October 2005
www.mtdmfederation.ca

Precisely Canadian is produced by the Canadian Machine, Tool, Die & Mould Federation, a Cooperative Initiative of CAMM, CTMA, CPMA and the Mould Makers Council of CPIA.

The Goal of the Federation is to Address as a Unified Force the Issues Common to Each Member Association.

Table of Contents

  1. Free Trade With South Korea Could Eliminate Your Business
  2. Education Summit Leads to Specific Recommendations
  3. Annual EDC Auto Seminar Scheduled For October
  4. MTDM Companies Join Ontario Trade Mission to Alabama
  5. Mould Manufacturing Industry Study Released
  6. Ed Bernard’s Dedication Recognized With a Clark Award
  7. Two-Component Moulding Produces High Quality Car Post
  8. APEC Meeting Addressed Counterfeiting and Piracy
  9. Enhanced Performance Achieved Through Collaboration
  10. Virtual Mexican Event Became a Profitable Actual Event
  11. European Markets Explained by Pathtrace
  12. Canada and States Still Major Destinations for Auto Investment
  13. St. Clair College Establishes New Plastics Engineering Program
  14. Trade Shows Offer More Than a Chance to See Technology
  15. Equipment-Based Lending Measured Against Enterprise Approach
  16. Last Word: Keep the Federation Moving Ahead As a Strong Voice

Free Trade With South Korea Could Eliminate Your Business

ED BERNARD
Chairman, CMTDMF (President, Bernard Mould Ltd.)

Well, just when you were thinking that there were absolutely no other blows that our industry could take, we learn that Canada is within eight months of having a free trade agreement with South Korea.
 
South Korea has nine different auto companies (that I know of) building cars. Three of those companies export to North America; Kia, Hyundai, and Daewoo. Obviously South Korea has a mature MTDM sector that can provide tooling for such an advanced automotive industry. Unlike China, where we have been able to offset their unfair labour costs with our experience and innovation, South Korea also has an abundance of experience and innovation to support their extensive and mature automobile industry,
  • BUT they also have labour costs at about 1/10 of our own. China’s MTDM labour cost is about 1/20 of our own.
If the Canadian government institutes an unrestricted Free Trade Agreement with South Korea, their MTDM sector will probably take over all of our customers and replace the Canadian MTDM sector completely.
 
South Korea cannot compete in Asia against China so they have targeted Canadian MTDM shops. South Korea’s history proves that they can be very effective to achieve the results they target. Reports from the Gwangju Die & Mold Industry Development Association indicate that the South Korean government has provided $5 million dollars for market analysis and $200 million dollars for market penetration.
  • What was our government doing for us? Free trade with South Korea. We’ll do our part to protect your interests, but we can only do so with your support.
Please note: You will be receiving a Federation survey. It requests your appraisal of about 20 issues facing our industry. We need your opinions and evaluations so that we can address and lobby our government in time on such matters as the free trade negotiations with South Korea.
  • The Federation’s website and newsletter have been created to provide you with a voice, and a choice. Use them, or loose it.
ed@bernardmould.com, CMTDMF

Education Summit Leads to Specific Recommendations

The inaugural Can/Am Technical Education Summit (www.techedsummit.com) at St. Clair College in Windsor has resulted in specific recommendations to help ensure young people are qualified and interested in working in the MTDM industry. The Summit was a joint American/Canadian event and the first initiative out of the new Great Lakes Manufacturing Council.
 
The two-day meeting took place at St. Clair College in early summer. The Great Lakes Manufacturing Council is an initiative designed to bring back the economic vitality of the tool and mould making industry around the Great Lakes. St. Clair College was a key partner in the Summit with Owens College in Toledo also contributing significantly to the success of the event. 
 
Prior to the Summit, Dick Blais, executive director for Project Lead the Way in the States, and speaker at the Summit, met with many representatives as well to show off to an even larger audience this initiative. Blais talked to professionals from the technical, education, and training groups, representatives of the Ontario government and boards of education in Southwestern Ontario.
 
