Manufacturing in Hamilton is undergoing a major transformation — new sectors are emerging, as are an array of more specialized, high-tech products
Lisa Grace Marr
The Hamilton Spectator
One day in January, Hamilton’s Robert Hattin found himself in a face-to-face with Stephen Harper while attending a meeting of the Canadian Council of Chief Executives in Montreal.
“Here I am, some guy from Hamilton with an office (building) smaller than my house, talking to the prime minister,” said Hattin, recently named chair of Canadian Manufacturers and Exporters.
He spoke to the prime minister about the need for skilled labour in the country, and to leverage the growing “educated underclass” of recent university graduates.
He said Harper responded thoughtfully, acknowledging the seriousness of the issue. Because while Ontario’s manufacturing sector has shed more than 255,550 jobs in the past 10 years, it’s far from dead.
In the Hamilton CMA (including Burlington and Grimsby), more than 970 manufacturing companies employ 13 per cent of the local workforce, earning it the No. 2 spot after retail and wholesale trade in the Top 10 employment sectors. Thousands of diverse products are manufactured in Hamilton, and sold around the world.
There’s enough food made in The Hammer to build a great sandwich coast to coast: take a couple of slices of Dempster’s Breads (Canada Bread), slap it with some mustard (thank you G.S. Dunn’s), slide in some Salerno mozzarella, maybe some Maple Leaf ham (made now in Burlington, soon to be processed in a shiny, new plant in Glanbrook) or Venetian Meats salami.
Aside from that, there are still plenty of recognizable brands with longtime Hamilton factories pumping out everything from candy (Kraft and Karma) to steel (ArcelorMittal Dofasco) to boots (Baffin).
But the new Hamilton manufacturing sector, one that is emerging without a dominant steel factor, is leaner, smaller, more automated and specialized than ever before.
Neil Everson, the city’s director of economic development, said the city expects to find out more about those changes with a Deloitte Touche report due out this spring — the first such report in about 10 years.
He expects to see more companies listed which are involved in the fabrication of larger industrial parts as well as companies that are highly specialized.
“Fabricating large parts is no longer done efficiently offshore. Shipping costs are making it much less acceptable to build offshore. I think we’ll see a lot of repatriation back to the United States,” he said. “It’s all about cost competitiveness. We’re going to see a lot more investment in technology.”
Felton Brushes, an old company — started in the Great Depression — is a perfect example.
Tony Ponikvar, president, said since 2004 the company has invested in automation technology that has opened up new markets. One of its products is a brush that cleans the thread on oil pipelines. Like oil, sales of it have boomed.
However, Felton Brushes has not had to hire an exponential amount of staff due to the new technology. What it has done, though, is secured existing jobs.
“We’ve been able to increase the quality of our products. We’re getting into new markets. I think the Made in Canada label is underestimated greatly. We may not be able to sell brooms to Africa but we can sell some (high-end products) very well. We sell brushes to China too.”
Hattin argues Hamilton’s manufacturing sector still has a critical role to play, even the beleaguered steel industry.
“I talked to (ArcelorMittal Dofasco CEO) Jürgen Schachler about Dofasco and he said there were good conditions. The U.S. is coming back, the auto sector is very optimistic … everyone is very bullish.”
Hattin, former president of Edson, himself has just launched a new company — ProVantage Automation— an industrial-controls design centre in the Ancaster Business Park.
He says manufacturing companies need to think outside the city and even the country for new markets. He holds up several local companies which are doing this such as Handling Specialties (a materials handling systems manufacturer); RMT Robotics (industrial robotic systems maker), Taylor Steel (flat rolled steel) and Mark Chamberlain’s family of innovative companies such as PV Labs.
“From my point of view, there’s a ton of (business) out there,” said Hattin. “We need to foster the entrepreneurial spirit. What we’re saying now is people need to take (opportunity) and participate in the economy.”
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Alcast Technologies ahead of the trend
COMPANY NAME: Alcast Technologies
ADDRESS: 328 Lake Ave. N.
PRODUCT: Aluminum casting
HOW THEY GOT THEIR START: Saltfleet Aluminum Foundry was established by John Doesborgh in 1966. In 1994, his son Gary renamed the company Alcast five years after purchasing it from his father. Andrew Doesborgh, Gary’s son, is vice-president.
Alcast has a found a way to continue making aluminum cast parts as many similar companies are overseas or offering bargain prices. Fortunately, Alcast’s market is not small, several major sectors need aluminum-cast parts: aviation, military, railway, medical and general industrial.
Andrew Doesborgh said the only way to remain competitive is to think lean and stay on top of trends.
For example, in 2008, nearly every piece of equipment was moved at Alcast with an eye to trimming waste and working efficiently. Then it made investments in new equipment that would reduce the need for more labour.
