|
|
|
|
|
McGuinty Government Investment Helps Create 3,000 Jobs
$1.1-Billion Linamar Investment Strengthens Auto Parts Industry,
Brings New Opportunities To Ontario Families
GUELPH - The Ontario government is partnering with Linamar Corporation to create an advanced manufacturing technology centre that will help create 3,000 well-paying, highly skilled jobs and help build opportunity for families, said Premier Dalton McGuinty.
"Our government is building opportunity by ensuring that Ontario has the
most highly skilled workforce in North America," said Premier McGuinty. "Our
investments are paying off for Ontario families - high-quality jobs, like the
ones we're announcing today, allow working parents to get ahead, save and
invest in their children's future."
The Linamar investment will establish a new Technology Centre dedicated
to innovation in the engineering and production of automotive powertrains.
This will strengthen the competitiveness of Linamar's 22 Guelph-area plants
and contribute to additional plants in the area. The government is investing
$44.5 million to help establish the centre, support research and development
and invest in skills training for workers.
Economic Development and Trade Minister Joseph Cordiano joined Premier
McGuinty at the announcement.
"Our government is committed to supporting this industry, which employs
thousands of Ontario families. Linamar is showing excellent leadership and
helping to make this province a top jurisdiction for innovative automotive
parts engineering and production," said Cordiano. "Building our technology
capability is how our auto parts makers will stay competitive. This investment
will create huge opportunities for Ontario workers to be well-trained in
high-value, leading-edge jobs."
With today's announcement, the Province's successful automotive
investment plans have now leveraged nearly $7 billion in innovative projects
including:
- The $1.1-billion Toyota Woodstock facility, the first new greenfield auto assembly plant in two decades
- A historic $2.5-billion investment in GM's Beacon Project to build a
new engine that will reduce fuel consumption and set new
environmental standards
- Ford's $1.1-billion investment in its Oakville assembly complex
- A $768-million DaimlerChrysler investment in Windsor and Brampton
- Navistar's $270-million investment in heavy truck manufacturing in
Windsor and Chatham
- Nemak's $100-million Windsor investment to launch a new innovative
engine block process.
>>
"The auto sector is one of the pillars of our economy - and by investing
in leading-edge manufacturing, we're making sure that Ontario remains one of
the most competitive locations in the world for investment," said Premier
McGuinty. "In today's economy, the best jobs go to the places with the most
highly skilled people and our government will continue working with
manufacturers to make Ontario the place to be."
|
Linamar Will Spend More Than C$1 Billion to Expand
Bloomberg - On May 12, Linamar Corp. Canada's second-largest auto-parts maker, will spend more than C$1 billion ($900 million) with the help of a government grant to build a research and development center, the Ontario government said.
The center will be constructed in Guelph, Ontario, where the company's headquarters are located, and the grant will contribute C$44.5 million to the C$1.1 billion project, the provincial government said in a statement on its Web site.
Linamar will train about 3,000 employees at the center during the next five years. In November, the company said it expected 2006 to be a year of ``growth preparation'' as factory production is shifted to make new engines and six-speed transmissions now being used in the auto industry.
A separate release by the company, which employs 10,000 people at 36 plants, didn't specify how much it plans to spend on the expansion. Chief Financial Officer Peggy Mulligan didn't return a telephone call to Bloomberg News.
The company operating in Canada, Mexico and Europe, had a profit of C$100 million, or C$1.41 a share, on revenue of C$2.16 billion last year.
Linamar shares rose 22 cents, or 1.5 percent, to C$15.23 at 12:57 p.m. in trading on the Toronto Stock Exchange.
|
Message from the Mayor - Big news from Linamar; “thrilling” news for Guelph.
Auto parts giant announces $1.1 billion technology investment in Guelph
Mayor Kate Quarrie is thrilled with Linamar and the provincial government’s announcement about the company’s $1.1 billion expansion, unveiled this afternoon at Camcor on Arrow Road in Guelph.
“Linamar Corporation has long been one of Guelph’s outstanding success stories. May 12's announcement – and what it means for this community – is extraordinary news for the city.
The expansion, reported as one of the biggest capital spending and job creation programs undertaken by a Canadian auto parts company, will create about 3,000 new jobs over the next several years.
At the May 12 news conference, Mayor Quarrie praised Linamar Corporation for its extensive contributions to the community; for its remarkable corporate citizenship, and for its commitment to quality. “We are extremely proud to have a company like Linamar in our roster of businesses.”
Further, Mayor Kate Quarrie warmly congratulates Linda Hasenfratz, President and Chief Executive Officer of Linamar Corporation, for her receipt of the Business, Labour, and Entrepreneurs Women’s Award as part of the Women of Distinction Awards held at the River Run Centre last night.
“Ms. Hasenfratz is a remarkable woman; she has proven herself as a business person with tremendous acumen. She’s more than a positive example for women in the business world; her outstanding leadership and management skills make her a model for business executives everywhere.”
|
GE Expands Capability to Deliver Custom Silicone Rubber Products to Latin America with Expansion of Itatiba Facility
Will Help Customers Lower Production Costs and Accelerate Time to Market
ITATIBA, Brazil - GE - Advanced Materials, Silicones today announced the expansion of existing facilities at its Itatiba plant in Brazil for the development and production of silicone rubber products, customized to help Latin American companies in the automotive, power transmission, health care and other industries lower their production costs and accelerate time to market.
By establishing a dedicated Latin American production and development facility, GE - Advanced Materials, Silicones will be able to collaborate more closely with customers in Brazil and other Latin American countries to reduce the time it takes to develop customized silicone rubber products, test them at the customer's facility and then manufacture and deliver the final product. Customers also will benefit from production costs that are lower in Brazil than in the U.S. and other regions.
"With the growth of demand for our specialized silicone rubber products in Latin America, we realized the time was right to invest in capabilities that could help customers in the region better leverage GE's custom application development and production expertise," said Tim Angle, America's marketing and application development manager for RTVs and Elastomers, GE - Advanced Materials. "The silicones development and production facility in Itatiba will strengthen our ability to rapidly create and deliver silicone rubber compounds that meet the specific requirements of companies in Latin America."
Until now, manufacturing of custom silicone rubber products for the Latin American market has been performed at GE's U.S. facilities. Moving production and development to Itatiba will make it possible for GE and its customers to eliminate the time and expense of importing and exporting materials between the U.S. and countries in Latin America.
The Itatiba facility will be focused on producing materials for automotive gaskets and O-rings, high voltage insulators for the power transmission industry and products for the health care industry. The GE Silicones Itatiba facility is currently delivering custom silicones products for companies in Brazil and will soon be delivering products for companies in Chile and Colombia. The company is targeting the Argentinean and Venezuelan markets for later this year.
GE Silicones offers an expansive portfolio of heat-cured elastomers (HCEs), liquid silicone rubbers (LSRs), and room temperature vulcanization materials (RTVs) that provide a range of viscosities, curing mechanisms and performance qualities. |
Magna announces first quarter results
AURORA - Magna International Inc. reported financial results for the first quarter ended March 31, 2006. We posted record sales of $6.0 billion for the first quarter ended March 31, 2006, an increase of 5% over the first quarter of 2005. The higher sales level in the first quarter of 2006 reflects increases of 6% in North American average dollar content per vehicle and 8% in European average dollar content per vehicle, each over the comparable quarter in 2005. During the first quarter of 2006, North American vehicle production increased 4% and European vehicle production declined 3%, each in comparison to the first quarter of 2005.
Complete vehicle assembly volumes increased 35% for the first quarter of 2006 compared to the first quarter of 2005. However, as a result of the weakening of the euro against the U.S. dollar and a slight decline in assembly volumes for vehicles accounted for on a full cost basis, complete vehicle assembly sales declined 8% or $86 million to $1.0 billion for the first quarter of 2006 compared to $1.1 billion for the first quarter of 2005.
Our operating income was $309 million for the first quarter ended March 31, 2006 compared to $254 million for the first quarter ended March 31, 2005, and we earned net income for the first quarter of 2006 of $212 million, compared to $172 million for the first quarter of 2005.