Out of his presentations, schools in Ontario were invited to join Project Lead the Way which provides enriched (optional) curriculum in maths and sciences at the middle school and high school levels, at no cost.  The curriculum is designed to help prepare students for the demands of technical post-secondary education programs.
 
The curriculum is developed with the assistance of partners such as NASA, and funded privately. 
 
There were over 90 participants at the Summit including 18 speakers/panelists. The
Canadian Consulate General in Detroit played a lead role in the development of the program and events. Sandy Munro, president and founder of Munro and Associates, provided at the dinner meeting his views on the current state of technical education, the importance of cooperation between Canada and the United States, and suggested alternate messages for counselors to communicate to students.
 
The Summit culminated in establishing specific goals which will be pursued by participants and the Council for Great Lakes Manufacturing.
  • For further information on the Great Lakes Manufacturing Council and the plans out of the Summit contact Rainer Kunau, trade commissioner, Canadian Consulate General, Detroit. Phone 313 446-7015; e-mail: rainer.kunau@international.gc.ca.

Annual EDC Auto Seminar Scheduled For October

Ever been to EDC’s annual seminar on how to succeed in the global auto industry? Either way, consider attending what is formally called the “Annual Automotive Tool, Die and Mould Seminar.”  The October 25 event, the eighth, in Windsor, is held in conjunction with PriceWaterhouseCoopers. This year, EDC is focusing on an overview of the global automotive market as well as strategies for success.
 
Guest speakers this year include:
  • Michael Robinet - CSM Worldwide on Global Production Dynamics: Looking Past the Obvious
  • Dr. Jay Baron – Centre of Automotive Research on the North American Tooling Outlook
  • Dean Mullet – PriceWaterHouseCoopers (Topic to be announced)
  • Dennis DesRosiers - DesRosiers Automotive Consultants  on the Outlook for North Amercian Auto Sector: Implication for MTDM sector.
Special guest and keynote lunch speaker will be Rob Wildeboer, chairman of Martinrea International Inc., who will present MartinRea’s global strategy and how his company utilizes EDC’s Tooling Finance programs.
 
The cost to attend the seminar is $90 (GST included) when you register and pay online or $100 (GST included) if you register via fax.

MTDM Companies Join Ontario Trade Mission to Alabama

In June, representatives of six Ontario companies from the machine, tool, die and mould industry participated in an Ontario trade mission of automotive parts suppliers to Birmingham, Alabama.
 
“The mission allowed the companies to make contacts in a growing automotive market they would probably not have visited on their own,” says mission organizer George Braoudakis, international marketing consultant for Ontario Exports Inc. “The 13 companies we had in Alabama held more than 65 meetings with potential buyers and partners.” 
 
Ontario Exports Inc., the export development agency of the Government of Ontario, organized the mission in cooperation with the Canadian Consulate General in Atlanta. The mission was scheduled to coincide with the Automotive News Manufacturing Conference and the fees for the mission included a conference pass.
 
 “We knew the right people to meet with Ontario companies would be at the conference,” Braoudakis explains. “It was a plus that participants could hear the speakers and take the plant tours.” 
 
One of the TDM companies on the mission was Windsor’s Nova Tool and Mold Inc.
 
“The tier one suppliers are just setting up base in Alabama to support Honda and Mercedes, and in a year or two, there will be a thriving industry,” says Alex Toldo, sales manager for Nova Tool and Mould. “When that happens, we’ll be in a better position to take advantage of the opportunities because of the contacts we made during the mission.”
 
Four major OEMs are now operating in Alabama: Mercedes Benz invested $1billion in two plants in Vance; Honda invested $1billion in two plants in Lincoln; Toyota Motor Manufacturing has a $450 million engine plant in Huntsville, and Hyundai’s $1billion plant in Montgomery started production in March 2005.
 
