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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.

 

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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.

 

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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.

 

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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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