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Kapil Lakhotia_London Manufacturing
Kapil Lakhotia
President & CEO - London Economic Development Corporation

Midsized City Manufacturing Above its Weight

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Takeaways

  1. London has a diverse manufacturing environment which is best known for defense, aerospace, automation, advanced manufacturing and food and beverage processing.
  2. London invests heavily in infrastructure including highway access, high capacity servicing to industrial parks, and municipal investments in industrial properties.
  3. The London Economic Development Corporation works with Fanshawe College and Western University—which, combined, attract over 60,000 students to the city—to make sure that skilled and experienced talent is available to London’s manufacturing employers.

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The London region welcomes foreign direct investment and it serves as an attractive destination for foreign companies that are looking to set up large-scale facilities in North America. London’s location on Highway 401, the availability of serviced industrial land, and its access to two of the world’s largest freshwater sources—Lake Erie and Lake Huron—make it a great location to invest in manufacturing, and food processing specifically.


Canada’s Attractiveness to FDI 

In my view, Canada enjoys a very solid reputation around the world. We are considered to be a friendly nation, and a country that has a stable political, economic and financial landscape. These are things that make Canada attractive for not only corporate investors that are looking to set up new facilities or offices, but also to talented individuals globally that are looking to relocate to a safe and stable environment that Canada offers.  

I also find that Canadians are known to be a diverse group, we welcome people from all over the world with a diverse range of skills, educations and background, and this is truly something that makes Canada stand out globally in terms of our competitiveness to attract skilled immigrants from all over the world. 


London’s Economy and Business Ecosystem  

London is one of the leading midsized cities in Canada. It really is unique in the sense that it offers a very high degree of diversity of industries, occupations and opportunities. We have a very strong manufacturing sector. Within the manufacturing environment we are known for defense, aerospace, food and beverage processing, automation, advanced manufacturing applications within automotive industries and so on. 

A lot of people know London because of our post-secondary institutions. We are home to Western University and Fanshawe College, which are some of the largest institutions in all of Canada for post-secondary education, and because of this strength in higher education, we attract well over 60,000 students to London every year. This adds to the vitality and vibrancy of our community, our downtown, our arts, culture and recreation scene and so on.  

“We attract well over 60,000 students to London every year.”

Over the last 10 years or so, London digital, creative and life sciences industries have thrived as well, as we have attracted and grown a lot of technology companies and companies that are leading in medical devices, imaging and pharmaceuticals. 


The Evolution of London’s Manufacturing Industry  

Manufacturing continues to be very important in Southwestern Ontario. As you know, we are located along the 401 corridor, which is one of the busiest trade corridors in North America—so a lot of movement of goods happens in our neck of the woods.  

The manufacturing sector supports automation, advanced manufacturing operations in the automotive industry, and other transportation goods related to manufacturing—in food and beverage, building products manufacturing and the construction industry —are manufactured in this region as well. These go along with a growing trend towards Industrial Internet of Things (IIoT), so this includes automation, systems integration, robotics and sensor development to make sure advanced manufacturing applications are all connected.  

There is a growing industry trend around “cobots,” or collaborative robots, that are being deployed in the region as well. We have a lot of companies here that have capability around automation and systems integration for manufacturing. 

“There is a growing industry trend around “cobots,” or collaborative robots, that are being deployed in the region.”

Food and beverage processing is a very significant part of what we do. We sit in some of the richest agricultural lands in all of Canada, so a lot of primary crop production and animal production happens in the region around London. But because London is the urban centre in Southwestern Ontario, we attract a lot of food processing companies that are able tap into the raw materials supply in the region as well as benefit from the Highway 401 corridor to get their goods out to the marketplace very quickly.  

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The Fundamentals Underpinning London’s Manufacturing Industry  

Regardless of what industry we look at, whether it is manufacturing, food and beverage, or others, in our view, there are three components that are very critical.  One is infrastructure. What do we mean by infrastructure? We have to have the right industrial lands, the right servicing within those parts, the right access to water, sewerage treatment facilities, natural gas, electricity—all of those things that are vital for any operation to succeed.  

London invests heavily in all of that infrastructure, this includes highway access, high capacity servicing to our industrial parks, and municipal investment in our own industrial lands, to buy and service industrial properties.  

London being the only community that draws its freshwater supply from two of the world’s largest sources of freshwater, Lake Erie and Lake Huron, is very important to food companies because you want to be assured as a food manufacturer that you have a reliable and uninterrupted supply of fresh, quality drinking water coming in at all times. This is even more important for beverage processing companies that use water as an ingredient in what they are looking to do. That is about infrastructure. 

“London being the only community that draws its freshwater supply from two of the world’s largest sources of freshwater, Lake Erie and Lake Huron, is very important to food companies.”

The second component that we consider very important to all of these industries is workforce. We have to have the right supply of talented individuals ready to work in these environments—whether  it is food or automation or robotics or auto parts manufacturing—we have to have the right mix of skills that can be deployed in those areas. This is where we have done a lot of work with both Western University and Fanshawe College to have the right training programs in place as well as the right conduits into industry. It is not just good enough to have the academic training, we need to have the experiential learning, those pathways that lead students into meaningful employment and entrepreneurship opportunities upon graduation.  