For companies new to exporting, Ontario Exports Inc. offers the New Exporters to Border States (NEBS) program. During a NEBS mission, companies learn the basics of exporting to the U.S. from a customs broker, a freight forwarder, an immigration specialist, an accountant, a banker and a manufacturers’ representative over two days at a border crossing in either Buffalo or Detroit.
  • To sign up for the next NEBS or for more information about the program, contact Ken Campbell at 416 325-6659 or ken.campbell@edt.gov.on.ca.
  • Companies in the MTDM industry who are interested in exporting to the U.S. can contact George Braoudakis at 416 314-0203 or george.braoudakis@edt.gov.on.ca.

Mould Manufacturing Industry Study Released

Plante & Moran has recently completed its “2005 North American Plastics Industry Study for the Mold Manufacturing Industry.” The company studies the plastics processing industry annually and the mould manufacturing industry biannually. While Canadians were invited to participate, no one from the Canadian community did so. Companies that do participate in the survey receive an extensive report.
 
In general, the industry is performing better than the last several years, with some companies expanding hours worked and enjoying healthy profits. However, success is not enjoyed by all.
 
PROFITABILITY RATIOS
  1. Earnings Before Interest, Taxes and Owner's Compensation to Net Sales:
    Struggling companies 2.9%; Successful companies 14.9%
  2. Return on Assets:
    Struggling companies 4.3%; Successful companies 24.9%
  3. Three Year Sales Growth:
    Struggling companies –9.2%; Successful companies 29.0%
  4. Three Years Earnings Growth:
    Struggling companies-17.4%; Successful companies 52.5%
On a very positive note, the industry backlog averaged 22% of current sales - a harbinger of 2005 profits? 
 
Below are several other findings from the mould manufacturing survey.
  • Companies in the survey that worked in “soft” tooling tended to have lower profits, 
  • Companies that produced moulds for under 400 ton presses but higher cycle count capability made the most money,
  • Companies with a higher quote success rate appeared to buy utilization as they tended to have more employees and more available machine capacity - AND they did not make more money.  Clearly, the quote success rate correlated much higher with the hunger of the shop and not the profitability of the shop,
  • Companies with more customers for 80% of sales may have lower risk due to diversification, but they did not earn more money,
  • Patented technology did not correlate with increased profits.  Perhaps the cost to develop and protect the technology was more than the value to the customers,
  • Employee turnover tended to increase with more temporary and contract workers, but otherwise did not significantly correlate with profits,
  • Increased schedule bumping impacted negatively on profitability.  Interestingly, shops that had higher incidences of bumping also had higher-paid employees,
  • Companies that focused on quality had significantly more profits.  This was measured by the number of personnel responsible for quality and the attention to warranty costs and change orders,
  • Prototype moulds demanded faster delivery time. Other types of moulds did not correlate profitability with delivery speed,
  • Size generally does NOT matter - companies make money based on how they are designed to serve their customers, not economies of scale.
  • Jeff Mengel is a partner in the Chicago office of Plante & Moran, PLLC and was a speaker at the September CAMM/CTMA/CMTDMF meeting.

Ed Bernard’s Dedication Recognized With a Clark Award

For his willingness to lend his expertise to a number of automotive industry-related initiatives in the Windsor area, Ed Bernard, president, Bernard Mould Ltd. and Comprehensive Plastics Technologies, received the 2005 Clark Award from the University of Windsor. This year’s five recipients received their awards at a dinner in their honour.
 
Ed Bernard has served on the Advisory Council of Windsor University’s Centre for Automotive Research & Education and has been a guest lecturer on business ethics at the Odette School of Business. In addition to his service to professional associations, he has been product designer, coordinator, artist and logistics advisor to CarTunes on Parade since 2003 and has served as co-chair of the International Ambassadors Tours for Windsor and the surrounding area since 2003.
 
