Ontario`s - Advantage Brantford

Ontario’s
Plastics Industry
Shaping
the
Future
fDi (Foreign Direct Investment) magazine (part of the Financial
Times Group) ranks Ontario the Canadian province of the future
because of its skilled workforce, affluent local customer base,
proximity to the U.S. market, lower business costs and excellent
quality of life.
Every effort has been made to ensure the accuracy of the information in this
publication at the time of printing. However, the programs referred to and the
data cited are subject to change.
All figures are in US dollars unless otherwise noted. The exchange rates used are
based on Bank of Canada annual averages.
Cdn$1.00 = US$0.826 (2005)
Cdn$1.00 = US$0.763 (2004)
Ontario’s
Plastics Industry
Contents Plastics: the business case for Ontario
3
Smart, skilled workforce
5
Innovative environment
8
Positive business climate
12
A Strategic location
15
We can help
16
Ontario’s Innovation Corridor
O
From Windsor to Ottawa and into Northern
Ontario, throughout Ontario’s Innovation
Corridor world-leading companies collaborate
with more than 150 university, college and
public research centres to speed new discoveries
and processes from the lab to the marketplace.
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Ottawa
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Lake Ontario
Buffalo
Chicago
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ONTARIO’S PLASTICS INDUSTRY
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Detroit
Windsor
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Plastics:
the Business Case
for Ontario
If you’re a plastics supplier or producer, here’s what you need to know
about Ontario—and why it’s the place you want to be.
We’re Canada’s largest province (our equivalent of
a U.S. state).
• Our population is 12.5 million—86,500 work in the
plastics industry.
• We’re well-educated—57% of us have post-secondary
education, compared to 38% in the U.S.
• We’re highly competitive in terms of business costs—
our industry offers a 4.5% cost saving over the U.S.
We’re home to Canada’s corporate and banking
headquarters, and we have:
Ontario is home to more than 2,000 flourishing plastics
suppliers and manufacturers, including ABC Group, Dow
Chemical, DuPont, Engel North America, Husky Injection
Molding Systems, LANXESS, Magna and Wentworth
Technologies. And we’re attracting new companies all the
time from Europe, the U.S. and Asia, companies like
Starlim-Sterner, Jokey and Viva Magnetics.
They’re here because the province offers all the
elements they need to succeed—a claim very few
jurisdictions can make—including:
• the largest number of multinational operations in Canada
• an economy that’s forecast to outpace that of the U.S.,
the U.K., France, Germany and Japan from 2006 to 2008
• low inflation and low interest rates
• a favourable exchange rate
• a diverse population fluent in all major languages.
• world-class petrochemical and oil-refining facilities and
their support services
• assured feedstock supplies
• a steady supply of smart, skilled labour
• a strong R&D environment
• a positive business climate
• a strategic location in the heart of the North American
manufacturing industry
• a reputation for productivity, quality and innovation.
Plastics is a well-established and growing industry in
Ontario. In fact, Ontario is a major North American
plastics producer. Our industry is fully integrated and:
And that’s why Ontario is the place to be if you’re looking
to locate or expand your business, conduct leading-edge
R&D or invest in one of the world’s leading plastics industries.
• encompasses the length of the supply chain, including
resins, molds, machinery, equipment and processors
• benefits from the province’s diverse end-user markets
• is experienced at meeting a wide range of customer
needs across North America and around the world.
ONTARIO’S PLASTICS INDUSTRY
3
IPEX
“IPEX designs and manufactures a large and diverse line of thermoplastic piping systems
and we’re recognized as a leader in our field. Our continued success depends on having
a skilled, committed workforce, competitive business costs, proximity to the market and
government incentives for R&D. Ontario delivers all that, plus a great quality of life,
which makes it easy for us to recruit and retain talent. We’ve grown and prospered
here for more than 50 years. It’s just a great place to do business.”
