our training systems are very efficient,” Patterson said.
The company expects its greatest expansion will be in export markets, and Patterson says that soon more than half its sales will be outside Canada. It is concentrating on marine-based industries for now, but Patterson said it will likely move into products for other industries eventually.
The company has raised a total of $3.2 million from private investors, led by GrowthWorks Atlantic. It has also received financing from the Business Development Bank of Canada and the Atlantic Canada Opportunities Agency.
Patterson said VMT is not seeking financing because it is meeting operational costs through cash flow.