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Vijai Lakshmikanthan
Vijai Lakshmikanthan
CEO - Starlim North America Corporation
Part of the Spotlight on London Manufacturing

London Manufacturing Through COVID-19 and Beyond

Takeaways

  1. One of London’s biggest advantages for manufacturers is its location along the 401 corridor, which provides access to the entire North American market within a two-day drive.
  2. London has an ample amount of skilled labour, which is the number one concern among manufacturers looking to invest in a new jurisdiction.
  3. The Government of Canada demonstrated strong leadership and provided quick and necessary support to the manufacturing sector during COVID-19.

Action

Technology transfer and adoption as well as training and development are critical to the future of the manufacturing sector. The government should broaden its requisite criteria for support of manufacturing companies to include these two areas in order to strengthen Canada’s manufacturing competitiveness.


Overview of London’s Business Ecosystem  

Southwestern Ontario offers to us many advantages, especially if you are a manufacturer, but other companies as well. First, the access to the full North American market within a two-day drive. And so, we have access to—in particular for us manufacturers—the US market, Mexico. For us, we can get to Utah in a couple of days.  Access through an open border is certainly one of the most important things for us as manufacturers and a competitive advantage for being located along the 401 corridor. 

“Access through an open border is certainly one of the most important things for us as manufacturers.”

From a business cost standpoint, if you look at smaller communities, versus midsized, versus large communities, [with] small communities to midsized communities, there is not going to be a lot of difference in terms of the cost of doing business. The reason for that is you can pick up industrial land probably a little bit less expensive in a smaller community than a midsized community, but then you have to consider other factors like access to labor; access to the amenities you need for education [and] training; healthcare services; quality of life. All of those things certainly play a role in your decision, and so there is not a lot of difference. Small to medium-sized communities offer a lot of the same advantages. 

I think being located in London certainly comes with a number of advantages. One of the ones that we talk about a lot is the quality of life. You hear a lot about the commute time—when you get into the major cities you have a very long commute time—in London you can get across the city in 20 to 25 minutes, and so that is certainly an advantage for you. Also, the access to the educational institutions, we have got one of the largest educational institutions in the country, Western University, along with a great college that we use and a lot of manufacturing companies use for training and development, that is Fanshawe College.  

“When you get into the major cities you have a very long commute time—in London you can get across the city in 20 to 25 minutes.”

So there are a number of advantages of being located in this particular region, including access to an ample amount of labour. [That] is probably, I would argue among manufacturing companies at least, is the number one concern or issue that you have when you are setting up a location in any particular jurisdiction. 

I think the other thing that we have certainly is a very supportive community. Organizations like the London Chamber of Commerce that put businesses together, network businesses together. We have the London Economic Development Corporation (LEDC) that does a tremendous job in attracting new businesses to the community, like-minded businesses to the community, as well as supporting the existing businesses that are here to help them grow.  

Then of course, very important in any community but especially in our city, London, we have a municipality that encourages job growth and supports job growth. They have a very business-minded organization, and they have the people in the right places to help businesses. So if you are thinking about expansion, or if you are thinking about setting up your shop on a piece of industrial land, you are talking to business people about business issues, and they are able to cut through some of the red tape that you need in order to get things going. That is certainly an advantage that we draw upon here and that is present in certainly a lot of Canadian cities, a lot of municipalities in Ontario, but certainly in London and in our region. 


Government’s Roll-Out of Business Support Through COVID-19  

The federal government absolutely responded correctly by supporting us through various programs that were administered by the Crown corporations, Export Development Canada (EDC) [and] Business Development Bank of Canada (BDC), to push money out into the economy through the various programs to get in the hands of companies that need it.  

They also engaged the national banks, which are an important source of financing for the majority of companies—whether it be operating line or term loans—and they provided a backstop to those financing organizations. Then on the individual level with the Canada Emergency Response Benefit (CERB) and other things, they continue to be viewed as stepping up to the plate when we need it. I think the federal government did incredible. 

The provincial government [is] the same. What I was certainly impressed with was—and if you compare ourselves to other jurisdictions—we really provided an update to the people every day, talking about what is going to happen with schools; talking about what is going to happen with businesses; talking about a re-opening plan. This idea of a staged re-opening now, a lot of people probably in the beginning did not like it, but it is about the public good. We see in other places where the public good is not viewed perhaps as important, we see what happens.  

So, the provincial government in my view did an incredible job of staging our re-opening to ensure that public safety was number one and we move into the new normal in a more organized fashion, and so that was also really good to see.  