ALEX MESTRES, DIRECTOR OF BUSINESS DEVELOPMENT AND MARKETING
S P O T L I G H T
Engel North America
When Austrian-based Engel, one of the world’s largest injection molding machine
manufacturers, decided to capitalize on the growing North American plastics market, it chose
Guelph, Ontario as the site for its headquarters. “Ontario offered a large pool of skilled labour,
a similar business culture to Europe, the raw materials we required and proximity to our major
markets,” says Walter Jungwirth, President and CEO Engel North America. “Ontario was
also known as an innovative technology leader and both the city and the province were very
welcoming.” That was in 1975. Today, Engel North America, which now includes a second
manufacturing facility in York, Pennsylvania, has revenues of approximately $125 million a
year—close to one-third of the company’s worldwide revenues. The 229,000 square foot
Guelph facility, which includes a busy R&D and technology centre, manufactures injection
molding machines, robots and automation cells for customers in the automotive, medical,
packaging and electronics industries. “We’ve been very successful here,” says Jungwirth.
Ontario offers diverse end-user markets—automotive, aerospace,
machinery, construction, electronics, packaging, pharmaceutical and
consumer goods—and their demands for ingenious solutions have
contributed to the industry’s growth and reputation for innovation.
4
ONTARIO’S PLASTICS INDUSTRY
Smart, Skilled
Workforce
A labour-intensive industry like plastics can’t succeed without skilled,
productive workers—and Ontario’s are among the best in the
world. And, with 86,500+ people working in the industry,
Ontario has one of the most concentrated pools of plastics-related
labour in North America.
As well, Ontario’s plastics manufacturing
workers are:
What’s more, we ensure a steady pipeline of industryready workers, thanks to progressive immigration
policies that attract talent from all over the world
and a well-established education infrastructure
that includes:
• 44 universities and colleges with thousands of students
enrolled in degree and certificate programs in
mechanical, industrial, materials, electrical, computer and
systems engineering
• industry participation in shaping programs
• an extensive and focused apprenticeship and co-op network
• the Canadian Plastics Sector Council, which helps ensure
skills standards through the development of job
competencies, career promotion, training programs and
program accreditation.
• dependable—on average, they stay with a company for
nine years
• wage competitive—the average salary for an injection
molding operator is $12.17/hr in Toronto versus
$13.42 in Grand Rapids, MI, $14.41 in Boston, MA
and $14.50 in Newark, NJ.
Shipments in Ontario’s
plastics processing industry
were an estimated
$21.9 billion in 2005.
ONTARIO’S PLASTICS INDUSTRY
5
Mold-Masters
S P O T L I G H T
“Mold-Masters pioneered hot runner technology in the early 1960s, and we’re the world’s leading innovator in
the field. We have manufacturing facilities in North and South America, Europe and the Pacific Rim, but our
headquarters have remained in Ontario. With over 1,600 patents pending and received, the support for R&D in
Canada is unsurpassed anywhere in the world. In fact, in 2006 we’re moving into a new facility that incorporates
the highest level of research and manufacturing technology. We’ve thrived in Ontario thanks to a combination
of talented, loyal workers, exceptional R&D incentives, strong government support and a location that makes it
possible to get raw materials to our facility—and products to our clients around the world—quickly and efficiently.”
JONATHON FISCHER, PRESIDENT
S P O T L I G H T
Canadian Plastics Training Centre
When Elton Manufacturing, a leading designer and exporter of garage door windows and
weatherstripping, wanted to improve productivity at its Milton, Ontario facility, it turned to the
Canadian Plastics Training Centre (CPTC). A business unit of the School of Applied Technology
at Humber College in Toronto, the CPTC was established in 1993 to support Ontario’s plastics
industry. It offers customized technical training for people in the industry in a wide range of
areas, including injection molding, blow molding and extrusion. It also offers full and part-time
diploma and certificate technician courses and a post-graduate course in injection molding and
die design. It features a 3,500 square foot lab containing the latest in injection molding and
blow molding equipment. The CPTC’s clients, which include Husky Injection Molding Systems,
Honda, Polytainers, and Collins and Aikman, are a Who’s Who of the plastics industry. It’s not
hard to see why. “The CPTC not only helped train our employees so that they’re better at
what they do, they also provided production consulting that’s helped us be more efficient,”
says Elton founder Tom Boer. “As a result, we’ve expanded our operation.”
