BUSINESS AND INVESTMENT BULLETIN

VOLUME 5 / ISSUE 4 SPECIAL ISSUE 2002/2003

Ontario’s plastics industry

A reputation for excellence and innovation

Assembly area at Engel North America’s Guelph, Ontario facility

When Austrian-based Engel Machinery, one of the world’s largest injection moulding machine manufac-turers, 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, all the raw materials we required, proximity to major markets and available land,” explains Reinhard Rieder, Engel’s Executive Vice President of North American Operations. “Ontario was also well-known as a technology leader and both the city and the province were very welcoming.”

That was in 1975. Today, Engel North America is responsible for one-third of the company’s world-wide revenues.

And Engel is just one of more than 2,000 plastics companies thriving in Ontario. They encompass the full length of the supply chain—resins, moulds, machinery, equipment and processors—and include subsidiaries of foreign multinationals, home-grown giants and successful niche players. Among the companies operating in Ontario are Bayer, DuPont, Dow Chemical, Magna International, Royal Group Technologies, Husky Injection Moulding Systems, ABC Group, Automation Tooling Systems and Mold-Masters.

What makes Ontario so attractive to plastics industry leaders?

“The province has all the elements they require,” says Faris Shammas, Executive Director of the Ontario division of the Canadian Plastics Industry Association, “and very few jurisdictions can make that claim.

”That’s not patriotism talking. The fact is that Ontario’s plastics industry, which was established early on, thanks to an influx of sophisticated and entrepreneurial European tool makers, is today one of the largest producers within North America’s principal manufacturing belt. North America’s leader

The industry’s competitive advantages begin with an impressive infra-structure. In addition to world-scale petrochemical and oil-refining facilities and their support services—in the Sarnia, Ontario region alone there are five refineries and 19 chemical plants—the industry has access to assured feedstock supplies and reliable, economic electricity. Ontario’s rail, road, air and water links are fully integrated into U.S. net-works, and as part of the North American Free Trade Agreement, Ontario’s plastics industry has immediate and secure access to suppliers and customers throughout the continent.

Ontario also offers diverse end-user markets—among them automotive, construction, machinery, electronics and packaging—and their demands for ingenious solutions have contributed to the industry’s growth and reputation for innovation.

An industry like plastics can’t succeed without skilled and productive workers—and Ontario provides them. With close to 100,000 people working in the industry, the province has one of the most concentrated pools of plastics-related labour in North America. And Ontario’s 42 uni-versities and colleges pump out a steady supply of new talent every year. Companies that require trained personnel can also turn to the Canadian Plastics Training Centre.

“Since we began in 1993, we’ve certified hundreds of operators, set-up technicians and plastics engineering technicians,” says David Alcock, the Centre’s General Manager.

When it comes to R&D, again, Ontario delivers. Home to some of the brightest minds in the industry—and some of the continent’s lead-ing research centres—the province offers tax credits that are among the most generous in the world. When combined with those of the federal government, they can cut the after-tax cost of a $100 R&D expenditure to less than $42. With that kind of support, many companies—DuPont, Magna International and Husky Injection Moulding Systems to name a few—have established their own R&D centres in Ontario.

Finally, the province offers significant cost advantages for plastics companies. As a 2002 KPMG study confirmed, when it comes to estab-lishing, building and operating a company during its first 10 years, Canada offers the lowest costs of any G-7 country; and Ontario and Canada are the lowest-cost jurisdictions overall, offering the lowest costs in 12 high-growth sectors examined, including plastics.

“Despite a worldwide economic down-turn, Ontario’s plastics industry has continued to perform well,” says Shammas, “and to build on its reputation for excellence and innovation.”

Royal Group Technologies

Succeeding through recycling

Plastic materials are incorporated into the Canadian-made Canadarm2 system which was designed, developed, integrated and tested at MD Robotics in Brampton, Ontario

The future is looking bright for Royal Group Technologies. The Woodbridge, Ontario-based com-pany is a world leader in polymer-based home improvement, con-sumer and construction prod-ucts—a fast-growing market. With 9,400 employees, 50+ manufac-turing facilities in Canada, the U.S., Mexico, Asia, Europe and South America, Royal recorded sales of close to $1.7 billion in 2001—an 8 per cent increase over 2000. Equally impressive is the fact that a number of Royal’s products are manufac-tured using recycled plastic materials—Royal is one of the continued on back page

Royal Group Technologies’ state-of-the-art 372,000m2 industrial complex in Woodbridge, Ontario

largest recyclers of rigid PVC in the world—and other waste, including automobile trim, carpet and construction site waste. The secret to Royal’s success? “Continuous innovation,” says Mark Badger, Royal’s Vice President of Corporate Communications, “and, of course, being headquartered in Ontario. The province gives us access to a skilled and dedicated workforce, proximity to major U.S. markets and an excellent transportation infrastructure.”