Diluted earnings per share were $1.91 for the first quarter ended March 31, 2006, compared to $1.68 for the first quarter ending March 31, 2005.
During the three months ended March 31, 2006, we generated cash from operations before changes in non-cash operating assets and liabilities of $427 million, and invested $225 million in non-cash operating assets and liabilities. Total investment activities for the first quarter of 2006 were $379 million, including $203 million to purchase subsidiaries, $167 million in fixed asset additions, and a $9 million increase in other assets.
A more detailed discussion of our consolidated financial results for the first quarter ended March 31, 2006 is contained in the Management's Discussion and Analysis of Results of Operations and Financial Position and the unaudited interim consolidated financial statements and notes thereto, which are attached to this Press Release.
OTHER MATTERS
We also announced that our Board of Directors yesterday declared a quarterly dividend with respect to our outstanding Class A Subordinate Voting Shares and Class B Shares for the quarter ended March 31, 2006. The dividend of U.S. $0.38 per share is payable on June 15, 2006 to shareholders of record on May 31, 2006.
We also announced today pending changes to our stock symbols on the Toronto Stock Exchange ("TSX"). Commencing May 8, 2006, the Class A Subordinate Voting Shares of Magna International Inc. will revert back and trade under the stock symbol "MG.A", and the Class B Shares will revert back and trade under the stock symbol "MG.B". These changes result from the TSX discontinuing its symbol extension program. The stock symbol, "MGA", for the Class A Subordinate Voting Shares on the New York Stock Exchange is not affected by these changes.
2006 OUTLOOK
While we are pleased with our results in the first quarter of 2006, there are a number of risks and uncertainties affecting the automotive industry as set out in the Forward-Looking Statements section of this press release. If any of these risks or uncertainties were to materialize, our results for the balance of the year could be negatively impacted. As a result, we are not providing an outlook for the balance of 2006.
We are the most diversified automotive supplier in the world. We design, develop and manufacture automotive systems, assemblies, modules and components, and engineer and assemble complete vehicles, primarily for sale to original equipment manufacturers of cars and light trucks in North America, Europe, Asia and South America. Our capabilities include the design, engineering, testing and manufacture of automotive interior systems, seating systems, closure systems; metal body systems; exterior and interior mirror and engineered glass systems; plastic body, lighting and exterior trim systems, various powertrain and drivetrain systems; retractable hard top and soft top roof systems; as well as complete vehicle engineering and assembly.
We have over 84,000 employees in 224 manufacturing operations and 60 product development and engineering centres in 22 countries.
MAGNA INTERNATIONAL INC.
Management's Discussion and Analysis of Results of Operations and Financial Position
All amounts in this Management's Discussion and Analysis of Results of Operations and Financial Position ("MD&A") are in U.S. dollars and all tabular amounts are in millions of U.S. dollars, except per share figures and average dollar content per vehicle, which are in U.S. dollars, unless otherwise noted. When we use the terms "we", "us", "our" or "Magna", we are referring to Magna International Inc. and its subsidiaries and jointly controlled entities, unless the context otherwise requires.
This MD&A should be read in conjunction with the unaudited interim consolidated financial statements for the three months ended March 31, 2006 included in this Press Release, and the audited consolidated financial statements and MD&A for the year ended December 31, 2005 included in our 2005 Annual Report to Shareholders. The unaudited interim consolidated financial statements for the three months ended March 31, 2006 and the audited consolidated financial statements for the year ended December 31, 2005 are both prepared in accordance with Canadian generally accepted accounting principles.
This MD&A has been prepared as at May 1, 2006.
OVERVIEW
-------------------------------------------------------------------------
We are a leading global supplier of technologically advanced automotive systems, assemblies, modules and components. We follow a corporate policy of functional and operational decentralization. We conduct our operations through
divisions, each of which is an autonomous business unit operating within
pre-determined guidelines. As at March 31, 2006, we had 224 manufacturing divisions and 60 product development and engineering centres in 22 countries. We design, develop and manufacture automotive systems, assemblies, modules and components, and engineer and assemble complete vehicles for sale to original equipment manufacturers ("OEMs") of cars and light trucks in North America, Europe, Asia and South America. Our product capabilities span a number of major automotive areas including: interiors; seating; closures; metal body systems; exterior and interior mirrors and engineered glass; electronics; plastic body, lighting and exterior trim systems; various powertrain and drivetrain systems; retractable hard top and soft top roof systems; and complete vehicle engineering and assembly.
During 2005, we completed the privatizations of our former public
subsidiaries: Tesma International Inc. ("Tesma"); Decoma International Inc. ("Decoma"); and Intier Automotive Inc. ("Intier") (the "Privatizations"). The Privatizations have allowed us to improve our strategic positioning, particularly with respect to the development of vehicle modules that cross our traditional product lines, and to better exploit our various competencies, particularly our complete vehicle expertise.
Our success is primarily dependent upon the levels of North American and European car and light truck production by our customers. OEM production volumes in different regions may be impacted by factors which may vary from one region to the next, including general economic conditions, interest rates, fuel prices and availability, infrastructure, legislative changes, environmental emission and safety issues, and labour and/or trade relations.
Given these differences between the regions in which we operate, our operations are segmented on a geographic basis between North America, Europe, and Rest of World (primarily Asia and South America). A co-Chief Executive Officer heads management in each of our two primary markets, North America and Europe. The role of the North American and European management teams is to manage our interests to ensure a coordinated effort across our different product capabilities. In addition to maintaining key customer, supplier and government contacts in their respective markets, our regional management teams centrally manage key aspects of our operations while permitting our divisions enough flexibility through our decentralized structure to foster an entrepreneurial environment.
HIGHLIGHTS
-------------------------------------------------------------------------
During the first quarter of 2006, we reported strong financial results, including record sales of $6.0 billion. The higher sales level was achieved as a result of increases in our North American and European dollar content per vehicle, an increase in North American production volumes and higher tooling, engineering and other sales. In North America, vehicle production increased 4% to 4.1 million units, while our content per vehicle increased 6% to $759, both as compared to the first quarter of 2005. In Europe, Western European vehicle production declined 3% to 4.0 million units, while our content per vehicle increased 8% to $343, both as compared to the first quarter of 2005.
Operating income for the first quarter of 2006 increased 22% to $309 million from $254 million for the first quarter of 2005. Excluding the unusual items recorded in the first quarters of 2006 and 2005 (see "Unusual Items" below), operating income for the first quarter of 2006 increased $45 million or 16%. The increase in operating income was primarily due to additional margins earned on the launch of new programs during or subsequent to the first quarter of 2005, productivity and efficiency improvements at certain underperforming facilities, and the closure of certain facilities that were incurring losses during the first quarter of 2005. The factors contributing to the increase in operating income were partially offset by lower production volumes on several of our high content programs, incremental customer price concessions, and non-cash costs related to the Privatizations.
Net income for the first quarter of 2006 increased 23% or $40 million to $212 million from $172 million for the first quarter of 2005. Excluding the unusual items recorded in the first quarters of 2006 and 2005 (see "Unusual Items" below), net income for the first quarter of 2006 increased 17% or $32 million. The increase in net income was primarily as a result of the increase in operating income (excluding unusual items) and the reduction in minority interest partially offset by higher income taxes.
Diluted earnings per share for the first quarter of 2006 increased 14% or $0.23 to $1.91 from $1.68 for the first quarter of 2005. Excluding the unusual items recorded in the first quarters of 2006 and 2005 (see "Unusual Items" below), diluted earnings per share increased 8% or $0.14 as a result of the increase in net income (excluding unusual items) partially offset by an increase in the weighted average number of diluted shares outstanding during the first quarter of 2006, primarily as a result of the Class A Subordinate Voting Shares issued on completion of the Privatizations.
|
EGS Electrical Canada Grand Opening
Elmira - On Friday, May 5, 2006, the management and staff of EGS Electrical Group Canada Limited will welcome customers, suppliers and local dignitaries to a Grand Opening celebration at their new Elmira, Ontario facility. Constructed to EGS specifications, the new building at 99 Union Street features state-of-the-art offices, distribution centre and product assembly operations.