New government programs will
expand the number of apprentices
in high-demand areas to 26,000
annually by 2007–2008.
6
ONTARIO’S PLASTICS INDUSTRY
S M A R T, S K I L L E D W O R K F O R C E
S P O T L I G H T
Decoma (a division of Magna International)
“Auto parts are designed, engineered and made by people—and our employees are the best
in the business, which is why we’ve been so successful,” says Doug Harrison, Executive Vice
President, Planning and Corporate Development for Decoma. Established in the late 1970s to
develop plastic bumper covers, today Concord, Ontario-based Decoma produces plastic exterior
components and systems for virtually all of the world’s leading automakers. These include
bumpers, front and rear modules, plastic body trim and lighting products. In a fast-paced,
highly competitive industry, Decoma stays ahead of the competition by constantly producing
better products, at a better price. More than 40% of the company’s 17,000 employees work at
11 major facilities in Ontario and the province’s colleges and universities give Decoma a key
competitive advantage. “Ontario’s educational institutions develop some of the best and
brightest engineers and technicians,“ says Harrison. “We’re able to attract and keep them
because of our unique corporate culture and reputation for innovation.”
The Government of Ontario’s new Apprenticeship
Training Tax Credit refunds 25% of wages/salaries
of eligible apprentices for the first 36 months of
apprenticeship to a maximum of $15,000 (Cdn).
ONTARIO’S PLASTICS INDUSTRY
7
An Innovative
Environment
Photo credit: Husky Injection Molding Systems
Research and testing are fundamental to the successful development
and production of new technologies and products. As hundreds
of plastics companies have already discovered, Ontario offers an
exceptional R&D advantage that includes leading minds, world-class
research centres and a government that makes research and
development a priority.
We also offer some of the most generous R&D
incentives in the world.
Our R&D infrastructure includes:
• thousands of top-notch researchers at university and
college research centres, as well as hundreds more at
research centres operated by the province’s plastics
suppliers and manufacturers
• the Industrial Materials Institute of the National Research
Council, an internationally recognized R&D centre
dedicated to the Canadian materials processing and
forming industry
• the Institute for Chemical Process and Environmental
Technology, which focuses on increasing the
competitiveness of Canada’s chemistry intensive
industries through research into innovative processes and
technologies
• the Centre for Materials and Manufacturing Ontario—
a division of Ontario Centres of Excellence Inc.—which
works with industry, and university and college research
centres to move new products and technologies from
the lab to the marketplace.
8
ONTARIO’S PLASTICS INDUSTRY
• Companies conducting R&D in Ontario earn a tax credit
on every dollar they spend on eligible R&D, including
capital equipment and overhead, neither of which is
eligible for U.S. federal tax credits.
• R&D deductions can be carried forward indefinitely.
• An Ontario corporation can claim R&D tax credits even if
its R&D costs are covered, in whole or in part, by a
foreign corporation or government.
Ontario is serious about commercializing its groundbreaking
science. There are incubators, research parks and
technology transfer offices throughout the province. And
the Ontario government has committed an additional
$160 million (Cdn) over four years to accelerate the growth
of innovative start-up companies.
And when it comes to intellectual property ownership, we
offer flexible, company-oriented terms that let companies
acquire the rights to IP developed at one of our public
research centres.
A N I N N O VAT I V E E N V I R O N M E N T
S P O T L I G H T
Husky Injection Molding Systems
If you think it can’t be done, talk to Husky. That’s the word in the $20 billion injection molding
equipment sector, where Bolton, Ontario-based Husky Injection Molding Systems is the world
leader. The company designs and manufactures injection molding machines, molds for PET
containers, hot runners and robots which are used by customers all over the world
to manufacture a wide range of products in the PET, packaging and automotive industries.
What sets Husky apart from the competition are its value-added services—factory planning,
customer training and systems integration—and its commitment to research and development.
