Mississauga, Ont.— Ferrero Canada’s state-of-the-art manufacturing plant in Brantford, Ont. is known for producing some world-renowned brands—TicTac, Rocher and Nutella.
But the facility is also testament to the business advantages of locating production in Canada—despite the siren song of seemingly cheaper locations to the south.
In fact, the Italian company looked at other North American locations when searching for a suitable site to manufacture products closer to its US and Canadian consumers.
Prior to the mid 2000s, it was shipping product into the US and Canada from Brazil and Italy, and hibernating it in distribution facilities due to seasonality.
“This was expensive and inefficient and ultimately, was not delivering the best consumer experience,” said Allan Cosman, vice-president of Ferrero International and president and CEO of Ferrero Canada Ltd.
Cosman was speaking as a lunch keynote at the 2014 Manufacturing Canada conference, held May 8 in Mississauga, Ont. He told the story of how the Ferrero family chose Brantford for the new plant—and how the decision is paying off.
“There was excellent access by rail or truck to the US and also Mexico, excellent cost efficiencies and finally, close access to a large Ontario infrastructure, including world-class capability to source raw material,” said Cosman.
The 1.6 million square-foot NAFTA facility opened in 2006, and has 950,000 square-feet of manufacturing space and a distribution centre. More than $450 million has been invested in the plant, Cosman said.
The site location exercise went far beyond labour rates and real estate costs to sweep in issues around quality of life, personal tax rates, crime statistics, education and human resources—crucial issues for ex-patriot members relocating from Italy.
“Several third-party studies reinforced the quality of life for employees as amongst the highest worldwide,” Cosman added.
View video of Allan Cosman’s presentation:
The Greater Toronto Area offers access to more than 140 million consumers in less than a day’s drive, he said, and is close to key US markets.
He outlined how in two short years, the plant grew from a single-shift operation to three shifts. The employee base expanded from 500 to 1,200 and Canadian volumes of Ferrero products more than doubled.
In other words, “Canada is a fantastic location to springboard business development,” he concluded.
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