Opened in the fall of 2005, the new facility has been enthusiastically received both by staff and visitors. The move to a bright, modern, high-bay plant has resulted in significant improvements in efficiency and productivity and new, up-to-date material handling and communications systems have significantly enhanced the company’s ability to serve their Canadian and international markets.
“Since our move to Elmira, we have exceeded all past records for assembly and shipping of our products,” says Mike Carroll, Director, Sales & Marketing. “As a major supplier of electrical products for both hazardous and non-hazardous applications, we have enjoyed steadily increasing demand for our products as the Canadian petroleum industry, and the construction industry in general, continue to expand. The new plant has allowed us to improve our service and increase our production levels.”
EGS Electrical Group Canada has a complex history and can ultimately date its origins back to the founding of the Appleton Electric Company in Chicago in 1903. The Canadian operation began in 1921 as Kondu Manufacturing Company and was acquired by Appleton Electric in the early 1970’s. In 1997 Appleton joined with a number of other companies to form EGS Electrical Group Canada.
From conduit fittings, junction boxes and panelboards, to lighting, controls, power conditioners and more, customers know EGS through the more than 50,000 products sold under the Appleton, O-Z/Gedney, Sola/Hevi-Duty, ATX, EasyHeat, McGill, Neer, NTP, Nelson and Curlee brands.
Grand Opening celebrations will include plant tours, a ribbon-cutting ceremony, entertainment and refreshments for invited guests. |
Alcan reports record first-quarter earnings as profit more than doubles
FINANCIAL HIGHLIGHTS
- Income from continuing operations of $1.21 per common share compared to
$0.56 a year earlier and a loss of $0.91 in the fourth quarter;
- Operating earnings for the first quarter of $1.26 per common share
compared to $0.60 a year earlier and $0.54 in the fourth quarter;
- Cash from operating activities in continuing operations of $367 million
in the first quarter compared to negative $62 million a year earlier
and $792 million in the fourth quarter;
- Debt to invested capital of 38% at the end of the first quarter
compared to 40% at the end of the fourth quarter;
- Revenues were $5,550 million for the first quarter compared to
$5,178 million a year earlier and $5,049 million in the fourth quarter.
MONTREAL - Alcan Inc. May 2 reported operating earnings from continuing operations of $1.26 per common share in the first quarter compared to $0.60 a year ago and $0.54 in the fourth quarter of 2005.(*)
"High prices for aluminum and excellent operating performances across
most of our businesses combined to make this an outstanding quarter for Alcan"
said Dick Evans, President and CEO. "By any measure, earnings for the period
were the highest in the company's history," he noted.
"The underlying fundamentals of the aluminum industry are currently
robust and should remain solid over the balance of the year. With continued
focus on operating excellence and financial discipline, I am confident that
Alcan is well positioned to reap the benefits," he added.
"Moreover, cost-pressures are stabilizing and our selling, administrative
and general expenses are beginning to show the benefits of a focused campaign
to improve efficiency. We are making progress toward our financial objectives
and I look forward to continued improvement," he concluded.
|
Industrial product and raw materials price indexes March 2006
Prices for manufactured goods at the factory gate were up in March, as higher prices were registered for gasoline and fuel oils. Raw materials prices also increased in March, the result of higher prices for non-ferrous metals.
Prices charged by manufacturers, as measured by the Industrial Product Price Index (IPPI), were up 0.8% from February to March. Higher prices for petroleum products, primary metal products and motor vehicles and other transport equipment were the major contributors to this monthly increase.
The 12-month change in the IPPI was 1.1%, up from February's year-over-year increase of 0.7%. Higher prices for petroleum products, primary metal products and chemical products were the major contributors to this annual increase.
The Raw Materials Price Index (RMPI) was up 0.8% from February to March, following a decrease of 3.2% in February and due primarily to higher prices for non-ferrous metals.
Compared to March of last year, raw materials cost factories 4.9% more, the lowest year-over-year change since March 2004.
In March, the IPPI (1997=100) stood at 112.3 up from February's revised level of 111.4. The RMPI (1997=100) reached 151.6, up from a revised level of 150.4 in February.
IPPI: Prices for petroleum products are up
On a month-over-month basis, manufacturers' prices were up 0.8%, mainly due to higher prices for gasoline and fuel oils, primary metal products and motor vehicles.
Petroleum and coal products prices increased 5.4% compared to February. If petroleum and coal product prices had been excluded, the IPPI would have increased 0.5% rather than 0.8%.
Prices for primary metal products rose 1.5% as prices for copper, zinc, aluminum and silver products increased due to continuing high demand.
Prices for motor vehicles and other transport equipment were up 0.4% from February, due primarily to a weaker Canadian dollar.
Prices for pulp and paper products, machinery and equipment as well as meat, fish and dairy products also recorded increases in March.
However, lumber and other wood products decreased 0.3% from February to March. Lower prices were observed for softwood lumber, particleboard as well as softwood plywood excluding Douglas fir.
IPPI: Petroleum and primary metal products are the major factors in the 12-month change
On a 12-month basis, the IPPI increased 1.1% in March, up from the year-over-year change of 0.7% observed in February.
Prices for petroleum and coal products rose 11.7% from March 2005, down from February's increase of 14.5%. If petroleum and coal product prices had been excluded, the IPPI would have increased 0.2%, rather than 1.1% from a year ago.
Prices for primary metal products were up 4.6% compared to a year ago. Higher prices were observed for copper, aluminum and zinc products. Chemical products increased 4.0%, due to higher prices for synthetic resins and inorganic industrial chemicals.
Prices were also higher than one year ago for rubber, leather and plastic fabricated products, tobacco products, fruit, vegetable and feed products, non-metallic mineral products and furniture and fixtures.
On the other hand, lumber and other wood products declined 8.4% from March 2005 to March 2006, as year-over-year price decreases were recorded for softwood lumber (-10.9%), particleboard (-22.4%) and softwood plywood excluding Douglas fir (-18.3%).
Motor vehicles and other transport equipment prices were down 3.4% from a year ago, mainly as a result of a stronger Canadian dollar.
Prices for pulp and paper products, meat, fish and dairy products as well as metal fabricated products were also down from a year ago.
RMPI: Non-ferrous metals push up raw materials prices
On a monthly basis, raw material prices rose 0.8% in March, following a decrease of 3.2% in February. Non-ferrous metals were the major contributors to this monthly increase as prices rose 4.0%. Prices for zinc concentrates, radio-active concentrates, copper concentrates, silver and gold were up due to strong demand and tight supply.
Mineral fuels increased 0.2% compared to February. Higher prices for crude oil (+0.6%) were partly offset by lower prices for natural gas (-1.9%).
Prices for animal and animal products rose 0.8% as increases were registered for unprocessed whole milk and hogs for slaughter.
On a 12-month basis, the price of raw materials rose 4.9% in March, a significant decrease from the 10.7% year-over-year increase observed in February. This was the lowest 12-month change since March 2004.
Mineral fuels were up 3.8% with natural gas prices rising 25.3%. Crude oil prices were up only 0.3% from a year ago, its lowest increase in two years. If mineral fuels had been excluded, the RMPI would have increased 6.2% instead of rising 4.9%.
Prices for non-ferrous metals rose 31.4%, mainly because of higher prices for radio-active concentrates, zinc concentrates, copper concentrates, gold, silver and lead. Prices for non-metallic minerals were also up 6.9% from a year ago.
On the other hand, prices for wood products, animal and animal products as well as ferrous materials were down compared to March 2005.
Impact of the exchange rate
Between February and March, the value of the Canadian dollar against the US dollar was down 0.7%. As a result, the total IPPI excluding the effect of the exchange would have risen 0.6% instead of its actual increase of 0.8%.
On a 12-month basis, the value of the Canadian dollar rose 5.1% against the US dollar. If the impact of the exchange rate had been excluded, producer prices would have risen 2.4% between March 2005 and March 2006, rather than their actual increase of 1.1%.
Higher prices for intermediate goods
Prices for intermediate goods increased 0.8% from February. Higher prices for petroleum products, primary metal products, pulp and paper products, motor vehicles, meat, fish and dairy products as well as fruit, vegetable and feed products were the major contributors to the increase.
