May 28, 1999
(Development and Rural Renewal)
Province unveils strategy to
support development of small-scale manufacturing industry
Beaton Tulk, Minister of
Development and Rural Renewal, today unveiled a new provincial strategy for
development of small-scale manufacturing in Newfoundland and Labrador.
"The results of the
research undertaken in the development of this strategy clearly show that
small scale manufacturing is a propulsive growth sector of the global
economy and that manufacturers in this province can compete in the global
marketplace," Mr. Tulk said. "It has also been shown that our
geographic location is no longer the impediment it used to be. Dramatic
changes in manufacturing processes and transportation systems have reduced
or removed many of the obstacles to doing business in this province."
"The development of
small-scale manufacturing can help diversify our economy and create new
employment opportunities in all parts of the province, including rural
areas. It is a strategically important aspect of government's overall jobs
and growth agenda," Mr. Tulk said.
Total manufacturing
shipments from the province currently exceed $1.8 billion and provide the
equivalent of more than 17,500 full-time jobs. In the area of small scale
non-resource based manufacturing (i.e. outside the traditional fishery,
mining, forestry and petroleum sectors), over 400 firms employ more than
8000 people B up 40 per cent since 1996.
"We are committed to
ensuring that this growth not only continues, but is enhanced, especially in
rural areas. The implementation of the strategy I am releasing today will
help accomplish that," Mr. Tulk said.
Manufacturing Development: A
Strategy for Small-Scale Manufacturing in Newfoundland and Labrador
identifies five key areas of strategic action to develop small scale
manufacturing. The primary focus of the overall strategy is the adoption of
emerging international manufacturing "best practices" and the
establishment of a supportive government environment to maximize sector
development in this province. Mr. Tulk said: "Our research clearly
shows that firms which adopt small-scale manufacturing best practices export
more, grow faster, employ more people and become more profitable than those
firms which fail to adopt best practices."
The five areas of strategic
action to develop the full potential of small-scale manufacturing are as
follows:
-
Targeting small-scale
manufacturing as a development priority in the province.
-
Informing and educating
manufacturers, industry associations, educators, community development
organizations, and government agencies of
the key trends and "best practices" for small-scale
manufacturing success.
-
Assisting small scale
manufacturers in Newfoundland and Labrador and adopt manufacturing
"best practices" to improve sales,
exports, profitability and employment generation.
-
Identifying, supporting and
marketing provincial and regional strengths and opportunities in
specific sectors within the small-scale
manufacturing industry.
-
Partnering with both levels
of government, industry, education and training institutions, community
development organizations,
municipalities and organized labour to create a coordinated and
sustained approach to growing the small scale manufacturing industry.
"By implementing these
strategic actions in a sustained and coordinated manner, small-scale
manufacturers in Newfoundland and Labrador will be able to thrive in an
environment which enhances their efforts individually and
collectively," said Mr. Tulk. "The end result will be a stronger
and more diversified economy in all areas of the province and the creation
of sustainable new employment for Newfoundlanders and Labradorians."
Speaking on behalf of the
industry, Lorne Janes, Chair of the Alliance of Manufacturers and Exporters
Newfoundland, said the alliance "wholeheartedly endorses the direction
and actions of this strategy. This clearly shows the commitment of the
provincial government to development of this sector."
Mr. Tulk emphasized that
development of the strategy "has been a team effort, and implementation
will be even more so." He acknowledged the participation of the
alliance, other provincial agencies and the federal government in the
initiative to date, and thanked them for their support and participation.
The strategy was developed
following a series of research initiatives led by the Department of
Development and Rural Renewal, in partnership with other provincial and
federal agencies, including the Department of Industry, Trade and
Technology, the Atlantic Canada Opportunities Agency, Industry Canada, Human
Resources Development Canada and other stakeholders, including the alliance.
Background research, which was
funded under the Canada-Newfoundland and Labrador Agreement on Economic
Renewal, included a survey of global trends and approaches to small-scale
manufacturing support in nine other jurisdictions in North America and
across the North Atlantic Rim. It also involved a comparative case study
analysis of 60 small-scale manufacturers in Newfoundland and Labrador,
Prince Edward Island, Iceland and the Isle of Man.