I receive calls from the provincial ministry; individuals from the Ministry of Economic Development asking, how are things going? Is there anything we can do for you? Folks from the Industrial Research Assistance Program (IRAP)—folks that represent the Canadian government—[calling] to find out if there is anything [they] can do. How are you coping with what is going on? Not only did I get the phone call, I am sure that numerous other businesses in our region, in our province got the same phone call. 

I think they responded really well to what was going on and look, as I said, no one saw this coming and so they put in place programs in a very short period of time, which I thought was really incredible. 


Manufacturer’s Response to the Crisis  

The other thing I was really impressed with is when the Canadian government and the provincial government made a call out to companies, asking for their support—whether it be in the production of ventilators or the production of masks or the various personal protective equipment (PPE) that was needed to support the hospitals—manufacturing companies stepped up to the plate, which is incredible to see. It reminds us of the importance of our manufacturing industry—to have localized manufacturing is so important to our country, to a province, to our city. 


Government Support for the Manufacturing Industry Going Forward  

Pre-COVID, the government of course had programs to help companies expand and grow in the province and the country. I think those programs had traditionally been focused on job growth, so if you wanted to access those programs the most important question that you would have to answer is how many jobs are you going to add? Because that is always the very political and sexy thing to see.  

“The investment that certain companies make in training in development, that is important to the local economy.”

I think moving to the new normal, getting out, in order for us to emerge out of this COVID-19 pandemic period stronger, we would probably have to change our focus a little bit and support companies on a broader range of criteria—for example, a technology transfer. We have to do a better job of recognizing that bringing technology into the country can do a wealth of good just as much as job growth, both are important.  

You could talk about things like training and development, is another example. The investment that certain companies make in training in development, that is important to the local economy. We are not looking just at one set of criteria for evaluating whether companies receive funds; we just broaden our perspective a little bit. Loosening those criteria and getting them focused in certain areas I think is certainly going to help the federal government or provincial government to get programs out there to help our companies get to the new normal.  


Canadian Innovation in Manufacturing  

Currently [in] Canada, the government plays a significant role in promoting innovation in the private sector; programs like the Accelerated Investment Incentive program or the Scientific Research and Experimental Development (SR&ED) program. It creates an environment where businesses can innovate without the detriment to the existing operations, and I think that is certainly an area where the Canadian government can put more emphasis. 

The other area where I think the government is keenly involved is in our educational institutions. [There] is the Canadian Centre for Product Validation (CCPV), which is an industry collaborative organization that works with industry and Fanshawe College to help companies validate their products and get their products to market quicker—so that is another example.  

I mean there are numerous examples of the government working at the University of Waterloo in 3D printing or robotics that we can talk about, it is just a very important investment that speaks to innovation, that speaks to what the federal government can do to help us move forward in the manufacturing industry but also other industries. 

“I have seen a lot of growth in companies out there whose mission is to support the manufacturing sector.”

The other thing is—over the last three years especially—I have seen a lot of growth in companies out there whose mission is to support the manufacturing sector by improving their operational efficiencies through the deployment of connected plant floor technologies. I am thinking in particular, there are a couple of companies down the road, Armo Tool, FreePoint Technologies, even our original equipment manufacturers (OEMs), they are making their machines much smarter than they were just three years ago.  

I think the other thing we have to consider is that this makes Canada [and] Ontario a great playground for testing these technologies because we have such a great diversity in companies here.  

“In Ontario you have automotive transportation industries, so that serves as a playground for testing some of these new technologies, whether it is robotics, whether it is automation.”

If you go out West, you can find timber processing companies that is part of the playground; if you go to Alberta, you are going to see structural metal manufacturing or the oil and gas industry, which serves as playground for implementing these technologies. And of course, in Ontario you have automotive transportation industries, so that serves as a playground for testing some of these new technologies, whether it is robotics, whether it is automation. That is of course helped by the fact that the federal government has incentives to promote playing in these playgrounds—it is very important to the entire industry and it fits really well together.

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Vijai Lakshmikanthan
Vijai Lakshmikanthan
CEO - Starlim North America Corporation

Bio: Vijai Lakshmikanthan is the CEO of Starlim North America. He previously worked as the Manager of Business Development for the London Economic Development Corporation and former President of the London Chamber of Commerce. He holds a master’s degree in Economic Development from the University of Waterloo. 

 

Organization Profile: Starlim North America is a global leader in the manufacturing of silicone parts specializing in custom Liquid Silicone Rubber moulding for health care and automotive industries. Starlim North America is a subsidiary of Starlim-Sterner, a global manufacturing company headquartered in Austria.