The result? “We have been able to double our capacity in the same space with very little additional labour,” said Doesborgh.
The investments were assisted by government grants of about $100,000, which went to new moulding equipment. It gave Alcast a chance to compete for work in more industries: military, recreational vehicles, communications, railroad and medical.
That meant that, even with price pressures and economic struggles in Europe and the U.S., Alcast managed to build its customer base, setting a record in 2012 for new casting projects, the majority from Ontario.
“While our U.S. customers continue to tread water, a lot of new projects are going ahead quickly here,” he said.
While the Canadian dollar has made exporting more difficult, Doesborgh said it appears to have promoted new project growth within Canada.
Alcast has also taken the time to examine its internal processes from sourcing to delivery.
“One of our smallest accounts in the U.S. was in an area affected by Hurricane Sandy. Their primary vendor was local and also significantly affected. We were able to get new tooling and parts to them rapidly and we got their production lines moving again within two weeks.”
The effort paid off. The account has tripled in value since then and Alcast has kicked off five new projects with them.
Cramaro wraps up business
COMPANY NAME: Cramaro
ADDRESS: Two locations on Arvin Avenue, Stoney Creek
SECTOR: Textiles — Cramaro is one of about 30 textile/clothing manufacturers in Hamilton.
PRODUCT: Tarp systems for tractor trailers and Insta-Fence for garden centres.
HOW THEY GOT THEIR START: Nello Cramaro invented an automatic tarping system including the tarps in the 1970s after seeing fellow truckers fall off trucks trying to secure loads. He made several patents for related equipment. In the ’90s he restarted the company with his sons Martin and Michael when new legislation required trucks to secure loads. Suddenly everyone needed a Cramaro system.
NUMBER OF EMPLOYEES: 35
It all comes down to calculated risk and a bit of nerve.
As far as Marty Cramaro, president, is concerned, it is just that and a whole lot of hard work that made Cramaro successful.
“We had faith. We were very quickly a recognized name in the industry,” he remembered.
Cramaro had an edge in the ’70s and the ’80s because his father, Nello, was the inventor of the tarp system that soon had a global demand. But growing the company wasn’t so easy.
He started working in sales in 1983 — the start of a severe downturn in the economy. But he credits the extremely low sales with sharpening his marketing skills.
Then a Boston-based company approached the family and wanted the rights to sell the product in the U.S. It seemed like a great opportunity.
“Three years later, they came to us and said they couldn’t sell it,” said Marty. “To this day, I’ll never understand that. We bought back the rights, opened an office in Boston and it took off, right away. It was so easy.”
By then, Nello had retired and Michael decided to move to Florida and set up another branch there, operating as the chief technical officer while Marty took over the financial operations. It was a good move.
Cramaro quickly opened dealerships, repair shops and offices in the U.S. and now has operations in five states, with sales in South America, Europe and around the world.
“I was on vacation in Hawaii with my wife and looked up and saw a truck go by with Cramaro written across the back,” he said. “It was just so cool.”
In 1989, an opportunity arose in Australia and he travelled there to set up a new branch. Cramaro Australia was sold 10 years later (“It was just way too far to go,” says Marty). So they sold it, name and all.
The trick for Cramaro has been efficiency. Unfortunately that has meant moving some production of small parts offshore.
“We’re in a low-tech industry. We just had to move some production offshore. All custom work is still done here,” he said.
In addition, about 15 years ago, a customer offered a technology he invented for mesh fencing out of the blue.
“I took 15 minutes and bought it there in the parking lot,” said Marty with a laugh.
It’s called Insta-Fence and is used by retailers from coast to coast for garden centres.
It has shown steady growth but still hasn’t replaced the tarp business as Cramaro’s bread and butter.
Canadian Timber is growing
COMPANY NAME: Canadian Timber
ADDRESS: 276 Ferrie St. E.
SECTOR: Wood products — one of about 50 companies in wood and paper manufacturing in Hamilton.
PRODUCT: The company builds panelized exterior and interior walls, floor and roof components for single and multifamily residential properties, cottages, garages and more.
The panels are built in a shop, marked with identification numbers and assembled like a giant puzzle on-site.
HOW THEY GOT THEIR START: Fred Devries started the company after more than 30 years in home building.
He saw an opportunity to do custom homes or cottages more quickly.
NUMBER OF EMPLOYEES: 5
MARKETS: Canada, global
Most of the past 10 years have been marked by slow and steady growth.
That may be about to change. General Manager Ed Datta said they are gearing up for a delegation from China at the end of the month — a move that fills him with trepidation as much as excitement.
The group is coming to look at the kind of homes Canadian Timber makes — and there are indications they will want to order three model homes to ship back to China for display, and if orders go as they expect, there may be orders for 30 or more homes a month.
That’s a lot of timber.
