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BUSINESS MONITORCTT, CAMBRIDGE STRENGTHENLINKS WITH CHONGQING, CHINAWhile most recent trade efforts of Canada’s Technology Triangle have been focusedon South America (see feature story in this edition of Exchange), a lotof local attention continues to be paid to the links being forged with China, especiallythe Chongqing region.A Memorandum of Understanding between Waterloo Region’s CTT andChongqing has been signed, and Cambridge Mayor Doug Craig has gone onrecord concerning the importance of the growing relationship.In later September, it was announced by CTT that “Canada’s Technology Triangle(CTT) and Chongqing State-owned Assets Supervision and Administration Commission(CQ SASAC) have expressed their mutual wishes to work together to promotecommunication and cooperation in economic and trade investment andadvanced manufacturing technology between the stated-owned enterprises ofChongqing and Waterloo Region, in order to improve international influences anddevelopment.’The Memorandum of Understanding, signed by John Jung, CEO, CTT and Gan Jiazheng,Deputy Counsel, CQ SASAC, commits both organizations to work cooperativelyto increase the mutual understanding of issues such as investment,hi-technology promotion, technology transfer, information and experience sharingregarding regional investment policies, preferential policy, industry developmentas well as enterprise services. Further, the two groups agree to exploreopportunities in regional business development, investment, and capital injection,promotion and application of new technologies, financial service, humanresource exchange, and intelligent management. The organizations will set up aworking group to coordinate regular communication, update progress, and discussfuture cooperation in dealing with matters of joint interest.The Chongqing Municipality is the fastest growing area in China with 16.5% GDPXQuarterly – www. xquarterly.ca• In the Kitchener-Cambridge-WaterlooCensus Metropolitan Area, constructionbegan on 405 homes inSeptember, a strong increase fromthe 145 units started in the samemonth last year and the highestSeptember total since 2002, accordingto CMHC.• Apartment starts pushed the increase;only 80 detached homeswere started in September.• Builders started 167 dwellings in thethird quarter of 2011 in the theGuelph Census Metropolitan Areadownfrom a stronger 229 unitsstarted in the Q3 last year.•• The seasonally adjusted annual rateof housing starts in Canada was205,900 units in September, upfrom 191,900 in August 2011.• Following two months of littlechange, employment rose by61,000 in September, all in fulltime. This increase pushed the unemploymentrate down 0.2 percentagepoints to 7.1%, the lowest ratesince December 2008.• In the 12 months to September, employmentgrew by 1.7%(+294,000), primarily in Ontarioand Alberta.• In September, employment increasedamong the self-employedand public sector employees. Comparedwith 12 months earlier, employmentgrowth in the privatesector (+2.2%) was faster than thatof the public sector (+1.1%), while12 | w w w . e x c h a n g e m a g a z i n e . c o mself-employment rose 0.6%.• Employment fell by 35,000 in finance,insurance, real estate andleasing. Compared with a year earlier,employment in this industry isdown by 1.4% (-15,000).• Following little change in the previousthree months, employment inmanufacturing was down 24,000 inSeptember.This decline leaves employmentslightly above its level ofSept. 2010 (+0.8% or +13,000).• While employment in constructionwas little changed in September, itwas up 4.1% (+50,000) from ayear earlier, one of the highestgrowth rates of all industries.• Ontario employment was littlechanged for the second consecutivemonth and the unemployment ratewas 7.6%. Over the past 12months, employment increased by2.0% (+136,000), above the nationalgrowth rate of 1.7%.• CFOs were asked, "Aside from poorperformance, which one of the followingfactors is most likely to leadto a failed hire?" Their responses:mismatched skill set, 29%; Unclearperformance expectations, 23%;Personality conflicts, 22%; Failure tofit into corporate culture, 14%.• Tourism spending in Canada edgeddown 0.1% in the second quarter,following seven consecutive quarterlygains averaging 0.9%. Highernon-resident tourism spending inCanada was offset by lower spend-PHOTO: Supplied by CTTWaterloo Region Delegates: Marlene Coffee, City of Waterloo; Darryl King, Logikor; David Heppler,CTT; Mayor Doug Craig, City of Cambridge; Mayor Carl Zehr, City of Kitchener; Ann Gray, CTT; JohnJung, CTTDelgates from China: William Zhao, Trade Commissioner, Canadian Consulate; Jiazheng Gan, DeputyDirector General, Chongqing State-owned Assets Supervision and Administration Commission; FengYan, Deputy Director,Chongqing State-owned Assets Supervision and Administration Commission;Xiaofeng Liu, CFO, Chongqing City Transportation Investment Group; Nongcheng Wang, Deputy ChiefChongqing Machinery and Electronic Holding (Group) Co., Ltd; Shuyu Chen, Engineer, ChongqingMachinery and Electronic Holding (Group) Co., Ltd;growth rate (6.9% higher than national average). The municipality of Chongqingplans to invest $30 Billion USD overseas in natural resources, agriculture products,resource processing, and equipment technologies over the next four years.