Province helped Fatkat attend conferences

Sept. 2, 2009

This is part 1 of our look at documents obtained from the provincial government regarding it's dealings with Fatkat Animation.

New details about Fatkat Animation's dealings with the province have come to light thanks to a Right to Information Request by the Miramichi Leader.

More than 1,300 pages of documents from Business New Brunswick show correspondence between the company and the government in their dealings with the province over financial support.

In the first part of a series, the Miramichi Leader will look at expenses incurred during trips to trade shows and conferences, a portion of which the province reimbursed Fatkat.

As part of their marketing strategty representatives from Fatkat took part in several animation trade shows and conferences around the world over a span of several years.

The goal of the trips was to meet potential clients, make connections and boost the company's sales by showcasing their product at the conventions.

Between 2004-2006 Fatkat got back from the provincial government $21.326.72 in costs from attending conferences and bringing in potential buyers.

Fatkat applied for and received the funding through Business New Brunswick's Trade Assistance Program and Rural Exporter Program.

The trips included conferences in London, UK, Ottawa, Dallas, three in New York City, two in Banff and two in Cannes, France.

In a letter from Business New Brunswick dated Sept. 1, 2005, the department's trade executive, whose name was blacked out, explained Business New Brunswick would share the conference's costs with Fatkat, up to 50 per cent of their total costs.

A handwritten note by someone whose name was also blacked out wished Fatkat luck.

"We wish you continued at this huge conference," the note said.

In a letter describing the conference in Cannes, a Fatkat representative whose name was blacked out on the letter, described it as a prestigious conference in their industry, which would allow them to reach world markets and meet with executives.

At the time, Fatkat listed their total sales as $345,710 for 2005 and $204, 686.29 for 2004.

In the case of the Oct. 17-21, 2005 conference in Cannes, Fatkat projected incremental sales from the project at $1.4 million in the first year and $1.5 million in the second.

As part of the cost sharing programs, Fatkat was able to claim part of the return airline tickets, the conference registration fees and per diems of $150 per day.

Several of the letters from Business New Brunswick to Fatkat confirming the department's approval of the submitted claims included hand written notes.

"Your on your way to success; keep up the good work!" said one note.

Another note on one of Fatkat's Trade Assistance Program and Services evaluation report had the word "wow" scribbled next to a comment about the potential for 30 new hires.

In an e-mail from Fatkat to Business New Brunswick from Feb. 1, 2005, they forwarded a message from the Canadian Consulate General, which invited Fatkat to co-host the Canada Networking Reception at the KidScreen Summit in New York and asked if the TAP program would cover 50 per cent of the costs.

Business New Brunswick's senior trade executive replied they would if there was room in Fatkat's $15,000 limit for the program.

"This looks like and [sic] Ideal opportunity to make contacts."

Another e-mail from Fatkat to Business New Brunswick dated July 6, 2005 outlined several projects they were working on with a total potential value of $9.8 million.

One project involved a one minute animation test and another was moving ahead toward production, while the rest were still in the negotiation phase.

Fatkat projected total staff requirements of 210 people if all the projects moved into production.

The response from Business New Brunswick asked Fatkat to keep them updated on their success with the TAP program and other Business New Brunswick trade related service for the department's weekly report to the minister and senior management.

"It consists 'entirely' trade success stories from companies like yours," the e-mail said.

Fatkat's evaluation reports detailed the products or services promoted during the projects, estimates of new sales and the number of potential customers contacted, whether or not participation will lead to increased sales or new job opportunities and outlined activities the company planned to undertake to follow-up on the project.

On their Trade Assistance Programs and Services evaluation reports Fatkat provided the province with estimated sales figures stemming from the conferences.

They also included estimated sales figures on their funding applications forms.

The numbers did not always match up, like in the case of a conference in July 2004 for which they estimated on their evaluation report potential sales of $60,000 in the first six months after the conference and $100,000 in the 12 months following.

For the same conference, the application stated estimated sales of $30,000 for the first year, $60,000 for the second and $40,000 for the third and fourth.

A similar sitatuation occured with the report for a June 2004 conference, which saw estimated sales of $10,000 for the first six months and $50,000 for the first year, while the application had estimates of $70,000 for the first year, $200,000 for the second, $350,000 for the third and $500,000 for the fourth.

The company predicted the conferences and incoming potential sales would generate about $22 million in possible sales between 2004 and 2010, although the totals vary depending on which of Fatkat's figures are used.