The Clark Awards have been presented annually since 1994. Named in honour of the late Charles J. Clark Sr., former Chancellor of the University of Windsor, the award recognizes outstanding personal service of both alumni volunteers and friends of the university who have made significant commitments in time, energy and expertise, by serving on University of Windsor boards, committees or campaigns, or who have worked extensively to increase the profile and reputation of the university.

Two-Component Moulding Produces High Quality Car Post

A special B-post finisher on the Mercedes-Benz CLS Class adds to the elegant bodywork of this four-door coupe. Freeglass GmbH & Co. KG, (Schwaikheim, Germany), manufactures the finisher using innovative technologies in a two-component injection moulding process involving two grades of the polycarbonate Makrolon® from Bayer MaterialScience AG.
 
The post finisher is immediately noticeable when opening the door. The glass-like quality of the component is a result of a two-layer structure consisting of a transparent Makrolon® automotive glazing grade and a black Makrolon® grade for optical applications.
 
By optimizing the cooling behavior of the injection mould, it was possible to achieve the high reflection properties of the post finisher. IR cameras were used to identify areas of the component that had not cooled properly. For example, the groove for the sealing edges was at first a problem.
 
The solution was CONTURA® technology from Contura MTC GmbH. This technology enables injection moulds to be produced whose cooling channels precisely match the contours of the component.
 
The result is even dissipation of heat from the mould, not only reducing stresses in
the component but also minimizing differences in the level of reflection
and shine of the surface.
 
An additional factor that is assisting in optimum temperature control is swivel platen technology for two-component injection moulding since this offers excellent
cooling performance.
 
Several functions are also integrated into the finisher such as mounts for
the sealing lips and a centering lug as well as two “eyes” for the screw
connections used to mount the component on the metal B-post.
  • Evelyne Schmetz is identified as managing director of Contura. The email is given as info@contura.mtc.de.

APEC Meeting Addressed Counterfeiting and Piracy

The Asia-Pacific Economic Cooperation (APEC) trade ministers met in June, in Jeju, Korea, for the annual meeting of Ministers Responsible for Trade. It brought Canada together with key partners such as China, Indonesia, Japan, Korea, Mexico and the United States.
 
The APEC ministers released a statement on WTO issues that helped resolve one of the key barriers to progress in WTO services sector negotiations by endorsing the "Swiss formula" for tariff reduction on non-agricultural goods.
 
The Swiss formula reduces high tariffs at a faster pace than low tariffs. Success in the WTO's Doha Round of Negotiations is expected to bring huge benefits for Canadian exporters, given that all of Canada’s significant trading partners are WTO members.
 
The ministers agreed on an APEC Anti-Counterfeiting and Piracy Initiative to help combat patent and copyright infringement in the Asia-Pacific region—a major concern for Canadian businesses. The initiative includes measures to strengthen contacts among enforcement agencies in the region, and training on enforcement and public awareness.
  • The discussions held at this meeting will continue at the upcoming APEC Summit on November 18 and 19, 2005.

Enhanced Performance Achieved Through Collaboration

For nearly five years, the Center for Automotive Research (CAR) in the United States has been working with the State of Michigan to address the declining condition of its die and mould sectors.
 
The State was quick to recognize the severity of the threat, and played a lead role in the development of a campaign to publicize and address the problem.  This role included a hand in the creation of the Coalition for the Advancement of Michigan's Tooling Industries (CAMTI) and a decision to fund a tooling collaborative program.
 
While the underlying threat continues to exist, there are grounds for optimism for the Michigan tooling industry according to CAR:
  • Remaining tooling companies generally report increased business and a modest improvement in margins,
  • A number of major automotive customers now have been exposed to a perspective that questions the centrality of their near-exclusive focus on initial tool costs, and
  • Seventeen tooling companies have joined together, collectively called the United Tooling Coalition, (UTC) to reduce tooling costs in learning from and cooperating with each other, jointly seeking new orders and collaborating to win business that no one could win on their own.
The successes realized by the UTC in bringing together small competitive companies to work collaboratively resulted in additional actions by the State of Michigan.  An additional training grant was provided to the UTC for continuing efforts to reduce tooling costs through collaboration. 
 
