ontario’s - advantage brantford · ontario is home to more than 2,000 flourishing plastics ......

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

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2 ONTARIO’S PLASTICS INDUSTRY

Lake Superior

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Lake Huron

Lake Ontario

Lake Erie

Buffalo

Ottawa

Toronto

Sudbury

Detroit Windsor Chicago

Ontario’s Innovation Corridor

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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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:

• 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.

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:

• 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 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:

• 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.

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.

ONTARIO’S PLASTICS INDUSTRY 3

S P O T L I G H T

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

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.


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:

• 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.

What’s more, we ensure a steady pipeline of industry-ready 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.

Shipments in Ontario’s plastics processing industry were an estimated $21.9 billion in 2005.


S P O T L I G H T

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

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.


S P O T L I G H T

S M A R T, S K I L L E D W O R K F O R C E

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).


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.

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.

We also offer some of the most generous R&D incentives in the world.

• 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.


S P O T L I G H T

A N I N N O VAT I V E E N V I R O N M E N 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.”


S P O T L I G H T

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

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.


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 R&D

Expenditures

R&D Expenditures at Eligible Ontario Research Institutes1

Non R&D Expenditures

Gross expenditure $ 100.00 $ 100.00 $ 100.00

Ontario—20% OBRI Tax Credit2 (20.00)

Federal investment tax credit—20% (20.00) (16.00)

Tax deduction3 $ 80 x 34.12%

$ 64 x 34.12%

$100 x 34.12%

(27.30)

(21.84)

(34.12)

Ontario exemption of federal

investment tax credit

Tax deduction3 $ 20 x 12.0%

$ 16 x 12.0%

(2.40)

(1.92)

After-tax cost of $100 expenditure $ 50.30 $ 40.24 $ 65.88

Notes:

1 Eligible Ontario research institutes include universities, colleges of applied arts and technology, research hospitals and other entities in Ontario.

2 The 20% refundable Ontario Business-Research Institute Tax Credit (OBRITC).

3 Tax rates for manufacturers: Federal 22.12% plus Ontario 12.0% = Total 34.12%.

Provincial and federal tax credits can cut the after-tax cost of a $100 R&D expenditure to $40.24.


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.

• 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.

• 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.

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 Total annual operating costs for a representative 175-worker plastic products manufacturing plant (millions of dollars)

MA $12,798

CT $12,551

NJ $12,289

PA $11,951

IL $11,618

MI $11,513

ON $11,136

Source: The Boyd Company, A Comparative Operating Cost Analysis for Plastics Manufacturing, 2005 (using Cdn$1.00 = US$0.786)

IT’S EASIER TO ESTABLISH A BUSINESS IN ONTARIO, CANADA (number of procedures)

Japan

Germany

Italy

France 7

9

9

11

U.K. 6

U.S. 5

Canada 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


S P O T L I G H T

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

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.


S P O T L I G H T

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

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 American-based production sites.


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 same-

day 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.


We can help

Looking for a place to locate or expand your plastics business?

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.

For more information about investment 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: [email protected]

Website:www.2ontario.com


ONTARIO’S PLASTICS INDUSTRY 17Ontario’s Plastics Industry 17

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.

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: [email protected] Website: www.2ontario.com

Ontario Investment Service BCE Place, TD Canada Trust Tower Suite 4040, 161 Bay Street Toronto, ON, CANADA M5J 2S1

Phone: 416-360-4647 Fax: 416-360-1817

Printed in Ontario, Canada, on recycled paper © Queen’s Printer for Ontario, 2006 311-ENG/06/06

ontario’s - advantage brantford · ontario is home to more than 2,000 flourishing plastics ......

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