Producers of intermediate goods received 1.8% more for their goods in March than the same month a year earlier. Higher prices were registered for petroleum products, primary metal products, chemical products, rubber, leather and plastic fabricated products and non-metallic mineral products.
These increases were partly offset by lower prices for lumber products, motor vehicles, meat, fish and dairy products, pulp and paper products, and metal fabricated products.
Finished goods prices increase
On a monthly basis, prices for finished goods were up 0.9% from February. Higher prices for petroleum products, motor vehicles, machinery and equipment and meat, fish and dairy products were the major contributors to this monthly rise.
Compared with March 2005, prices for finished goods edged up 0.1%. Higher prices for petroleum products, tobacco products, fruit, vegetable and feed products, furniture and fixtures, chemical products, and rubber, leather and plastic fabricated products were offset by lower prices for motor vehicles and lumber products.
Note to readers
The Industrial Product Price Index (IPPI) reflects the prices that producers in Canada receive as the goods leave the plant gate. It does not reflect what the consumer pays. Unlike the Consumer Price Index, the IPPI excludes indirect taxes and all the costs that occur between the time a good leaves the plant and the time the final user takes possession of it, including the transportation, wholesale, and retail costs.
Canadian producers export many goods. They often quote their prices in foreign currencies, particularly for motor vehicles, pulp, paper, and wood products. Therefore, a rise or fall in the value of the Canadian dollar against its U.S. counterpart affects the IPPI.
The Raw Materials Price Index (RMPI) reflects the prices paid by Canadian manufacturers for key raw materials. Many of these prices are set in a world market. Unlike the IPPI, the RMPI includes goods not produced in Canada.
|
Business Conditions Survey: Manufacturing industries for April 2006
Manufacturers are expecting tougher times ahead according to the April Business Conditions Survey, due in part to dissatisfaction with the current level of orders, the effects of the higher Canadian dollar and substantial increases in the price of crude oil and other raw material inputs. As a result, manufacturers are anticipating lower production and employment levels in the coming three months.
The Business Conditions Survey is a quarterly survey requesting opinions on production impediments, finished product inventory levels, new and unfilled order levels, production and employment prospects in the coming three months. The voluntary survey was conducted in the first two weeks of April and attracted almost 4,000 responses from manufacturers.
Manufacturers less optimistic about production prospects
While 14% of manufacturers stated they would increase production in the second quarter of 2006 another 27% expected to decrease production, leaving the balance of opinion at -13. This was a 12 point decrease from the -1 balance posted in the January survey. This represents the most negative balance of opinion since January 2001 when the balance stood at -23. The most positive recent balance of opinion was +11 posted in the October 2004 survey.
Manufacturers in the transportation equipment, primary metal, chemical, plastics and rubber products industries were the major contributors to the lower production prospects in the second quarter of 2006. A lack of capacity continued to be an issue for some manufacturers. According to the Industrial Capacity Utilization Rates, manufacturers operated at 84.7% of capacity in the fourth quarter of 2005.
The balance of opinion is determined by subtracting the proportion of manufacturers who expected production would be decreasing in the coming three months from the proportion who expected production would be increasing.
Satisfaction with level of orders received down
In April, the balance of opinion concerning current levels of new orders dropped 5 points from the January survey to -5. This remained lower than the most recent high of +13 posted in the October 2004 survey. The number of manufacturers who stated that orders received were declining increased 5 points to 20% in April. Producers in the transportation equipment industry were the major contributors to the lower balance of opinion for orders received. According to February's Monthly Survey of Manufacturing, new orders for all manufacturing industries were down 2.1% to just over $51.1 billion.
Manufacturers express more concerns with levels of unfilled orders
With 22% of manufacturers expressing a lower-than-normal backlog and 12% stating a higher-than-normal backlog, the balance of opinion concerning the current level of unfilled orders stood at -10. Although this was down 4 points from what was reported in the January survey, it remains higher than the -23 registered in the April 2005 survey. Producers in the computer and electronic products industries, in addition to the chemical, plastics and rubber products industries, were the major contributors to the decreasing unfilled orders balance of opinion. According to February's Monthly Survey of Manufacturing, unfilled orders picked up 1.0% to just over $43.4 billion, the fifth increase in a row.
Manufacturers remain less concerned with finished product inventories
In April, 83% of manufacturers reported that the current level of finished product inventories was about right, up 6 points from the January level. Some 15% stated that inventories were too high, while only 1% said inventories were too low. This left the balance of opinion at -14, a 3 point improvement over the January balance. According to February's Monthly Survey of Manufacturing, finished product inventories edged up 0.2% to almost $22.3 billion.
Except for the data on production difficulties, data in this release are seasonally adjusted.
Manufacturers' employment outlook down slightly
The balance of opinion for employment prospects for the next three months decreased 1 point to -2 in April. While 84% of manufacturers stated that they would keep or add to their work force, 15% indicated that they expected to decrease employment in the second quarter of 2006. Regionally, manufacturers expected slightly lower employment levels in Ontario (balance -7) and Quebec (balance -7), which more than offset by gains in Manitoba (+21), Saskatchewan (+8), Alberta (+10) and British Columbia (+9) — where manufacturers still expressed difficulty in finding skilled labour. According to the March Labour Force Survey, employment in the manufacturing sector stood at 2.13 million, down 0.6% from the February level. Since the end of 2002, employment in manufacturing has fallen by 8.2%, with 189,000 fewer people working in this industry.
Manufacturers report more production impediments
The number of manufacturers reporting production impediments increased 2 points to 21% in the April survey. The appreciation of the Canadian dollar, higher raw material costs and labour shortages in the western provinces were among the factors cited.
| Business Conditions Survey: Manufacturing industries |
| |
April 2005 |
July 2005 |
October 2005 |
January 2006 |
April 2006 |
| |
seasonally adjusted |
| Volume of production during next three months compared with last three months will be: |
|
|
|
|
|
| About the same (%) |
64 |
60 |
69 |
69 |
58 |
| Higher (%) |
18 |
19 |
16 |
15 |
14 |
| Lower (%) |
18 |
21 |
15 |
16 |
27 |
| Balance of opinion |
0 |
-2 |
1 |
-1 |
-13 |
| Orders received are: |
|
|
|
|
|
| About the same (%) |
60 |
65 |
76 |
70 |
64 |
| Rising (%) |
17 |
13 |
14 |
15 |
15 |
| Declining (%) |
23 |
22 |
10 |
15 |
20 |
| Balance of opinion |
-6 |
-9 |
4 |
0 |
-5 |
| Present backlog of unfilled orders is: |
|
|
|
|
|
| About normal (%) |
52 |
58 |
61 |
65 |
66 |
| Higher than normal (%) |
12 |
18 |
19 |
14 |
12 |
| Lower than normal (%) |
35 |
23 |
20 |
20 |
22 |
| Balance of opinion |
-23 |
-5 |
-1 |
-6 |
-10 |
| Finished product inventory on hand is: |
|
|
|
|
|
| About right (%) |
66 |
72 |
68 |
75 |
83 |
| Too low (%) |
5 |
2 |
7 |
4 |
1 |
| Too high1(%) |
29 |
26 |
25 |
21 |
15 |
| Balance of opinion |
-24 |
-24 |
-18 |
-17 |
-14 |
| Employment during the next three months will: |
|
|
|
|
|
| Change little (%) |
65 |
71 |
72 |
73 |
71 |
| Increase (%) |
19 |
14 |
13 |
13 |
13 |
| Decrease (%) |
16 |
14 |
15 |
14 |
15 |
| Balance of opinion |
3 |
0 |
-2 |
-1 |
-2 |
| |
unadjusted (%) |
| Sources of production difficulties: |
|
|
|
|
|
| Working capital shortage |
3 |
2 |
3 |
3 |
3 |
| Skilled labour shortage |
7 |
8 |
9 |
6 |
8 |
| Unskilled labour shortage |
2 |
3 |
4 |
4 |
4 |
| Raw material shortage |
5 |
4 |
5 |
4 |
4 |
| Other difficulties |
12 |
3 |
5 |
3 |
3 |
| No difficulties |
71 |
79 |
74 |
81 |
79 |
| 1. | No evident seasonality. |
|
| Business Conditions Survey: Manufacturing industries: Production prospects balance of opinion for select industries |
| |
April 2005 |
July 2005 |
October 2005 |
January 2006 |
April 2006 |
| Major group industries |
seasonally adjusted |
| Non-durable goods |
1 |
2 |
2 |
-5 |
-5 |
| Food |
2 |
7 |
-3 |
0 |
5 |
| Chemical |
-1 |
2 |
8 |
19 |
-1 |
| Petroleum and coal products |
-7 |
-10 |
35 |
-63 |
12 |
| Paper |
6 |
-5 |
-6 |
-1 |
-2 |
| Plastic and rubber products |
4 |
8 |
8 |
13 |
0 |
| Durable goods |
-3 |
-8 |
5 |
13 |
-28 |
| Transportation equipment |
-8 |
-8 |
0 |
-2 |
-35 |
| Primary metal |
9 |
-9 |
10 |
25 |
2 |
| Wood products |
-8 |
3 |
-9 |
3 |
-3 |
| Fabricated metal products |
5 |
20 |
27 |
3 |
12 |
| Machinery |
12 |
15 |
10 |
8 |
5 |
| Computer and electronic products |
23 |
-1 |
8 |
-28 |
14 |
Note to readers
The Business Conditions Survey is conducted in January, April, July and October, and the majority of responses are recorded in the first two weeks of these months. Results are based on replies from about 4,000 manufacturers and are weighted by a manufacturer's shipments or employment. Consequently, larger manufacturers have a correspondingly larger impact on the results than smaller manufacturers.