Funding for the UTC efforts have been jointly provided by the State and the coalition members.  More broadly, the State passed legislation to create tool and die recovery zones for Michigan-based tooling collaboratives that also developed cost-reducing initiatives through collaborative relationships.
 
Because of the importance of having complementary business capabilities, the UTC expanded after the first year to seventeen companies. Companies for the second year were carefully evaluated based on capabilities and individual reputation.  The UTC now has significant resources for engineering, tooling (progressive dies, small to large moulds, line dies, fixtures and system integration/automation, and die cast), tryout, and maintenance support.
 
The second year of the UTC (September 2004 through August 2005) brought improved performance as follows:
 
  • Developing knowledge from, and implementing world class best practices,
  • Learning advanced manufacturing technologies and engineering systems,
  • Learning business technologies,
  • Operational improvements through standardized work flow,
  • Improving quoting accuracy,
  • Consolidating purchasing to reduce costs through economies-of-scale (bulk purchasing),
  • Work load balancing across the coalition to make better use of available capacity.
The UTC has made significant progress at developing a collaborative model that goes beyond traditional approaches at reducing costs and improving performance.  In some ways, the collaborative model emulates some of the customer-supplier relationships that have evolved in Japan. 
 
The UTC also recognizes that additional and continuous efforts are needed in order to provide tooling at world class competitive prices, and these efforts are in progress. The UTC also believes that there is significant opportunity by developing a close alignment with Toyota. Major improvements can be made in developing standardized work flow and systems that directly support Toyota if a long-term relationship can be pursued.

Virtual Mexican Event Became a Profitable Actual Event

Mexico represents a huge potential export market for Ontario’s machine, tool and die and mould makers.
 
Last April, Ontario Exports Inc. (OEI), the export development agency of the Ontario government, teamed up with CAMM to host a virtual trade mission  (VTM) in Windsor. The VTM used videoconferencing technology to link CAMM members in Windsor with market experts and potential buyers in Monterrey, Mexico.
 
Fred Sheehy, OEI’s international marketing consultant for the Caribbean and Mexico, said that a total of 30 people in the two countries took part in the VTM. 
 
“This helped make many of the CAMM members ‘export ready’ for the OEI-sponsored trade mission we (subsequently) made to Monterrey and other Mexican cities in June this year.
 
 “This trade mission was the most successful we have experienced in the past 10 years, with more than four million dollars in potential orders for Ontario companies. I think we can attribute some of this success to the information exchanged during potential buyers/sellers at the earlier VTM.”
 
For six days, five Ontario companies visited Mexico City and Monterrey, the focal point of the mission. The five companies that formed the delegation were: Nova Tool and Mold, Accurate Mold, Cavalier Tool, Applied Precision, and New Form Tools.
 
The agenda in Monterrey included a group briefing, a visit to Expoplasticos, the main plastics show in Northeast Mexico, and a group visit to General Motors’ assembly plant. A customized matchmaking program was put together for each company. Each company had an average of 12 individual meetings with local Monterrey buyers, representatives and distributors.
 
During the AMT mission, the group received an estimated total of $4 million (US) worth of RFQs. If only 10% of the RFQ’s turn into real POs, the result of this trip in terms of sales could be expected in the area of $400,000 US. OEI and the CG will be working in the next months towards completing the third step in the strategy which will consist of bringing key Mexican buyers of AMT to Ontario.
 
The dates and names of the Mexican participants are still yet to be defined. Worth noting is that apart from the three steps plan prepared by OEI and the CG, both partners are working on a regular basis with individual companies that have potential for the Monterrey market.
  • To learn more about these type of opportunities contact David A. Valle, trade commissioner, Canadian Consulate General in Monterrey, Mexico, Phone 52 81 8344-3200 ext. 3351; email david.valle@international.gc.ca.
  • Maureen Angus is area director, South America, Ontario Exports Inc. Phone 416 325-9821; email Maureen.Angus@edt.gov.on.ca.

