Canadian manufacturers must evolve

If Canadian manufacturers want to maintain the success that they have achieved up to this point, they will have to look beyond their historical trading partner, the United States to new and different markets.

That was the conclusion reached by a recent international manufacturing study conducted by consultants Grant Thornton LLP.

The report entitled, ''Manufacturing Insights 2006'', indicates that the rules that have governed Canadian business in the past are being fundamentally altered by the strengthening of the Canadian dollar and the impact of emerging low cost markets.

In fact, the report, according to Jim Copeland, leader of the Grant Thornton Manufacturing and Distribution Division for Canada, reveals a number of significant issues and challenges facing Canadian mid-size manufacturers.

''The fundamental conditions in this sector have been dramatically altered by the success of Canada's economy, the soaring currency, and what can only be characterized as a Canadian exports ''order book'' that is virtually monopolized by the United States.''

Adds Copeland, ''The report found that the U.S. is the primary market for 98% of Canadian mid-sized manufacturers that export to other nations.

''A stronger Canadian dollar, rising commodity prices that are putting pressure on prices, and decrease in U.S. manufacturer confidence with the rise of China as a U.S. trading partner...these factors should all be a red flag to the Canadian manufacturing sector.''

Manufacturing Insights 2006 is an international survey of the mid-sized manufacturing sector in key global markets. Toronto-based market research firm Research Dimensions conducted interviews with senior executives among the 1,635 survey respondents in 22 countries worldwide.

According to the report, Canadian companies must diversify their export markets, both to sustain success and hedge in what is an increasingly global marketplace.

''Canadian manufacturers can no longer take comfort in having the U.S. as virtually its sole consumer. The real opportunities lie in developing new markets in emerging economies to both balance and mitigate against the risk of having one customer,'' the report states.

Canada's mid-sized manufacturers contribute to a vital sector that represents 21% of the nation's GDP-or 55% when spinoff goods and services purchases are included. According to the report, this represents over $25 billion of capital investment and an added-value of $200 billion to the Canadian economy.

Furthermore, the report notes that Canada's mid-sized manufacturers conduct an estimated $400 billion in export sales and provides direct and supporting employment for 4.7 million Canadians.

Although the report indicates that Canadian companies are optimistic given the sector's recent success and profitability, Copeland warns that that this optimism should be kept in perspective.

''The sense of optimism that many Canadian manufacturers reported is likely more a reflection of their own recent performance and the record economic performance of the Canadian economy at large. It has been historically exceptional, but at the same time it has been influenced by a sole-source relationship with the United States,'' he says.

Jerry Cook
Editor, MPP
jcook@clbmedia.ca 

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Cincinnati wins order from Quebec firm

Cincinnati Machine, Hebron, KY has been awarded an order from RTI Claro, Montreal, QC for a dual gantry, five-axis wide-range profiler.

RTI Claro, which is a machining and assembly solutions provider to the aerospace market, will utilize the machines to simultaneously machine titanium structures made from extruded product. The machines employ powerful, 7,000 rpm, 70 hp gear-driven spindles.

The dual gantry configuration will operate on 240 ft. of X-axis rail with multiple spindles delivering full five-axis contouring capabilities. A newly re-designed spindle support housing reduces overall moving mass and will significantly improve Z- and B-axes servo response and machining dynamics. The first gantry is scheduled to ship from Cincinnati Machine in April, 2007 with the second gantry shipping the following July.

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