“Innovation has been crucial to our success since the early 1950s when we developed our
first breakthrough technology,” says Husky founder Robert Schad. “The bulk of our global
R&D is conducted at our Advanced Manufacturing Centre in Bolton, Ontario because the
province gives us access to the best and brightest engineers and some of the most attractive
R&D incentives anywhere.”
ONTARIO’S PLASTICS INDUSTRY
9
The Woodbridge Group
“We’ve been a world leader in automotive urethane technologies since the early 1960s. Our success is due,
in large part, to our commitment to innovation. We invest more in R&D than any of our competitors—and the
bulk of our R&D is done in Ontario because the province offers us powerful advantages. Ontario has an
extensive and impressive research infrastructure and delivers R&D incentives that are second to none. Add to
that world-class universities and colleges that turn out exceptional minds with the skill sets we need and it’s
easy to see why we’ve prospered here and why we’ll continue to call Ontario home.”
ROBERT MAGEE, CEO
S P O T L I G H T
DuPont Research, Engineering and Business Development Unit
The DuPont Research, Engineering and Business Development (RE&BD) Unit marked its
50th anniversary in July 2005 and it had good reason to celebrate. Established in 1955 in
Kingston, Ontario, RE&BD is integral to the global DuPont company and has been responsible
for numerous important technological innovations. Among its most recent are high-temperature
nylon polymers. They can withstand tremendous heat, while offering great stability, giving them
applications in a wide range of industries, including automotive and electronic. “We’re very
focused on taking science to practical uses,” says RE&BD Director Nicolas Cudré-Mauroux, who
points out that brain power is fundamental to RE&BD’s success. “The network of universities
across Ontario and Canada means we’re able to attract bright minds. There’s also tremendous
support for R&D, both in terms of tax credits and programs.” Recruited from DuPont in
Geneva, Cudré-Mauroux also credits the quality of life in Kingston for helping to attract and
keep talent at RE&BD.
In Ontario, the definition of R&D includes
new product development, development
of new or improved materials and
manufacturing process improvements.
10
ONTARIO’S PLASTICS INDUSTRY
A N I N N O VAT I V E E N V I R O N M E N T
MORE COSTS QUALIFY FOR TAX CREDITS IN ONTARIO
Ontario
United States
Wages and salaries
√
√
Capital equipment
√
Materials
√
Overhead
√
Contract expenses
√
√
65% to 75%
INNOVATION INCENTIVES FOR LARGE MANUFACTURERS
(public, private or foreign-owned)
Large Manufacturers
Gross expenditure
Notes:
R&D
Expenditures
R&D Expenditures
at Eligible Ontario
Research Institutes1
Non R&D
Expenditures
$ 100.00
$ 100.00
$ 100.00
Ontario—20% OBRI Tax Credit
1
2
The 20% refundable Ontario BusinessResearch Institute Tax Credit (OBRITC).
3
Tax rates for manufacturers:
Federal 22.12% plus Ontario 12.0% =
Total 34.12%.
(20.00)
2
Federal investment tax credit—20%
(20.00)
Tax deduction3
(27.30)
$ 80 x 34.12%
(16.00)
$ 64 x 34.12%
Eligible Ontario research institutes
include universities, colleges of applied
arts and technology, research hospitals
and other entities in Ontario.
(21.84)
$100 x 34.12%
(34.12)
Ontario exemption of federal
investment tax credit
Tax deduction3
$ 20 x 12.0%
(2.40)
$ 16 x 12.0%
After-tax cost of $100 expenditure
(1.92)
$
50.30
$
40.24
$
65.88
Provincial and federal tax
credits can cut the after-tax
cost of a $100 R&D
expenditure to $40.24.
ONTARIO’S PLASTICS INDUSTRY
11
Positive
Business Climate
In today’s competitive marketplace minimizing risk and keeping costs
down are essential for success—and Ontario delivers both.
We also welcome foreign investment, as
companies from all over Europe, the U.S. and
Japan have discovered.
• We make it possible for companies to get up and running
quickly because the necessary infrastructure is in place
and regulatory systems are streamlined.
• We also fast-track immigration for key employees,
delivering work visas within days of application.
• A recent Economist survey of 90 countries ranked Canada
third in the world in terms of honesty and reliability
in business.