European Markets Explained by Pathtrace

Precisely Canadian reports on events and markets not just peculiar to Canada, or the United States. So, after reading a news item on the high level of sales experienced by Pathtrace in North America and Europe, we asked the company for its perspective of the European economy. Pathtrace is a global company known for EdgeCAM, a product range for mould, die and production manufacturing.
 
While there is undoubtedly growth in the Chinese markets, Pathtrace told Precisely Canadian that growth and opportunities also exist in the European markets. This condition is also apparent in the company’s traditional markets such as Scandinavia and Germany, and the newer markets of Poland and the Czech Republic.
 
In markets such as Denmark, the company says it is seeing investment in new machines and technology by tool makers to help them compete against lower cost economies.
 
The more complex mould tools continue to be produced locally, with manufacturers citing quality, lead-time and the convenience of local suppliers as the deciding factors. 
 
Jørgen Sønder, CEO Pathtrace A/S, comments, “Complex moulds, with more materials, inserts or different density to boost the structure, cannot be made and put into production without close cooperation between the mould producer and the people at the production site because adjustments are often needed to achieve the right quality.”
 
Many larger mould shops have facilities available in China and will decide to outsource or produce locally, based on the complexity and lead-time of a mould.
 
The newer markets of Eastern Europe have also grown substantially in recent years with many (mainly German) organizations either setting up subsidiaries or outsourcing work to these countries.
 
This is especially prevalent in the automotive industry. Quality and lead-time are comparable with what can be produced locally, but costs are much lower.  The local proximity of these markets also gives them an edge over the distant Asian markets. 
 
Poland and the Czech Republic have also benefited from their entrance into the European Union last year, making it easier for other European countries to invest into new facilities for these markets.
  • Pathtrace Engineering Systems is a division of Pathtrace plc. Your contact in Canada for Pathtrace is Tracy Affleck, email: taffleck@pathtrace.com.

Canada and States Still Major Destinations for Auto Investment

APMA’s bi-annual tracking of announcements by the major automotive assemblers indicates their investments decreased 42.5% to $8.5 billion (Cdn). The good news of course is the announcement by Toyota for a new assembly plant in Woodstock, Ontario worth $800 million.
 
In the first six months of 2005, total worldwide investments by major automotive assemblers equaled $8.454 (down from $14.709 one year prior). (All figures are in $billion, Cdn.)
 
Reasons for the investments are:
  • a strong truck market (Big 3 control 85% in North America),
  • a North American market that is still strong,
  • expanding European markets,
  • a growing Middle East market,
  • an Asia-Pacific market expected to grow significantly over the next five years,
  • and the need to replace many old, inefficient plants not designed for the right products, lacking flexibility, and located in the wrong market areas.
Canada and the United States, historically ranking well when compared to other countries for investment dollars, received some new investment with the United States gaining $0.837 and Canada $0.800 in the first half of 2005. Countries leading in investments were China ($1.8) followed by Thailand ($1.114) and Iran ($1.063). Countries experiencing significant declines in new announcements compared to one year prior include China, Slovakia, Spain, Turkey, South Korea and Brazil.
  • For more information, contact: Gerry Fedchun, APMA president, at 416 620-4220 Ext. 228 or by email at gfedchun@apma.ca.
  • The University of Windsor’s Office of Automotive Research and Training produces a bi-annual “Major Automotive Assembler Investments." It appears to be a very comprehensive effort. The author is Dr. A.J. Faria, email AD9@UWINDSOR.CA.