“This is a great achievement for Waterloo Region and CTT Inc.”, said Jung. “Thisformal agreement further solidifies the work we’ve been doing to build businessrelationships in China over the past eighteen months.We look forward to continuingto explore opportunities for investment and trade while reinforcing our commitmentto working with the Chongqing area.”CTT Inc. signed a similar MOU with the Chongqing Industrial Service Center(CQISC), a subsidiary of CQ SASAC, this past May.A CQ SASAC delegation visited Waterloo Region on Monday, September 26.Theyspent time at CTT offices learning more about Waterloo Region, formalizing theMOU, and participating in a round table discussion with key municipal and corporateleaders. Attendees included City of Cambridge Mayor Doug Craig, City ofKitchener Mayor Carol Zehr, and City of Waterloo Mayor Brenda Halloran (who willbe visiting the area of Chongqing with the Waterloo Ambassador Committee andCTT Inc. this November). The group also toured the Communitech Digital MediaHub and Accelerator and various University of Waterloo initiatives such as WAT-Car, Student Design Center, and Automotive Research Labs.Meanwhile, Mayor Craig, in recent his “State of the City Address”, said that exploringthe opportunities in China is high on the radar for Cambridge.ing by Canadians at home.• Spending by international visitors inCanada was up 1.4%, as travel fromboth the United States and overseasmarkets increased in the secondquarter.• Kitchener and Cambridge area employersexpect a moderate hiring climatefor the fourth quarter of 2011,according to the latest ManpowerEmployment Outlook Survey, whichsays 13% of employers plan to hirefor the quarter (October to December),while 5% anticipate cutbacks.Another 82% of employers plan tomaintain their current staffing levelsXQuotefor the upcoming quarter.• Canada's net international indebtednessincreased a further $5.1 billionto $217.8 billion at the end of thesecond quarter, according toStatscan. This marked a ninthstraight quarter of increases in netforeign debt, consistent with stronginflows of funds to the Canadianeconomy over this period.• Canada's international liabilities advanced$27.3 billion in the secondquarter, led again by non-resident investmentin Canadian securities andto a lesser extent by foreign direct investmentin Canada.“After tumbling sharply downward in August, small business confidence inCanada held its own in September. CFIB's Business Barometer Index was 62.7for the month, up a point from its August level, but still well below the near-70mark for most of early 2011. September's one-point gain is within the margin oferror for the indicator, so although not a solid sign of improvement, it suggeststhat the economy is not accelerating downward. Concern over fallout from the fiscalcrises in the US and Europe spreading to Canada is still with us, but for themost part, small business operating plans and expectations are tilted towardstability, if not to modest growth.”- Ted Mallett, Vice-President & Chief Economist,Canadian Federation of Independent Business
Adapting by Adopting a Historic ProductIt’s not rare to read about a companythat is adapting to survive – it’s thetheme of almost every business successstory in this decade. But it maybe unusual to learn of a business thatis building success by returning to itshistorical roots. And that’s the pathbeing followed by Riverside Brass.This New Hamburg company – officiallyRiverside Brass and AluminumFoundry Limited – was founded in1966. For decades, its bread and butterhas been in the industrial castingsbusiness. One major product is sprinklerheads used in new building construction;Riverside produces them bythe thousands.However, recent years have broughtchallenges to the construction business,world-wide, as well as growingoff-shore competition. Riverside BrassPresident David Seyler admits that“times got tough a few years ago.”So Riverside Brass has added anarm that looks back to the heritage ofthe brass business – the company isnow aggressively marketing theirbronze plaque division. It’s a uniqueniche, because over the years, mostbusinesses producing these plaqueshave gone out of business. But Seylersays the company already had most ofthe necessary, modern equipment;some state-of-the-art finishing equipmentwas added.