|
COM DEV receives Authorization to Proceed on Project for European Satellite Manufacturer
Company Increases 2006 Revenue Guidance
CAMBRIDGE, ON - On April 25 COM DEV International Ltd. announced that it has received an Authorization to Proceed (ATP) to supply multiplexer and switch equipment to a major European satellite manufacturer for use in a commercial communications satellite. COM DEV expects the ATP to lead to a contract with a potential value of CDN $8 million, with the equipment to be delivered over the next 12 months.
As a result of its recent success in winning mandates on this and other
projects, COM DEV is raising its projection for fiscal 2006 revenue growth to
15%, compared to previous guidance of 10% growth. Revenue for the full year
ended October 31, 2005 was $123.6 million.
"We continue to see positive fundamentals in each of our market segments -
commercial, civil and military," said John Keating, CEO of COM DEV.
"Commercial communications satellite orders in particular have been very
robust in 2006, and our team has done an outstanding job capturing a strong
share of this activity. Based on a high level of visibility, we are now
confident in our ability to deliver revenue growth for this year in excess of
our previous estimates."
|
Magna International Inc. - Annual Meeting of Shareholders and first quarter 2006 results
AURORA, ON - Magna International Inc. is holding its Annual Meeting of Shareholders on Tuesday, May 2, 2006 at Roy Thomson Hall, 60 Simcoe Street, Toronto, Ontario commencing at 10:00 a.m. EDT (Toronto time).
The meeting will be webcast live and can be accessed at www.magna.com. |
Brick Brewing reports record annual performance
Beer volumes up 39%, Net income increases to record $4.8 million for the year ended January 31, 2006
WATERLOO, On April 25 Brick Brewing Co. Limited released its record annual results for the year ended January 31, 2006. "We are very pleased with the progress of our business and the resulting record annual financial performance for the Company," said Jim Brickman, Executive Chairman and Founder. "The continued shift in the industry towards value continues to provide Brick with the opportunity for further sustained growth and profitability," Brickman added.
Doug Berchtold, President and CEO said: "While the fourth quarter was a
challenge financially due to the myriad of operational improvements
underway we expect that the changes being made to reshape our operations
will reduce structural operating costs and allow us to better execute in
both the manufacturing and distribution of our products. We will continue
to sustain our aggressive focus on reducing structural operating costs
while improving the availability of our products."
Fourth Quarter Financial Highlights
Quarterly Comparison
- Net revenue for the fourth quarter ended January 31, 2006 increased
to $6.4 million compared to $4.9 million for the same period last
year, an increase of 31%. Beer volumes increased by 12% over the
fourth quarter last year.
- Net income for the quarter was a record $1.7 million, after a
$2.1 million income tax recovery, compared to $220 thousand in the
fourth quarter last year.
- Earnings before interest, taxes, depreciation and amortization
(EBITDA) in the fourth quarter was $217 thousand before adjusting
$369 thousand for one-time write-down of bottle inventory compared to
a loss of $21 thousand before adjusting $379 thousand for a one-time
production tax decrease for the same quarter last year.
- Cost of goods on a per unit basis for beer increased 2% in the fourth
quarter compared to last year. These cost increases in the quarter
are attributable to increased costs associated with the new Kitchener
facility and an increased investment in customer service activities
in order to better execute delivery of products directly to The Beer
Store and LCBO stores.
Annual Financial Highlights
- Net revenue for the year ended January 31, 2006 increased by 33% to
$30.2 million compared to $20.8 million for the same period last year
before a one-time reduction last year of $929 thousand in production
taxes. Beer volumes increased by 39% over last year.
- Net income for the year was a record $2.7 million before a
$2.2 million recovery for income taxes, compared to $1.9 million last
year.
- Earnings before interest, taxes, depreciation and amortization
(EBITDA) increased by 15% to $3.9 million in the year, compared to
$3.4 million last year.
- Cost of goods on a per unit basis for beer decreased 13% in the year
compared to last year.
Fourth Quarter Operational Highlights
- In the fourth quarter of this year due to increased industry pricing
net revenues increased by $934 thousand over the fourth quarter last
year. Effective October 2005 the Government of Ontario increased the
social reference price for beer to $26.40 per case of 24 bottles
including deposit. This is the minimum price at which brewers can
sell beer to consumers.
- In the fourth quarter the Company's per unit cost of goods sold
increased by 2% over the same period last year. During the quarter
the Company consolidated and increased its customer service
activities in an effort to better execute delivery of its products
directly to The Beer Store and LCBO stores as opposed to central
warehouses. The Company successfully reduced transfer fees paid to
LCBO and The Beer Store by 15% or $386 thousand over the fourth
quarter last year.
- During the fourth quarter the Company continued the installation of
its new Kitchener packaging line, which is now in the final stages of
its commissioning.
- In the fourth quarter the Company's EBITDA performance was adversely
affected by transitional costs pertaining to the new Kitchener
packaging facility, a one-time write-down of bottle inventories and
increased investment spending in marketing, selling and customer
service activities.
|
Brick Brewing celebrates opening of new distribution, warehouse and packaging centre Ribbon Cutting Takes Wraps Off Brick's Latest Expansion
WATERLOO - Brick Brewing Co. Limited announced on April 20 the grand opening of its new distribution, warehouse and packaging centre in Kitchener, Ontario.
As one of the fastest growing breweries in Canada, Brick required a
centralized warehouse and delivery system and increased packaging capabilities
to remain cost-efficient, yet keep up with the growing demand for its beers,
especially with the busy summer season just around the corner. The new 100,000
square foot distribution, warehouse and packaging centre is a multi-million
dollar project that took 12 months to complete. The investment allows Brick to
substantially increase its annual packaging capacity for beer, capacity Brick
plans to fully utilize in the coming years.
"This investment allows us to increase our production at substantially
lower overall operating costs so we can continue to successfully compete and
grow our niche in the highly competitive Ontario beer market," said Doug
Berchtold, President and CEO. "Over the past two years, our brands have
enjoyed a significant rise in market share, and the additional packaging
capacity from this facility will help ensure we meet the expected demand for
all our beers this summer." Brick operated at full capacity last summer and
expects to nearly double its packaging capacity this summer as a result of the
commissioning of the new distribution and packaging centre.
The new facility supplements Brick's recent investment in capacity at its
two additional brewing locations, Waterloo and Formosa. "Brick is the first
craft brewery in Ontario and has been a part of the Kitchener-Waterloo
community for over 20 years," said Brick Founder and Chairman Jim Brickman.
