There are lessons that need to be
learned from the closings of the Kelloggs breakfast-cereal plant in London and
the Heinz ketchup plant in Leamington, says Bob Seguin, executive director the
George Morris Centre food-industry think tank at Guelph.
The reasons for the closures are
more complex than media reports suggest, Seguin writes in a report for the
agriculture and food industries.
The closures demonstrate that
investments are necessary to keep facilities competitive, that companies need
skilled workers, that they have to keep up with many changes such as trends in
consumer preferences, packaging, processing and information technologies, and
invest in research and development.
The closures also reflect the increasingly
competitive global environment.
On the other hand, several major
investments have recently been made.
Seguin mentions the Dr. Oetker plant being
built in London, Ont., the many investments in canola-processing plants in
Western Canada, the Premium Brands’ purchase of Piller Sausages and
Delicatessens Ltd. of Waterloo and the $184-million investment Oxford Frozen
Foods is making in wild blueberry processing in New Brunswick.
He could have added Maple Leaf
Foods Inc. investment in a large bakery in Hamilton, its companion investments
in a centralized meat-processing plant at Hamilton and a distribution centre
south of Guelph and a Chinese investment in an infant-formula plant in Toronto.
Seguin says “the primary focus of any significant market or
policy responses must be on obtaining new domestic and foreign investments, and
re-investments in this industry. Entrepreneurial growth and investments (re-investments) in scale and new
technologies must be complementary priorities.
“New investments in developing new and needed labour pools
for a successful food manufacturing industry must be encouraged and spurred.
'The industry’s past successes using traditional sources in rural and urban
Canada are not sustainable,” Seguin says. “New investments in seeking both
domestic and foreign labour as well as improved management expertise (for a
much more competitive marketplace) must be priorities in order to successfully
compete.”
Canadians need to be aware of increasing global competition,
he says. This includes learning from competitors, including the public policy and regulatory supports available to these current
and new competitors, he says.
Governments
need to expand their approaches to regulatory reform, moving “beyond
just removing unneeded or outdated regulations.
“The
competitive impacts within a dynamic marketplace must become a critical factor
in the regulatory choices and processes for implementation.
"Improved measures
of results, impacts and effectiveness must become standard if the domestic
industry is to adapt while sustaining public demands for different regulatory
standards,” he writes.
He says public research needs to be better
coordinated with private-sector innovations.
“It is important to build upon past research successes, and
to seek more innovative market and policy responses needed to match Canada’s
innovation investments and successes (real results in the marketplace) with its
competitors,” he writes.
The report is posted on the George Morris Centre website.
I wish he had added another admonitiation to marketing boards of all types and provinces - stop acting only for farmers and start looking into supply-chain innovations and improvements. That might mean yielding centralized marketing-board controls to individual farmers so they can pioneer their own futures.