“We have the cuttingedge equipment to create the qualityand the detail...This was a natural fit,”he says.The plaque division now includes fiveemployees who focus on that part ofthe business, full or part time. A keymember of that team is sales rep KoryGreen, who shares marketing responsibilitieswith Linda FultonSeyler says that the goal is for one-offplaques to become 10% of the annualRiverside Brass business.Riverside Brass has historically produceda few plaques annually, but thenew thrust is a brand new approach,marketing unique plaques to heritageorganizations, and for memorials. Thecompany is also targeting governments,including potential federal,provincial and municipal markets.Seyler points out that currently, mostRegion Gets a Bit of the BluesMichael HarrisRob LeoneJohn MilloyProvincial ridings in the south-central Ontario regionserved by Exchange Magazine emerged fromthe October provincial election somewhat more bluethan had been true, going in. While several politicalveterans, both Progressive Conservative and Liberal,held onto their seats in the election, two area seatschanged hands, both moving from Liberal to Conservative,and a new PC replaced a retiring Tory in Cambridge.Liberals John Milloy (Kitchener Centre) and Liz Sandals(Guelph) retained their seats – Milloy by a verynarrow, 323-vote margin over PC hopeful Dave Mac-Donald, Sandals with a decisive win. But after that,it was all blue. Long-time MPP Elizabeth Witmer wonher Kitchener-Waterloo riding by about 3,500 votes;veteran Ted Arnott took Wellington-Halton Hills with55.6% of the vote.But three new PC faces will represent the area atQueen’s Park – Michael Harris, who defeated incumbentLiberal Leeanna Pendergast in Kitchener-Conestoga;Rob Leone, who succeeded fellow PC GerryMartiniuk in Cambridge; and giant-killer Randy Pettapiece,who brought down Liberal cabinet ministerJohn Wilkinson in Perth-Wellington in a close race.Newly minted MPP Michael Harris spoke to ExchangeMagazine about the role local MPPs will playin the government, especially the local Tories whowill sit in Opposition as the Liberals form a minoritygovernment.Asked specifically about issues related to business,he pointed to job creation. “Private sector job creationhas to be a focus of this government. This hasto be number one.” He noted that private sector jobsare especially key because “a private sector job isone you and I don’t have to pay for.”Harris said that during his campaign – his riding coversmuch of rural Waterloo Region, but also a largesection of the city of Kitchener – he heard a lot ofPHOTO: PAUL KNOWLESof “our tax dollars” being spent for thelarge number of plaques erected bygovernment is going out of the country.Green says that most plaques arebeing imported from Australia and theUS.At this time, Seyler is aware of onlyone other Canadian company, locatedin western Canada, which is producingplaques.As potential buyers have becomeaware that Riverside Brass can meettheir needs, the response has been“very positive,” says Green. Seyleradds,“the reaction has been very, verystrong.”Green sums up the marketing strategysimply: “bronze is a timeless material,”and bronze plaques are anBUSINESS MONITORRiverside Brass President David Seyler, right, and plaque division representative Kory Green.ideal way to “dedicate, commemorate,identify and recognize.”Because of the unique nature ofeach plaque – there is a large rangein size and complexity – costs varyfrom plaque to plaque, and the numberthat the factory can producevaries in the same proportion.“We cando between 20 and 200 plaqueseach month, depending on the complexity,”says Green. It’s a new thrustfor the company, but plaques fromRiverside Brass have already beenerected in France, Germany, and fromOntario west to British Columbia.Seyler says that his company is also“anticipating the opportunity of workingwith some of the major retailers inCanada.” - Paul Knowlesnegative commentsabout “red tape”. Hebelieves that he andhis PC colleagues willhave the opportunity,in the minority situation,to press issueslike this. He told Exchangeabout industrieswhere simplymoving a machinefrom one building toanother, on the sameproperty, can cost thebusiness owner tensof thousands of dollarsbecause of governmentalregulationsand permits.“We’ll bepushing for a reductionElizabeth WitmerLiz Sandalsin red tapeacross the board,” hesaid.This can be a hugeissue for small businessesand farm businesses,Ted ArnottRandy Pettapiecewho have told him, “we have to go to so many different agencies to getan answer.” It’s time for government to “streamline the process,” he said.That same kind of overkill is happening because of high power costs, he said.Harris will urge the provincial government to bring costs in line with other jurisdictionscompeting for the same multi-national companies.Harris also said his Tory blue colleagues will continue to push for lower corporatetax rates. - Paul KnowlesN O V E M B E R / D E C E M B E R 2 0 1 1 | 13
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