"We are pleased to have the opportunity to expand in our home market," he
added.
Local and provincial dignitaries and politicians joined in the ribbon-
cutting ceremony celebrating Brick's ability to create up to 40 new jobs in
the community. "Brick is a respected, successful business in our community,"
said Kitchener Mayor Carl Zehr. "I have been impressed with Brick Brewery for
years, and to have them invest in our community is good for tourism, employees
and the overall economic health of our community."
|
Study: Productivity spillovers from foreign-controlled suppliers in manufacturing - 1981 to 1997
The presence of foreign-controlled suppliers, especially those operating in science industries, can lead to faster productivity growth for Canadian producers located in downstream sectors, according to a new study.
The study takes a detailed look at the economic relationship between American and Canadian controlled manufacturing plants operating at different stages of the supply chain.
It found that the presence of foreign-controlled plants operating in "upstream" industries (those that supply products and services) improves the productivity performance of Canadian producers in "downstream" sectors, that is, sectors that rely heavily on inputs from these supplier industries.
The study found that the benefits are particularly important for domestic producers that buy inputs from science-based industries, such as producers of machinery and equipment, electronics and chemicals.
A one percentage point gain in the foreign share of output in upstream science industries increases the productivity growth of downstream Canadian producers by 1.8 percentage points.
Foreign-controlled plants are a major force in Canada's manufacturing sector. Foreign-controlled producers account for over 50% of Canadian manufacturing output. The majority of this output is produced by affiliates of American multinationals.
Much of the foreign activity is concentrated in certain industries, such as transportation equipment, petroleum, chemicals and food industries. Still, foreign-owned producers have a significant presence in almost all manufacturing industries.
Indeed, all of the 22 manufacturing industries studied had at least 10% of their output produced by foreign-controlled firms, and 8 industries had 50% of their output produced by foreign-controlled firms.
Note: Plant data came from Statistics Canada's Annual Survey of Manufactures. The analysis was conducted for a balanced panel of 8,088 Canadian owned plants that stayed in the market between 1981 and 1997. A plant was deemed foreign-owned if more than 50% of its corporation's voting rights were known to be held outside of Canada, or were held by one or more Canadian corporations that were foreign-controlled.
|
Monthly Survey of Manufacturing for February 2006
In February, lower prices for several resource-based industries contributed to a sizeable drop in manufacturing shipments and a spike in the inventory-to-shipment ratio.
Shipments tumbled 2.2% to $50.7 billion in February, the third decline in the last four months. Although wide ranging, the decrease was largely attributable to lower industrial prices for petroleum, wood and chemical products.
Consequently, the sharp drop in shipments boosted the inventory-to-shipment ratio to 1.31 from 1.27 in January. In recent months, the volatility of shipments has caused the ratio to vary more than usual. February's ratio is equal to that of the recent high set in July 2005.
The inventory-to-shipment ratio is a key measure of the time, in months, that would be required to exhaust inventories if shipments were to remain at their current level.
Manufacturing activity pulls back in most industries
Accounting for 64% of total shipments, 16 of the 21 industries posted decreases in February. A portion of the drop was concentrated in industries where prices have fallen in recent months. Excluding the petroleum and coal products, wood products and chemical products industries, shipments declined only 0.8%.
At 1997 prices, manufacturers maintained shipment volumes at January's level of $47.6 billion, thus production remained stable.
Warmer-than-normal winter temperatures helps some manufacturers, hinders others
North America's warmer-than-usual winter in 2006 has contributed to a marked decline in demand for petroleum and related products in recent months. As a result, global supplies of petroleum products have improved and by mid-February, the price of crude oil closed below US $58 per barrel for the first time in two months.
Widespread decreases in production at Canada's refineries contributed to a 10.2% plunge in shipments of petroleum and coal products in February. Shipments fell back to $4.4 billion, due in part to a 5.0% drop in petroleum prices.
Shipments of wood products fell 7.3% to $2.8 billion, giving back most of the gains posted in January (+3.5%) and December (+4.6%), a period of rising prices for lumber products.
Following a lacklustre 2005, the price of lumber products began to pick up in the latter months of the year as demand widely improved. Again, the warmer-than-normal winter has contributed to an active construction industry so far this winter. In addition, the rebuilding efforts in the wake of the destruction from last fall's hurricane season in the southern United States have also generated a need for Canadian lumber in recent months.
In February, demand for softwood lumber and particleboard began to weaken, contributing to lower lumber prices and the decline in shipments.
Other industries reporting lower shipments in February included food manufacturing (-3.2%) and primary metals (-2.2%).
Higher shipments of automobiles partly offset a weak month
Shipments of motor vehicles bounced back 3.4% to $5.6 billion in February, the first increase in four months. The increase reflected more of a return to normal activity following some temporary slowdowns of assembly lines in January.
Despite the increase, shipments of motor vehicles remained well off levels of last year. For the first two months of 2006, shipments were 9.7% below the level for the same period one year ago.
Most provinces post lower shipments in February
Only Newfoundland and Labrador, the Northwest Territories and Nunavut registered higher shipments in February. Lower shipments by nondurable goods industries largely contributed to the weak month for most provinces.
Quebec's manufacturers reported a $338 million drop in shipments (-2.7%) to $12.0 billion. Declines in shipments of petroleum, food and wood products pulled down manufacturing activity in Quebec for the third time in the last four months.
The petroleum and primary metals industries contributed to Ontario's $200 million (-0.8%) decrease in manufacturing activity to $25.4 billion, while British Columbia's manufacturing sector posted a $129 million (-3.4%) drop in shipments to $3.7 billion. The wood products industry was largely responsible for the first decrease in British Columbia in five months.
| Manufacturing shipments, provinces and territories |
| |
January 2006r |
February 2006p |
January to February 2006 |
| |
seasonally adjusted |
| |
$ millions |
% change |
| Canada |
51,832 |
50,694 |
-2.2 |
| Newfoundland and Labrador |
206 |
210 |
1.8 |
| Prince Edward Island |
121 |
112 |
-7.9 |
| Nova Scotia |
805 |
762 |
-5.3 |
| New Brunswick |
1,270 |
1,163 |
-8.4 |
| Quebec |
12,349 |
12,012 |
-2.7 |
| Ontario |
25,607 |
25,406 |
-0.8 |
| Manitoba |
1,163 |
1,079 |
-7.3 |
| Saskatchewan |
1,017 |
894 |
-12.1 |
| Alberta |
5,452 |
5,344 |
-2.0 |
| British Columbia |
3,834 |
3,706 |
-3.4 |
| Yukon |
2 |
2 |
-14.9 |
| Northwest Territories including Nunavut |
5 |
5 |
9.0 |
|
Manufacturers boost inventories of raw materials
Manufacturers' inventories continued their steady climb, rising 0.3% to $66.3 billion in February. The trend for inventories has been positive for over two years.
All three stages of fabrication increased in February. In anticipation of future shipments, manufacturers boosted their raw material inventories by 0.4% to $28.7 billion, the fourth increase in five months.
Goods-in-process (+0.3%) and finished product (+0.2%) inventories also closed the month on a slightly higher note.
More orders on manufacturers' books
Manufacturers' books continued to fill with contracts as the backlog of unfilled orders rose another 1.0% to $43.5 billion in February, the fifth increase in a row. Unfilled orders, which have been on an upward trend for just over one year, have risen 12.5% in value compared to February 2005.
The span of February's increase in orders was extensive, with sizeable gains reported by the fabricated metal products (+5.0%), railroad rolling stock (+3.5%) and the heavy duty truck (+8.5%) industries.
The heavy duty truck industry has posted a significant comeback over the last year. Pent-up demand, particularly from the United States, was reflected in the strong surge of orders for Canadian-made vehicles. Recently, some manufacturers have expanded their operations, and others intend to boost plant capacity in the near future.
In February, unfilled orders for heavy duty trucks stood at $1.4 billion, the highest level since September 2000 and more than double the level of unfilled orders posted just two years ago.