St. Clair College Establishes New Plastics Engineering Program

A critical shortage of skilled workers in Windsor-Essex County, along with the increased competition from Asia and India, necessitated a new program for skills training. St. Clair College’s Ford Centre for Excellence in Manufacturing was perfectly positioned to help build a program that would fulfill that need.
 
Guy DiPonio, vice president, Valiant Tool and Mould Inc. in Windsor, has been working with St. Clair College for the past few years in order to develop a new program geared specifically to this market. That dream became a reality in September 2005 when 10 students started their first year in the Plastics Engineering Technology Program.
 
“The mould making industry in Windsor-Essex County has evolved to the point where we must embrace new technologies and develop skill sets in order to be competitive on a global market,” says DiPonio. “Launching this program and training people to comprehend the entire process– from design to production – will be one way the industry can achieve its goals.”
 
Two years in the making, this innovative program will be an invaluable training ground for young people looking to pursue a career in the plastics manufacturing industry.
 
Plastics Engineering Technology, a three-year advanced diploma program, will provide students with more comprehensive skills training than what has been traditionally found in mould design programs. Students will learn the entire plastics production process rather than just one element, making them highly marketable once they graduate.
 
“We have had tremendous industry support for this program,” says Omer Hageniers, Chair of Engineering and Manufacturing Technology at St. Clair College.
 
Hageniers also points out that this program will be a natural extension to the foundation programs of Mould Making and CAD/CAM, already offered in the Ford Centre. The CAD/CAM program in conjunction with the launch of this new program is also being modernized. Thanks to partnership agreements the college already has with a number of equipment manufacturers, it was able to install multi-axis and high speed machining. which will benefit a number of programs including the Plastics program.
 
An E-MOTION 200/110 US all-electric, tiebarless injection moulding press was another generous contribution, by Engel Canada Inc., of Guelph.
 
Students who enroll in the new program will learn such skills as product design, mould design, plastics processing, prototyping, project management, and project costing.
 
“Gone are the days where a company can design and build a mould, and do try-outs by trial and error” says Joan Hunter, Faculty, Mould Design. ‘Things’ like smart moulds which incorporate sensors that give pressure and temperature readings integrated into a feed back loop will be an innovation that keeps us one step ahead of the competition.
 
“It’s important for students today to understand that there is more opportunity in this industry than just the automotive sector,” says Hunter.
 
With an estimated shortage in Windsor-Essex Counties of some 3,400 skilled trades personnel today, it is projected that the number will grow to nearly 7,000 by 2009. St. Clair College is currently working with two universities to achieve articulation agreements for the graduates of the Plastics Engineering Technology Program. This will allow students an easy transition to the achievement of a degree in Plastics Engineering.
  • This is an abbreviated version of an article with excellent information which would once again be a useful educational tool for you to use with clients. To obtain the full text, contact Ann Hetherington, director of marketing and communications, St. Clair College at ahetherington@stclaircollege.ca.

Trade Shows Offer More Than a Chance to See Technology

This is a different version of the basic Calendar of Events, at least for this issue.
For most of you, a trade show has been a chance to see a wrap-up of technologies. But trade shows are a multi-component resource. They are, for example, an excellent way to move into new markets, sometimes as an exhibitor.
 
Fakuma, EuroMold, PlastIndia, Plast Milan, PlastImagen, Chinaplas, and of course NPE and IMTS should show up on your radar screen as worthy of your examination.
  • So which ones do you use and how? The answer is up to you, according to which shows best serve your business needs.
  • Some of those shows have a national pavilion generally organized by CPIA. You can learn more about them through the CPIA website, www.cpia.ca or contact Sally Damstra at CPIA (sdamstra@cpia.ca). Sometimes there are even different options on how you can participate at these pavilions.
For a huge list of trade events for the next year, try the Plastics News website, www.plasticsnews.com. It’s quite complete, and also check out www.tool-moldmaking.com. It has a fairly comprehensive database.
 