Implementation of the new
strategy has already begun with the establishment of a Manufacturing
Development Forum, a multi-stakeholder group that will bring together all
key government, industry and community economic development organizations to
coordinate the implementation of the strategy.
Media contacts:
Josephine Cheeseman
Communications Director
Development and Rural Renewal
(709)
729-4570
Burf Ploughman
Executive Director
Alliance of Manufacturers and Exporters Newfoundland
(709) 772-3227
1999 05 28
11:05 a.m.
--------------------------------
BACKGROUNDER
Small Scale Manufacturing - A Renewed Focus
What is Small Scale
Manufacturing?
-
Small Scale Manufacturers
are those non-resource based manufacturers who generally employ less
than 100 people, with the average being below 50. It does not include
firms involved in primary fish processing, pulp and paper production,
mining, and oil refining.
Development of the Strategy
-
A team approach was taken in
developing this strategy - led by the Department of Development and
Rural Renewal in partnership with the Department of Industry Trade and
Technology, Atlantic Canada Opportunities Agency, Industry Canada, Human
Resources Development Canada, the Alliance of Manufacturers and
Exporters Newfoundland, Memorial University, College of the North
Atlantic, and the Bishop's Falls Development Corporation.
-
Three background research
projects were undertaken:
- Global Trends Analysis - identification and explanation of trends in
small scale manufacturing practices and processes on a worldwide basis.
- Jurisdictional Comparison - Review and analysis of the development
supports and strategic approaches taken to growing small scale
manufacturing in
Newfoundland and Labrador, New Brunswick, Nova Scotia, Prince
Edward Island, Iceland, Ireland, the Isle of Man, the North Bay region
of Ontario,
and the Appalachia region of Kentucky.
- Company Case Studies - An examination of 60 firms in Newfoundland and
Labrador, Prince Edward Island, Iceland and the Isle of Man to determine
critical success factors.
Why focus a strategy on Small
Scale Manufacturing?
- It is a growth sector
nationally and internationally.
- Global trends in
manufacturing processes and advances in transportation systems favour
small flexible manufacturers today.
- It is viable in rural
communities throughout the province.
- It provides stable
year-round employment opportunities - generally well-paying.
- It is export oriented -
which creates new economic activity and new returns to the provincial
economy.
- Newfoundland and Labrador
has a solid base to work from, with over 400 non-resource based firms
employing over 8000 people.
- Newfoundland and Labrador
communities can offer a cost competitive environment in which to operate.
- It is a sector whose capital
investment requirements are modest.
-------------------------------
HIGHLIGHTS OF THE RESEARCH
-
Major shifts are occurring
in manufacturing business strategies around the world. These changes are
being driven by globalization of the economy, which is creating new
business opportunities but also exposing manufacturers to increased
competition.
-
In order to compete in the
global market, traditional mass manufacturers are restructuring to focus
on a more limited range of specialized production lines. This is
commonly referred to as concentrating on a core competency. Activities
that cannot be done competitively in-house are increasingly being
out-sourced or secured through partnerships, joint ventures or strategic
alliances with firms that have the required core competency.
-
Furthermore, as
transportation and communication linkages have improved worldwide,
customers are no longer limited by geography as they once were.
Increasingly, they are seeking out the most competitive manufacturers to
meet their needs - regardless of size or location.
-
These changes are generating
major new opportunities globally for those small scale manufacturers who
focus on particular manufacturing specialities, market niches or
products. In manufacturing today, bigger is no longer necessarily
better.
-
In an era of global
competition, small scale manufacturers must focus on what they do best -
their "core competencies" - and learn to market their
production effectively to maximize sales.
-
Manufacturers must seek out
information on new production and marketing techniques by
"benchmarking" themselves against other firms on the national
and international stage.
-
Manufacturers must adopt a
commitment to quality processes which monitor and meet customer needs in
all aspects of production and sales.
-
As they focus on their area
of core competence, manufacturers must practice flexible manufacturing,
so that every opportunity to apply their competitive advantage is
exploited.
-
With increased opportunities
through out-sourcing by other firms, small scale manufacturers must
learn to work with other firms in business networks and learn how to
manage their place in the supply chain by adopting quality certification
procedures, utilizing information technology and mastering
transportation logistics so they can deliver "just-in-time".