New orders take a hit in February
While manufacturers' unfilled orders continued to rise in February, new orders took a dive. New orders received fell by 2.1% to $51.1 billion, the lowest point since last July. Manufacturers' new orders have been trending down since the fall of 2005.
The aerospace (-16.5%) and primary metals (-2.3%) industries were largely responsible for February's drop in contracts received, although they were partly offset by higher orders for railroad rolling stock (+118.8%) and heavy duty trucks (+3.3%).
Job losses mount
Manufacturers continued to shed jobs in March (-12,000), according to the latest Labour Force Survey. Since the end of 2002, employment in manufacturing has fallen by 8.2% with 189,000 fewer people working on the factory floor.
| Shipments, inventories and orders in all manufacturing industries |
| |
Shipments |
Inventories |
Unfilled orders |
New orders |
Inventories-to-shipments ratio |
| |
seasonally adjusted |
| |
$ millions |
% change |
$ millions |
% change |
$ millions |
% change |
$ millions |
% change |
|
| February 2005 |
50,877 |
-1.1 |
64,048 |
0.0 |
38,637 |
-0.2 |
50,799 |
-5.0 |
1.26 |
| March 2005 |
49,879 |
-2.0 |
64,273 |
0.4 |
39,541 |
2.3 |
50,783 |
0.0 |
1.29 |
| April 2005 |
50,506 |
1.3 |
64,663 |
0.6 |
39,656 |
0.3 |
50,621 |
-0.3 |
1.28 |
| May 2005 |
50,488 |
0.0 |
64,914 |
0.4 |
40,256 |
1.5 |
51,088 |
0.9 |
1.29 |
| June 2005 |
51,004 |
1.0 |
65,061 |
0.2 |
40,609 |
0.9 |
51,357 |
0.5 |
1.28 |
| July 2005 |
50,391 |
-1.2 |
65,933 |
1.3 |
41,327 |
1.8 |
51,109 |
-0.5 |
1.31 |
| August 2005 |
51,755 |
2.7 |
65,982 |
0.1 |
42,095 |
1.9 |
52,523 |
2.8 |
1.27 |
| September 2005 |
51,359 |
-0.8 |
65,510 |
-0.7 |
41,947 |
-0.4 |
51,211 |
-2.5 |
1.28 |
| October 2005 |
52,058 |
1.4 |
65,658 |
0.2 |
42,464 |
1.2 |
52,575 |
2.7 |
1.26 |
| November 2005 |
51,176 |
-1.7 |
66,112 |
0.7 |
42,602 |
0.3 |
51,315 |
-2.4 |
1.29 |
| December 2005 |
52,051 |
1.7 |
65,977 |
-0.2 |
42,686 |
0.2 |
52,135 |
1.6 |
1.27 |
| January 2006 |
51,832 |
-0.4 |
66,042 |
0.1 |
43,045 |
0.8 |
52,191 |
0.1 |
1.27 |
| February 2006 |
50,694 |
-2.2 |
66,254 |
0.3 |
43,455 |
1.0 |
51,105 |
-2.1 |
1.31 |
| Manufacturing industries except motor vehicle, parts and accessories |
| |
Shipments |
Inventories |
Unfilled orders |
New orders |
| |
seasonally adjusted |
| |
$ millions |
% change |
$ millions |
% change |
$ millions |
% change |
$ millions |
% change |
| February 2005 |
42,085 |
-0.4 |
60,263 |
0.2 |
36,357 |
-0.7 |
41,828 |
-5.1 |
| March 2005 |
41,891 |
-0.5 |
60,435 |
0.3 |
37,249 |
2.5 |
42,783 |
2.3 |
| April 2005 |
42,228 |
0.8 |
60,748 |
0.5 |
37,406 |
0.4 |
42,385 |
-0.9 |
| May 2005 |
42,241 |
0.0 |
61,066 |
0.5 |
38,027 |
1.7 |
42,862 |
1.1 |
| June 2005 |
42,531 |
0.7 |
61,172 |
0.2 |
38,484 |
1.2 |
42,988 |
0.3 |
| July 2005 |
42,226 |
-0.7 |
61,844 |
1.1 |
39,092 |
1.6 |
42,834 |
-0.4 |
| August 2005 |
42,805 |
1.4 |
61,968 |
0.2 |
39,881 |
2.0 |
43,593 |
1.8 |
| September 2005 |
42,981 |
0.4 |
61,503 |
-0.7 |
39,755 |
-0.3 |
42,855 |
-1.7 |
| October 2005 |
43,201 |
0.5 |
61,843 |
0.6 |
40,315 |
1.4 |
43,761 |
2.1 |
| November 2005 |
42,863 |
-0.8 |
62,317 |
0.8 |
40,412 |
0.2 |
42,960 |
-1.8 |
| December 2005 |
43,569 |
1.6 |
62,212 |
-0.2 |
40,395 |
-0.0 |
43,553 |
1.4 |
| January 2006 |
43,802 |
0.5 |
62,288 |
0.1 |
40,673 |
0.7 |
44,079 |
1.2 |
| February 2006 |
42,479 |
-3.0 |
62,603 |
0.5 |
40,979 |
0.8 |
42,785 |
-2.9 |
Note to readers
Non-durable goods industries include food, beverage and tobacco products, textile mills, textile product mills, clothing, leather and allied products, paper, printing and related support activities, petroleum and coal products, chemicals, and plastics and rubber products.
Durable goods industries include wood products, non-metallic mineral products, primary metals, fabricated metal products, machinery, computer and electronic products, electrical equipment, appliances and components, transportation equipment, furniture and related products and miscellaneous manufacturing.
Unfilled orders are a stock of orders that will contribute to future shipments assuming that the orders are not cancelled.
New orders are those received whether shipped in the current month or not. They are measured as the sum of shipments for the current month plus the change in unfilled orders. Some people interpret new orders as orders that will lead to future demand. This is inappropriate since the "new orders" variable includes orders that have already been shipped. Readers should note that the month-to-month change in new orders may be volatile. This will happen particularly if the previous month's change in unfilled orders is closely related to the current month's change.
Not all orders will be translated into Canadian factory shipments because portions of large contracts can be subcontracted out to manufacturers in other countries. Also, some orders may be cancelled.
|
Brick Brewing supplements long term financing agreement Additional $ 2.0 million term loan to finance equipment for new packaging capacity
WATERLOO - Brick Brewing Co. Limited (TSX:BRB) today announced it has obtained supplemental term financing from Roynat Capital.
The agreement allows the Company to use the additional funds to finance
capital expenditures already incurred over the past year to complete the
previously announced packaging line installation at the Kitchener warehouse.
"This financing will provide the Company with supplemental funding for the
capital projects which are expected to increase our capacity and reduce the
variable costs in our packaging operations," commented Graydon Moore, Chief
Financial Officer. The supplemental financing is in the amount of $2.0 million
and on similar terms and conditions as the Company's existing term debt with
Roynat Capital. The Company anticipates drawing down these additional funds
over the next month, which will bring the Company's total outstanding term
indebtedness to Roynat Capital to approximately $5.5 million.
The Company requires the additional funding to increase plant capacity
and operating efficiency at the new Kitchener facility by investing in
additional filtration equipment, line speed enhancements and improved quality
inspection technology. "The packaging line, which is currently undergoing
start up testing, is expected to deliver both margin improvements and
capacity, greater than originally contemplated," Moore added.
Brick Brewing Co. Limited is a regional brewer of award winning premium quality beers. The Company, founded by Jim Brickman in 1984, was the first craft brewery to start up in Ontario, and is credited with pioneering the present day craft brewing renaissance in Canada. Brick has complemented its successful line of premium craft beers with other popular brands such as Laker, Red Cap and Formosa Springs Draft. Brick trades on the TSX under the symbol BRB. Visit us at www.brickbeer.com. |
Associated Packaging Enterprises Canada Inc. fined $80,000 for health and safety violation
CAMBRIDGE, - Associated Packaging Enterprises Canada Inc., a manufacturer of food packaging products which operates a plant in Cambridge, Ont., was fined $80,000 on Tuesday, March 28, 2006 for a violation of the Occupational Health and Safety Act that resulted in serious burns to the arm of a worker.