“We have to have the right supply of talented individuals ready to work in these environments—whether  it is food or automation or robotics or auto parts manufacturing.”

LEDC serves as that conduit, as that bridge between industry and academia, where we are able to take professors, chairs, deans and senior leadership at both Western and Fanshawe into industrial settings to understand the needs of employers to make sure that the talent pool that is created in London exceeds the needs of employers.  

There is never a start or a stop to this process. As you can imagine, the needs of employers are constantly changing, which means we need to constantly adapt and improvise at the post-secondary level to ensure that that talent pool has a very receptive home when they graduate—so a lot of work in workforce development. 

By the way, let’s not get fixated on post-secondary education. We are doing a lot of work to attract skilled immigrants to London as well, because not all of these open positions can be filled with post-secondary graduates. Some require project management expertise and experience in a real world setting of five or 10 years.  That is where we are doing a lot work to attract those skilled individuals to London. 

The third piece I want to talk about is a support ecosystem. Just because we have the infrastructure and the workforce, that does not round off the picture very well. We need to have a support ecosystem in place as well. So, what does this mean? A support ecosystem ensures that we have suppliers that are ready to work with these companies as well. If you are a food processing company, you would want to know that there are suppliers of logistics, automation, equipment, material handling—all these different things are required to sustain the organization.  

Again, this goes across the board in manufacturing, food processing and other environments. We work with a lot of companies that are in the support ecosystem to ensure that the entire sector is served very well. 


Significant Foreign Investors in London  

Before I give you examples, one of the things that we are very proud of in London is our success in attracting companies that have set up their first facility in all of North America or Canada. For example, Dr. Oetker was shipping frozen pizzas from Germany. They had a lot of choices for their first production facility—they could have gone to the US, Mexico or Canada. When they narrowed their search down to Canada, they could have set up a pizza production facility anywhere. For us to compete at that level, it is very important to know some of these variables that are in play. 

There is another great example of Maple Leaf Foods, which is setting up the largest chicken processing facility in all of Canada that is coming to London. That facility is actually underway right now, it is being built. They bought 100 acres of land from the City of London to build this state-of-the-art production facility for chicken protein, and this is going to be a substantial investment of close to $700 million. This will create over 1,600 new jobs when it is operational in about two years. 

Those two examples are within the food industry, but I can name a few other leading companies that chose London for their first facility in all of North America. Starlim-Sterner is a company that is out of Austria that invested in a new facility to produce silicone injection molded products for healthcare and automotive industries. They are a very successful company and have grown rapidly over the last 10 to 12 years that they have been in London, they have grown their plant by double. They have expanded significantly and continue to hire more people.  

Hyundai L&C is another leading company out of Korea, they make solid surface products that are distributed through Home DepotIKEA and a lot of other companies. They are in the construction business and the industry that serves homeowners and commercial construction projects. 

Some of these examples were of facilities where they had a lot of choices, they could have gone anywhere. In their choice to come to Canada, Ontario and then London, Ontario, there are a lot of unique things there that we can talk about. 

“Over COVID-19, there were a number of food companies that experienced significant growth.”

Over COVID-19, there were a number of food companies that experienced significant growth. Nestlé is one example, which produces ice cream products like Häagen-Dazs and others. London’s food sector continues to thrive, this is something that we are looking to double down on going forward. There are initiatives underway such as the Western Fair in London, which is creating an incubation and food acceleration environment to help young companies grow to the next level. One example is Nuts for Cheese, and we have dozens of others in that space, so over COVID-19, a lot of growth within the food space in London. 


The Value for FDI for Canada’s Economy and Cities Like London  

Historically, Canada’s economy has grown based on foreign direct investment activity. We are a nation that attracts new investments based on the strengths that we have talked about throughout this session. The London area is very similar in that regard.  

Over the last 10 to 15 years, if we look at the volume of investments that have happened here from overseas investors, these investors have found the confidence in our market to invest in large-scale facilities. These are not facilities that are here to serve a short-term contract. They have made strategic investments because their location in London serves as a gateway for them to North America, where they are looking to cover a much bigger market from the London facility.  

That is something that we have to be open to receiving going forward as well because that is the way to keep growing.  

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Kapil Lakhotia_London Manufacturing
Kapil Lakhotia
President & CEO - London Economic Development Corporation

Bio: An Economist by training, Kapil Lakhotia is the President & CEO of the LEDC. Under his direction, LEDC has implemented a bold new strategic plan with a strong focus on workforce development, entrepreneurship, and partnerships that drive London forward. Kapil’s efforts have resulted in significant new investments and job creation through the attraction of well-known businesses, including Maple Leaf Foods, Dr. Oetker, Arvin Sango, Original Cakerie, and Natra.

 

Organization Profile: The London Economic Development Corporation (LEDC) is the lead economic development agency in London, Canada. The LEDC works with business, government and community partners to attract new businesses investment, develop a connective and supportive business climate, and grow London’s talented workforce.