There’s also an excellent newsletter, by John Margeson of IC in Ottawa. Margeson profiles trade shows throughout the globe, before and after the event. You can subscribe to his email by contacting him at Margeson.John@ic.gc.ca.

Equipment-Based Lending Measured Against Enterprise Approach

Having effective financing relationships that take into account unique business circumstances can create cash flow for new developments. At the same time, managing financial relationships is very important and can be time consuming. 
 
Many banking relationships are secured by the enterprise value of a company via a general security agreement (GSA). In this type of agreement, a financier will lend an amount relative to the value of all the company’s assets – i.e., cash, inventory, receivables, equipment and property. Since the value of these assets changes on a regular basis, companies must consistently manage this type of banking relationship by providing margin reports. The terms of this type of relationship are normally reviewed annually or semi-annually to ensure that the lender is well secured.
 
Not only does this type of financing require close monitoring, it also can create too high a dependency on a single source of financing. While this type of lending is commonplace for working capital and cash flow management purposes, there are companies that diversify their lending sources between short-term, enterprise-based debt providers and companies that focus on equipment-based lending.
 
Equipment-based lending allows companies to align their financing arrangements on a specific project or contract basis. This involves using specific equipment as security. Typically, the value of the equipment is easy to evaluate and the amortization is determined based on the expected useful life of the equipment or associated cash flow from the project the equipment will support. As a result, there is no need for regular margin reporting, and more importantly, there is certainty of the loan terms.
 
Pre-approved financing allows management to make strategic decisions with confidence. An equipment-based lender can review the financial strength of a company and provide them with an amount they can borrow along with financing terms for a predetermined approval period. Borrowers can use these terms to plan their growth strategies and buy assets “opportunistically” thereby saving them time and money.
 
A second valuable component of equipment-based lending is that groups working in this area stay current with industry trends. Understanding the collateral and equipment they finance relative to what is happening in the marketplace is part of being a competitive business partner. Equipment lenders committed to a specific industry work to adjust their financial products to reflect market conditions and customer needs.
 
There are several examples in the market today of how this is occurring. One example is the case of interest-only payments during retooling phases or during the set-up phase of a new equipment installation.
 
Many equipment-based lenders recognize the importance of making this option available to customers to help minimize the impact on cash flow when bringing on new programs. Another example is progress advances to help meet the installment payment requirements of equipment vendors. It is important to note that structures like this are dependant upon the financial strength of the company taking on the debt obligations.
 
In these very competitive times there are innovations being made to financial solutions for Canadian manufacturers. Companies that seek them out can obtain benefits that include: more cash flow to fund innovation; more certainty around their financing arrangements; and having structured options that match the unique needs of the industries they operate in. Equipment-based financing is an attractive solution that delivers many of these benefits.
  • This article was provided by Paul St. Onge, an account manager at GE Commercial Finance, Equipment Financing, Canada, at Precisely Canadian’s request. Paul can be reached at Phone 905 858-4967; email paul.st.onge@ge.com.

Last Word: Keep the Federation Moving Ahead As a Strong Voice

The latest outlook by APMA for the automotive industry in Canada is encouraging. Consider the information as the “now” scenario, a positive scenario. After reading your chairman’s remarks on the effects of a free trade agreement with South Korea, you could have a “near future” condition that is anything but positive.
 
Are we alarmists? Maybe, but it doesn’t take much to lose market share or business to another country in these times. Where you once could rely on your technical skills to succeed, now you need to access and tap into all the business resources you can, including governments.
 
You’ll also want to use governments to help put in place a level playing field. That’s the role of CMTDMF, serving as a unified voice.
 
For some time, governments have listened only to those industries that speak with a unified and strong voice. Such a state doesn’t just come about by the dedication of a few volunteers. After a while, they just burn out.
 
The Federation needs new blood to keep it moving ahead and you’ve been “volunteered.” The time for parochial visions are gone and certainly not the way of the future.
 

Disclaimer: All information in this publication is accurate to the best of our knowledge.
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