Datta said one of the company’s main competitors is in China, but what that competitor doesn’t have is the North American name-brand or reputation.
“The new Chinese middle-class, they don’t want to buy Chinese. Funny eh?” he said with a laugh. “(The delegation) has done their due diligence and they are only coming here to see us on a three-day trip.”
The training and quality assurance are details that Canadian Timber will have to work out with the Chinese company that wants to partner with them.
Datta said maintaining quality and price are non-negotiables for the company, and while interest from a foreign company is great, he’s confident the Ontario economy is recovering — and that bodes well.
He credits the company’s top-notch customer service for the positive word of mouth that is the heart of its marketing.
Plasmatreat’s high-tech coat
COMPANY NAME: Plasmatreat North America — sales and technical centre
ADDRESS: 1480 Sandhill Dr., Unit 8, Ancaster
SECTOR: Multiple sectors
PRODUCT: A coating system using new plasma technology which allows microfine cleaning, high surface activation, and functional plasma coating of almost all materials under normal ambient air conditions for a wide variety of applications: auto, aerospace, pharmaceutical, construction, etc.
HOW THEY GOT THEIR START: Plasmatreat North America is a subsidiary of Plasmatreat GmbH, headquartered in Steinhagen (Bielefeld), Germany.
It became one of the first subsidiaries abroad for Plasmatreat for the purpose of working with customers within the NAFTA region.
The team at the Ancaster office co-ordinates all service and support, customization requests, local builds and working with customers on new applications.
NUMBER OF EMPLOYEES: 6
MARKETS: North America
ESTABLISHED: 2000 — moved to Ancaster a year ago from Mississauga
Plasmatreat North America’s vice-president Tim Smith acknowledges that when he describes the new Plasmatreat technology it sounds like “magic beans.”
Plasmatreat is a process that rethinks bonding of materials invented in 1995 by the German founder of the company that uses a rather simple process of blasting a combination of plasma (electricity) and air.
“It is cutting edge. Our biggest challenge is introducing this. It’s very hard to believe unless you see it.”
For example, if you wanted to paint a piece of plastic, paint will bead on the surface. However, after a blast from the Plasmatreat equipment, the plastic will accept the paint.
Smith said it’s so simple, and so effortlessly better for the environment (it removes the need for solvents or other chemicals), it’s hard to sell.
“It’s basic chemistry.”
The applications are nearly boundless. There are 70 applications alone in a typical vehicle.
For example, silicone is used to seal a headlight but silicone repels sealant treatment. However, after Plasmatreat, silicone will accept the sealant — removing the problem of pesky leaks in headlights.
“From there it’s just gone everywhere.”
Recently he created a prototype of a device to treat products for a customer and completed construction of the devices at the 6,000-square-foot Ancaster facility.
He is meeting with North American automakers over the next few months and sees a need in the near future for more staff and maybe even more space.
Smith is confident of the potential growth of about 25 per cent a year in the North American market.
COMPANY NAME: Nem Food
ADDRESS: 96 Covington Dr.
SECTOR: Food — Nem Food is one of about 150 food and beverage manufacturers in Hamilton that includes big national companies such as Canada Bread and Oakrun Bakeries.
PRODUCT: Asian spring rolls and other frozen appetizers
HOW THEY GOT THEIR START: Helen Thieu emigrated from Vietnam in 2007 in search of new opportunities. In Vietnam, Thieu had established a small chain of restaurants and was a founder of several schools. She decided to start her own business in Hamilton because she says she was lucky to find a reasonably priced lot where she built her state-of-the-art plant.
NUMBER OF EMPLOYEES: 15 to 17
The title of president of Nem Food doesn’t adequately describe Thieu’s roles.
“I do sales, work the factory floor, do new product development, answer the phone and do the books,” she laughed.
In other words, there’s no rest just yet, despite Nem Food’s success at launching its Asian spring roll line as a private-label product for Walmart and other national chains.
She managed to pierce the market by installing new equipment that she said makes the entire manufacturing process nearly automatic while adhering to stringent federal health regulations food manufacturers must comply with.
She’s doing double duty as product developer and sales manager as she creates new products while wooing new customers.
Last year she secured a contract with Longo’s and Loblaws to sell her frozen foods under the Nem Food brand.
Meanwhile, she’s created new appetizers: North American flavours such as buffalo and barbecue chicken and a fruit line of cinnamon apple and banana/coconut/strawberry spring rolls. She added new equipment for pita bites, empanadas and egg rolls.
She’s buoyed by sales so far and confident of her product.
“We use natural ingredients, no MSG, no transfats, they taste really good,” she said.
“I would like to have a whole line of appetizers, our new products are not necessarily Asian flavours.”
The biggest hurdle isn’t the selling or making of her appetizers, it’s securing financing. “It’s very hard for us as new immigrants to secure financing. It’s not enough to get a sale.”.