According to a report prepared by Dellotie for Hamilton’s Economic Development Department, the city has a good chance of attracting more foreign direct investment (FDI) because of its relatively affordable land, access to good transportation and a positive business environment. The city is already home to key industrial sectors like advanced manufacturing, Health Sciences, Argi Food, clean technology and IT. But the report also warns that Hamilton needs to ramp up a strategy to take advantage of these assets or risk losing out to other Ontario communities who already have well-developed foreign investment strategies in place.
The report points out that the old forms of foreign investment, e.g. factory start-ups are being replaced by merger and acquisition activity. But such acquisitions are still beneficial because they often involve investment in expansion and technical upgrades. Looking at Hamilton, recent examples of foreign acquisitions include:
- Toshiba International acquiring ElettraTechnologies, Located at the Stoney Creek Business Park,.The 50,000 square foot facility employs 40 people with plans to double the workforce in the coming years.
- AZZ, North America’s largest galvanizer located to Hamilton leasing 80,000 square feet of space and created 50 jobs.
- Texas based Darling International purchased Rothsay a division of Maple Leaf Foods (rendering and biodiesel business) for $645 million. This is one of six Rothsay plants in Canada and employs approximately 120 people.
- Ebro Foods of Spain purchased Olivieri Foods for $120 million. The Hamilton fresh pasta plant employs approximately 180 people
- Grupo Bimbo one of the world’s largest bread companies (from Mexico) acquired Canada Bread for $1.83 billion. Grupo Bimbo’s expansion into the Canadian market is dramatic, occupying 385,000 square feet of space and employing over 300 people
In addition, The Fraunhofer Project Centre for Biomedical Engineering and Advanced Manufacturing is a partnership between Europe’s largest applied research organization and McMaster University.Many had assumed that Fraunhofer would partner with London and the University of Western Ontario due to their existing business relationship. However, as a result of McMaster university’s strong reputation in cell therapy research, coupled with $4M in funding from the Province, the deal was made in Hamilton. The project is anticipated to create up to 100 jobs and attract top scientists and researchers from around the world. Hamilton helped seal the deal though the engineering of a land swap.
Delloite says Hamilton is on the right track in a number of areas, but needs to do more. First it needs to overcome erroneous but persistent negative perceptions around it being an “old technology” city with pollution and labour disadvantages.
The report urges Hamilton to become much more visible on the international stage with enhanced participation in trade shows and conferences.
The city is urged to continue to cut red tape around development, The report notes that Ontario generally has a poor reputation when it comes to the approvals process.
Five years ago the city voted to provide its Economic Development Department with a significant increase in its budget. The Delloite report suggests that investment has paid off significantly, and that now is a good time to make further investments in the department.