• According to a 2005 comparative cost analysis for plastics
manufacturing done by the Boyd Company, Toronto offers
a clear cost advantage over competing U.S. jurisdictions.
And the Ontario government has created a new $500 million
(Cdn) Advanced Manufacturing Investment Strategy
that provides interest free loans for up to five years to help
manufacturers develop leading-edge technologies
and innovations.
OPERATING COSTS ARE LOWER IN ONTARIO
IT’S EASIER TO ESTABLISH A BUSINESS IN
ONTARIO, CANADA (number of procedures)
Total annual operating costs for a representative 175-worker plastic
products manufacturing plant (millions of dollars)
MA
CT
NJ
PA
$12,798
$12,551
$12,289
$11,951
Germany
9
Italy
9
$11,618
U.K.
MI
$11,513
U.S.
$11,136
Source: The Boyd Company, A Comparative Operating Cost Analysis for
Plastics Manufacturing, 2005 (using Cdn$1.00 = US$0.786)
7
France
IL
ON
11
Japan
Canada
6
5
2
Note: A procedure is defined as an interaction of the company founder
with external parties, e.g. government agencies, lawyers, auditors.
Source: The World Bank Group, September 2004, Doing Business in 2005
12
ONTARIO’S PLASTICS INDUSTRY
P O S I T I V E B U S I N E S S C L I M AT E
Wentworth Technologies
“Wentworth got its start in 1991 and since then we’ve grown rapidly to become a
global leader in mold manufacturing and plastics processing with clients in more than
80 countries. Our location in the Greater Toronto Area has played a significant role in
our continued market expansion and growth by giving us access to a highly skilled
and dedicated workforce, leading-edge research minds and facilities, competitive
business costs and excellent infrastructure to get our products to market.”
WALTER T. KUSKOWSKI, PRESIDENT & CEO
S P O T L I G H T
Jokey
When German-based Jokey was looking for a home for its first North American plant, the
company investigated sites in the U.S. and Canada. A leader in the production of high-end
plastic containers for the retail market, Jokey was looking for a location that offered market
proximity, a good transportation infrastructure, competitive business costs and the ability to
expand the business. The company found what it was looking for in Goderich, Ontario.
“Goderich is centrally located, making it easy for us to get our products to our customers in
Ontario and the North Eastern U.S.,“ says Plant Manager Walter Peitz. “Business costs are
competitive, the R&D tax incentives are substantial and the business culture is similar to that
in Europe.” Jokey was also able to locate an existing facility that offered approximately
100,000 square feet of space, with the ability to expand, making it possible to get up and
running quickly. Jokey began production in February 2005 and has already attracted a number
of new customers.
Employee health care benefits cost Ontario
manufacturers 6.8% of wages compared to
13.2% in the U.S. In Ontario, services such
as doctor’s fees, tests and hospital stays are
paid through the public health care system.
International firms establishing or
expanding operations in Ontario
can transfer key overseas
personnel—and spouses can apply
for their own work permits.
ONTARIO’S PLASTICS INDUSTRY
13
NOVA Chemicals
“NOVA Chemicals has been operating in Ontario since 1987. We have four manufacturing
facilities in the Sarnia area and over the past two years we’ve invested $215 million
to expand our production capabilities. Why Sarnia? It offers us market proximity—
half the U.S. market is within a day’s drive of southern Ontario—a good transportation
infrastructure and a skilled workforce.”
TOM STRIFLER, VICE PRESIDENT, CORPORATE ENGINEERING
S P O T L I G H T
PGI Fabrene
At first glance Northern Ontario might not appear to be the ideal location for a plastics
designer and manufacturer that sells to the worldwide market, but for North Bay-based PGI
Fabrene, it’s been an opportune site. Established in 1969, PGI Fabrene makes engineered
polyolefin fabrics that have become the fabric of choice for a growing number of industrial
applications—everything from housewrap and roofing underlayment to protective coverings for
construction enclosures, granular material storage covers, pond liners, sports field and golf
green covers. “New markets are opening up all the time as our engineers develop new
products,” says Chris Haas, Director of Marketing Services, who notes that the company
recently won a technical award from AIMCAL (Association of Industrial Metallizers, Coaters and
Laminators) for advancing the use of metallized fabric. “Our location has been an important
factor in the company’s success,“ says Haas. “North Bay provides us with a talented, loyal
workforce and a central location well served by rail and truck, enabling us to get raw materials
to our facility and our products to market quickly.”