-
Firms that adopt
manufacturing "best practices" tend to export more, grow
faster, employ more people and become more profitable than small scale
manufacturers who fail to adopt such practices.
------------------------------------
EXAMPLES OF SUCCESSFUL SMALL SCALE MANUFACTURING COMPANIES IN
NEWFOUNDLAND AND LABRADOR THAT HAVE ADOPTED "BEST PRACTICES"
Dalton's Casket Manufacturing
Kevin Dalton started manufacturing burial caskets in Cape Broyle in 1991. He
produces 750 caskets a year for local use in 13 different models ranging
from plain birch to highly polished oak and employs 10 people. He also
produces a collapsible model for export to Iceland. The company has been
growing 30 per cent a year for the last five years. There are approximately
67 funeral homes in Newfoundland and Labrador and 3,800 funerals a year.
Fibreglass Works Ltd.
Brian Pickett owns and operates Fibreglass Works in Centreville where he
manufactures computer-designed fibreglass 18 to 30 foot work and pleasure
boats that are exported to France, Grenada, Boston, New Jersey,
Saskatchewan, British Columbia and the Northwest Territories. The boats have
a reputation for good rough weather handling. Since the cod moratorium, most
of the company's competitors have vanished, but Fibreglass Works carries on
making 90 boats a year, one-third for export. Fibreglass Works employs
between five and 20 people year round and in summer operates two shifts.
Genesis Organic
Bob Richards established Genesis Organic in Corner Brook in 1995 to
manufacture high grade compost made with wood bark and fish offal. The
company employs 20 people and produces more than 500,000 bags of compost a
year. Production is expected to rise to two million bags by 2002. Current
sales are as follows: provincial markets (10 per cent), national markets (60
per cent), international markets (30 per cent). Genesis supplies Loblaws
with compost under its President's Choice label, and provides expertise to a
joint venture with Mesharac Recycling in the Middle East.
Glamox Limited
Glamox Limited, an international company, established a plant to produce
small lighting units for ships and offshore oil rigs in Trepassey in 1991.
Glamox also has a marketing office in St. John's. The Glamox group is 50
years old and is the world's leading supplier of marine/offshore lighting.
Their Trepassey plant employs 27 people.
Hi-Point Industries
Hi-Point Industries (1991) Ltd. of Bishop's Falls manufactures a peat-based
product that absorbs oil while repelling water. This Newfoundland-invented
product is ideal for controlling oil spills at sea. Of the approximately 100
companies worldwide that manufacture oil absorbents, only three use
peat-based products, and Hi-Point is considered the leader. Its products
were used to contain the Exxon Valdez oil spill in Alaska. The company has a
workforce of eight people year round which increases to 23 at peak times.
Lotek Marine Technologies Ltd.
St. John's based Lotek Marine Technologies is a bio-telemetry company that
designs and manufactures equipment for tracking fish and wildlife. Animals
are fitted with tiny audio and radio transmitters that allow scientists to
follow the animals by satellite almost anywhere in the world. Tagged animals
can be as small as a salmon smelt or as big as a moose or a whale. Lotek and
its sister company in Newmarket, Ontario have products in 34 countries and
on every continent. One tiny device, half the length of an AAA battery, has
a megabyte of memory and can measure and record temperature, light and water
pressure every minute for a year. Lotek has 25 employees.
Terry's Tents
In 1992, Terry Whey of Goose Bay began a shoe repair business which proved
so successful that his customers asked him to make other sewn products. He
now makes knapsacks, leather mitts, boat covers, trailer covers, rotor
covers for helicopters and, of course, tents, particularly for mineral
prospectors. Terry Whey has expanded his business property three times,
employs six people and travels nationally to buy supplies and gather new
ideas.
Woodpick Enterprises
Woodbine Waterman created Woodpick Enterprises Inc. in Wareham in 1989 to
produce value-added seafood products, including sea urchin roe or uni, and
smoked salmon. His major markets include Canada, Japan, Mexico, Switzerland,
and the United States. Woodpick won the Newfoundland and Labrador Export
Award for Manufacturing Companies in the Small Business Category in 1996.
The company employs up to 70 people at its peak season.
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