INSIDE

• Ground Zero clean-up relies on Ontario firm
• New Ontario food test will save lives
• Quality of science attracts big-name CEO

All dollar figures are reflected in Canadian currency unless otherwise denoted.

The Canadian Plastics Training Centre:

Training for the industry

The Mytox composite moulding installation

When Ford Canada asked Mytox Manufacturing to produce ther-mal plastic running boards for its Ford Explorer, the company jumped at the opportunity. While Mytox, a division of Decoma International, had been making roll-form steel running boards for years, producing them in plastic was a departure for the Woodbridge, Ontario-based company, which is part of Canadian auto parts giant Magna International. “We needed to set up a plastics operation and do it very quickly,” explains Rob Lydan, Composite Technology Group Manager. To recruit the necessary skilled employees, he turned to the Canadian Plastics Training Centre (CPTC) at Humber College in Toronto, Ontario. “I didn’t bother to advertise,” says Lydan. “I’d worked at Decoma so I knew about the CPTC and its capabilities.” Established in 1993 to sup-port Ontario’s plastics industry, the CPTC offers customized technical training for people in the industry in a wide range of areas, including film extrusion, blow moulding, foam processing and injection moulding, as well as full and part-time diploma and certificate technician courses. CPTC’s clients—Husky Injection Moulding Systems, Plydex, Decoma International, among them—are a who’s who of the plastics industry. It’s not hard to see why. “The CPTC made it so easy for us,” says Lydan, who had no trou- hiring all the employees he needed.

For more information about Ontario’s plastics and chemical industries, please call: 1 800 819-8701or fill out the attached response card, or visit us at our website at www.2ontario.com.

Quality of scienceentices top-notch biotech CEO to Toronto

Affinium CEO John Mendlein in the company’s Toronto R&D facility

Two years ago Toronto, Ontario-based Affinium Pharmaceuticals was a promising proteomics-enabled drug discovery company in search of a CEO. Convinced it had found the right person in Dr. John Mendlein, an experienced biotech executive working for San Diego-based Aurora Biosciences Corp. (now Vertex Pharmaceuticals), Affinium knew the challenge would be enticing Mendlein to leave a big job and house on the beach in California for “the great white north”.

It proved to be easier than expected, thanks to the quality of Affinium’s science and the concentration of biotech talent in Toronto.

“One of the things I’d always thought was that there was a real need for a set of technologies that would allow you to develop drugs faster,” says Mendlein. “I never expected to find that set of tech-nologies and insights in Canada. I just hadn’t looked here before.”

Impressed by both Affinium and Toronto’s vibrant biotech com-munity, Mendlein decided to make the move. He and the company have never looked back. In two years, he’s raised US$33 million, recruited other American and international biotech management to help build the company and signed a US$30 million deal with American pharmaceutical giant Pfizer Inc., beating out other major global companies in the process.

And how does Mendlein like living in Toronto? “I like it here. It’s a great place to live, much more diverse and cosmopolitan than I expect-ed. I was pleasantly surprised. I love walking to work.” He adds, “And it’s incredibly exciting to be part of the next big biotech community.”

Toxin Alert

It’s called Toxin Guard™ and it’s a unique chemical test developed by Toronto, Ontario-based Toxin Alert that identifies bacteria pathogens in food stored in plastic wrap.

Using antibodies for specific pathogens such as listeria, E. coli, salmonella and campylobacter—which account for more than 80 per cent of food-related deaths according to the Atlanta, Georgia-based Center for Disease Control and Prevention—Toxin Guard’s™ technology consists of 144 invisible antibody tests attached to each square foot of wrap. When a test site detects the presence of bacteria or toxins, it chemically changes the colour or activates a fluorescent icon on the wrap, warning consumers of danger.

“What we’ve done is develop a commercial application for a science that’s been available for a long time,” says Georgia native Bill Bodenhamer, Toxin Alert’s President and CEO, who credits Ontario’s R&D capabilities and support-ive business environment for the company’s success.

Toxin Guard™, which has captured the attention of agriculture officials in both the U.S. and Canada, is set to launch commercially by the end of this year.

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OTHER PUBLICATIONS AVAILABLE:

• Area Development Magazine, 2002 Ontario Feature
• Ontario: A Profile
• Ontario: Canada’s Business Centre with regional andindustry highlights—2002 Edition
• Trade & Commerce Magazine, 2002 Ontario Report

CD ROMS AVAILABLE:

• Biomed in Ontario
• Ontario: Consider the Advantages