The majority of our plastics manufacturers
are in southwestern Ontario—closer to
target U.S. markets than most Americanbased production sites.
14
ONTARIO’S PLASTICS INDUSTRY
A
Strategic
Location
With just-in-time delivery the standard today, location matters—
and Ontario’s is ideal. In fact, Ontario provides the perfect springboard
for plastics manufacturers eager to enter the $175 billion a year
North American market.
Among the advantages of an Ontario location:
• we’re part of NAFTA (the North American Free Trade
Agreement), which provides access to a market that’s
huge (420 million people) and affluent (GDP: $13.8+
trillion) and where products move freely across borders
• we operate on Eastern Time, which means, at most,
a three-hour time difference within North America
• our advanced telecommunications infrastructure provides
seamless voice, video and data links with major U.S.
carriers—at a lower cost.
Our transportation infrastructure is extensive,
sophisticated and integrated with the U.S.
• Our highway network is linked to U.S. routes at
10 commercial border crossings and railway lines meet
the U.S. at 5 commercial crossings.
• Ontario has five international airports: Ottawa, London,
Thunder Bay, Hamilton and and Toronto’s Pearson
International, where more than 65 airlines provide sameday service to 43 cities in the U.S. and 42 cities abroad.
• The Great Lakes/St. Lawrence Seaway System links
Ontario ports with markets in the U.S. and worldwide.
Ontario is also well situated for doing business with
Europe and Asia.
• We have same-day business access to Europe and an
evening overlap with Asia.
• We have cultural and business affinities with Europe and
Asia that smooth the way for international trade,
investment and project partnerships.
• As one of the most multicultural societies in the world,
we’re fluent in more than 100 languages, including
French, Italian, Spanish, German, Japanese, Mandarin,
Cantonese, Korean and Punjabi—and that’s a definite
advantage when you’re selling to the world.
Bottom line? Ontario is uniquely equipped to meet the needs
of the demanding plastics industry. We have the people.
The technology. The market access. The connections.
That’s why we’re a hub for plastics manufacturing—and
the place you want to be.
ONTARIO’S PLASTICS INDUSTRY
15
We can help
Looking for a place to locate or expand your plastics business?
For more information about investment
opportunities in Ontario, please call us at:
Let us help you with:
• overview information on Ontario’s economy and
business climate
• province-wide site searching of available industrial land
and buildings
• comprehensive profiles of Ontario municipalities
• coordination of site selection and community visits
throughout the province
• contacts with federal, provincial and municipal officials,
as well as utilities, transportation firms and appropriate
business facilitators.
16
ONTARIO’S PLASTICS INDUSTRY
1-800-819-8701 (North America)
00-800-46-68-27-46 (U.K. and Europe)
E-mail: info@2ontario.com
Website:www.2ontario.com
The Economist Intelligence Unit (EIU) forecasts that Canada
will be one of the best countries with which to do business,
thanks to our openness to foreign trade and capital,
high-quality infrastructure and opportunities within the
North American marketplace.
ONTARIO’S
Ontario’sPLASTICS
Plastics INDUSTRY
Industry
17
For more information about opportunities in Ontario,
please call us at:
1-800-819-8701 (North America)
00-800-46-68-27-46 (U.K. and Europe)
E-mail: info@2ontario.com
Website: www.2ontario.com
Ontario Investment Service
BCE Place, TD Canada Trust Tower
Suite 4040, 161 Bay Street
Toronto, ON, CANADA
M5J 2S1
Phone:
Fax:
416-360-4647
416-360-1817
Printed in Ontario, Canada, on recycled paper © Queen’s Printer for Ontario, 2006 311-ENG/06/06