On September 18, 2004, a worker at Associated Packaging's plant on
Franklin Blvd. in Cambridge was cleaning rollers on a continuous rotary
thermal forming line, a machine with a large heated forming wheel used to
manufacture trays. The wheel is maintained at a temperature of between 350 to
400 degrees Fahrenheit (176.7 to 204.4 degrees Celsius). The worker was on a
platform at the top of the wheel that has a guardrail that opens into the
machine, and was cleaning rollers by hand with a sponge. While reaching to
retrieve a piece of plastic debris, the worker's arm became caught between a
roller and the wheel. The worker received third degree burns to the left arm,
resulting in permanent impairment to the arm.
A Ministry of Labour investigation determined that the worker was not
properly informed, instructed or supervised in the cleaning of the machine, as
required by the Occupational Health and Safety Act.
Associated Packaging Enterprises Canada Inc. pleaded guilty to failing,
as an employer, to provide information, instruction and supervision to a
worker to protect the health and safety of the worker. This was contrary to
Section 25(2)(a) of the act.
Justice of the Peace Jeanette P. De Jong of the Ontario Court of Justice
in Cambridge fined the company $80,000. In addition, the court imposed a
25-per-cent victim fine surcharge, as required by the Provincial Offences Act.
The surcharge is credited to a special provincial government fund to assist
victims of crime.
|
Book Review
The Truth about Global Outsourcing: 10 Lessons We've Learned about the Difficulties of "Getting It Done"
Outsourcing sounds great in theory, but often falls short in execution. Authors Ralph Welborn and Vince Kasten provide some pithy insights on what goes wrong . . . and why.
Hoboken, NJ (March 2006)--Once upon a time it sounded so simple. Just send part of your operations to someone else to deal with and sit back and enjoy your new, streamlined, ever-more-profitable organization. But those companies that have taken the outsourcing plunge have found that reality is more complicated than theory. A lot more complicated. If you're one of them, take comfort in knowing you aren't alone. If you're considering joining them, you can benefit from studying the challenges that have blindsided your intrepid colleagues.
Business advisors Ralph Welborn and Vince Kasten--authors of Get It Done! A Blueprint for Business Execution (Wiley, 2006, ISBN-13: 978-0-471-47931-4, ISBN-10: 0-471-47931-4, $29.95)--have gotten a firsthand look at the problems outsourcers face. If you haven't experienced them firsthand, you probably will soon since the reality is outsourcing is a huge issue (as well as opportunity) for companies everywhere.
Consider the statistics:
· Today, only 19 percent of US businesses have an outsourcing strategy. However, the percentage skyrockets to 95 percent if only Fortune 1000 companies are considered.
· Outsourcing grew 30 percent a year between 1995 and 2003. Worldwide business process outsourcing (BPO) services--which include finance and accounting activities like accounts payable and accounts receivable--are expected to grow from $110 billion in 2002 to $173 billion in 2007, an annual 9.5 percent growth rate.
· By 2008, the outsourcing market is expected to grow to over $500 billion, of which nearly $380 billion will be information technology outsourcing (ITO), with the balance being BPO. This is up from $335 billion in 2005.
· Approximately 36 percent of the overall outsourcing activities are occurring in the manufacturing (manufacturing, transportation, retail, and communications) industries.
"Outsourcing continues to experience double-digit growth," says Welborn. "Yet outsourcing providers are facing lower profits, shorter contracts, and unhappy customers. And few of the $100 million deals signed will generate the expected revenues. Why? Because, at its core, the outsourcing industry rests upon an old business model based on inflexibility and cost reduction that doesn't account either for the predictable patterns of technology adoption or for the demands customers face for providing more 'value' and 'service' rather than simply reducing costs for their customers. Times have changed; customers have changed; markets have changed. But the underlying logic of outsourcing contracts, and relationships, has yet to change."
Here's the gist of the problem: Once the work leaves your organizational walls, you lose visibility--and some say control--over what gets done how and by whom. In other words, you run, immediately, into what Welborn and Kasten call the "execution gap"--the difference between what needs to get done and what actually does get done.
The authors shine light on the execution gap by identifying 10 lessons they've learned about the challenges and difficulties of global outsourcing:
1. If it looks too good to be real . . . it probably is. At least 50 percent of outsourcing deals "fail" (don't return the results promised to customers) and 80 percent don't produce any savings at all, according to the Gartner Group, an industry analyst. Forrester Research, another industry analyst group, recently reported that more than 25 percent of North American customers are dissatisfied with their outsourcer's ability to hit cost and service level agreement (SLA) targets, while 69 percent of European customers reported failure to meet expectations for innovation. The key reason? Lack of contract flexibility and the one-size-fits-all approach. The world changes; customer needs change; technologies change. What doesn't? Too frequently, the answer to that is outsourcing contract terms. Outsourcers (understandably) try to lock customers into long-term deals based on contract terms and pricing that will be out of date six months after the contract is signed. The result? Frustration, irritation, and a sense of impotence regarding lack of understanding and insight into why the sales promises of outsourcing aren't meeting up with its delivery realities.
2. Too many outsourcing deals suffer "death by change order." Here's what happens: Outsourcing firms don't always do their homework up front in regard to understanding their clients' processes. Thus they underestimate the amount of work it will take to meet their promises. Often this is an honest mistake, but other times outsourcers may underquote on purpose, just to get the business. Then, when they get further into the contract, they say in essence: "Circumstances have changed and we're going to need more money." Naturally, customers aren't happy about it, but because they have so much invested in the outsourcer they have little choice but to pony up. When change orders occur several times over the course of the relationship, irreparable damage may occur. Companies lose profits, yes, but they also lose faith in their outsourcing firm . . . and what is supposed to be a fruitful partnership goes sour and possibly even comes to a bitter end.
3. The prevalent "core vs. context" approach--outsourcing what's not important to let us focus on what is important--is becoming outdated. The "core vs. context" argument states that companies should focus on what is "core" to them--things that directly impact shareholder value or that the customer cares about--and outsource everything else. Examples of "core" things would be R&D--or any type of new product or service innovation--and "context" things would be customer service (call centers) or accounts payable (A/P) and accounts receivable (A/R). This distinction may have worked in the past, but today? We don't think so. Underlying the "outsource context" chant has been that you had to know only that the service was being provided to you and your customers, but not necessarily how it was being done; after all, if customer service calls were meeting their targets in terms of number of calls taken and number of complaints resolved, then all is good, right? Wrong. Dell Computer had to take back ("insource") its outsourced customer service centers because of the huge number of customer complaints they were receiving about it--and the drop-off in number of additional sales that usually accompanied customer service calls. And, on the "core" side, Procter & Gamble, one the world's leading companies known for its innovative product design, has now "outsourced" or more appropriately "co-sourced" its product innovation process--for a simple reason. Procter & Gamble has 1,500 "product designers"--those people who come up with new product ideas that consumers globally clamor for and Wal-Mart sells to us all--but the world has 15,000 of them. So, P&G, realizing 15,000 people developing product ideas would far out-innovate/out-create product ideas than could 1,500, created a co-sourced innovation model with product designers around the world--harnessing the brainpower of people well outside their organizational walls. Recognizing that such new models of innovation and strategic value are occurring, quickly and all over the place, forces all of us to re-consider the role, impact, and type of "outsourcing" relationship that makes sense--and that far too often is ill- or not-at-all considered because of the tired old outsourcing model underlying and offered by most service providers.
4. The contractual crunch and win-lose contracts have unintended consequences. Early on in outsourcing, it was easy to take out costs from redundant processes and locations and bloated technology areas. But lately, it has become harder to deliver the savings promised for a few reasons: 1) the easy fat was cut because of the wrenching margin and competitive pressures just about all industries have been under the past five years; 2) customers learned lots about what to do and how to do it--before they handed over their processes to outsourcers; and 3) customers learned about service level agreements (SLAs) and the use of "change orders" that "put the squeeze on their customers" for more money as a means to cover up their poor scoping capabilities of bidding and running the jobs in the first place. With what result? Outsourcing has become more difficult to support because | |
