CONTENTS
16
COVER STORY
Eyes in the Sky
Provincial Aerospace Ltd. is helping to keep
Caribbean waters calm, even in hurricane season.
10
SPECIAL FEATURE
4
In Good Company
After a decade as an oil producer,
Newfoundland and Labrador is firmly
established as a steady and reliable business
location for those who harvest the North Atlantic
for the riches of its geology.
PETROLEUM INDUSTRY
7
13
The Hibernia Effect
A coming-of-age story about how
Newfoundland and Labrador’s local service and
supply sector, spurred by the initial Hibernia
discovery, has transformed itself into a centre
for international business opportunities.
REGIONAL PROFILE
10 Go West…
to Western Newfoundland that is - the economic
landscape is changing in this region of the
province.
25
AGRI-FOODS
13 Swiss Cheese Please
PROFILE
20 Pilot Training
Internationally-renowned flight school becomes
a destination of choice for foreign students.
INVESTMENT
22 Angel Investors
Bridging the Gap
Innovative Newfoundland and Labrador
companies are receiving capital from private
sector investors.
MINING
25 Mining Companies Digging In
Mineral shipments are breaking records as
demand for the provinces underground riches
grows.
EXPORTING
29 Fish Processors Going Upscale
New gourmet seafood companies are
successfully filling a niche for people with
little time to cook.
The rapidly growing dairy industry in
Newfoundland and Labrador is in a period of
expansion, innovation and opportunity.
BUSINESS MAGAZINE
VISION NEWFOUNDLAND AND LABRADOR
is a publication of the Government of Newfoundland and Labrador. To request a copy,
please contact: Department of Innovation,Trade and Rural Development
P.O. Box 8700, St. John’s, NL A1B 4J6
Toll-free: 1.800.563.2299 | Tel: 709.729.7000 | Fax: 709.729.3208 | E-mail: vision@gov.nl.ca
No part of this magazine may be reproduced without written permission from the department.
3
SPECIAL FEATURE
In Good Company
After a decade as an oil producer, Newfoundland and Labrador is firmly established as a steady and
reliable business location for those who harvest the North Atlantic for the riches of its geology.
our of the 15 largest oil discoveries non oil-sands - in North America, in
the last 30 years, were on the Grand
Banks of Newfoundland and Labrador.
Over the past decade, three of those fields
began operating - Hibernia in 1997; Terra
Nova in 2002; and White Rose in 2005. In
many ways, these projects mark only the
beginning of the industry in the province.
At more than 400,000 barrels of oil per
day (bopd) combined, production from
Newfoundland and Labrador’s producing
oil fields accounted for 42 per cent of
Canada’s conventional light crude in 2007.
While natural decline is imminent in all producing oilfields, there is excellent potential
for even greater oil and gas discoveries
around the province, including the Grand
Banks, the Labrador offshore, deepwater
regions such as the Orphan and Laurentian
Basins, as well as onshore and offshore
western Newfoundland.
“We have tremendous potential in offshore oil and gas,” says the Honourable
Kathy Dunderdale, the province’s Minister
of Natural Resources. To date, 2.7 billion
F
4
barrels of oil and 10 trillion cubic feet (tcf)
of natural gas have been discovered in offshore Newfoundland and Labrador.
Geoscientific data suggests another six billion barrels of oil and 60 tcf of natural gas
have yet to be discovered.
The next major development will likely
be the Hebron project, which is estimated to
contain in excess of 700 million barrels of
oil. In 2007, the province signed a
Memorandum of Understanding with a
Chevron Canada-led group of partners to
develop the Hebron project. Both sides are
continuing to work towards reaching a final
agreement.
Filling the production gap between the
decline of mature wells and new fields coming on-stream, are a series of significant
satellite pools adjacent to existing producers. For example, Husky Energy recently
announced plans to expand its White Rose
project. The plans include the southern
White Rose extension, which contains an
estimated 20-25 million barrels of recoverable oil. The plans also propose developing
an estimated 70 million barrels from the
North Amethyst project, a subsea satellite
that would connect to existing White Rose
infrastructure. In addition, Husky continues
to assess development opportunities in the
West White Rose pool.
A mature service and supply industry
In the decade that ended in 2006, oil and
gas accounted for more than half of the
province’s 50 per cent rise in GDP. Data
from the Canada-Newfoundland and
Labrador Offshore Petroleum Board, the
province’s offshore regulator, indicates that
total investment in the industry to date
exceeds $21 billion, including $4.8 billion
on exploration.
This activity attracts major international
service and supply companies such as
Halliburton, Schlumberger, and Baker
Hughes. It also fosters the growth of homegrown supply and service expertise.
“Today, we have world-class oil and gas
service in this province and we are working
around the globe.” says Minister
Dunderdale. “Even the international players
VISION NEWFOUNDLAND AND LABRADOR
who located here are now using the
province as a base to service international
clients.”
The C-NLOPB reports that, in 2007, estimated total production reached 134.5 million barrels. The value of that production
was approximately $9.7 billion, based on
the average price of West Texas
Intermediate crude during the year.
The province’s offshore oil and gas
resources are not only generating financial
benefits, they are also generating important
employment for the people of the province.
Currently, the industry directly employs
approximately 3,000 people.
Another important feature of the supply
and service industry is the transshipment
facility at Arnolds Cove in Placentia Bay.
Construction began in 1996 with three
500,000-barrel tanks, a loading platform
and associated piping to accept Hibernia
crude. Two more tanks and a second loading platform were constructed in 1999 to
accommodate oil from the Terra Nova project. A sixth tank added in 2002 increased
total installed storage capacity to three million barrels.
Seismic matters
With six billion barrels of oil and over 60 tcf
of gas still undiscovered, exploration will
likely continue to lead to new commercial
finds. The major players know this, and
they are investing in an ongoing cycle of
seismic acquisition and exploratory and
delineation drilling.
According to the C-NLOPB, exploration
over the past decade has mapped 1.3 million
common mid-point kilometres of 3-D data
and 643,000 kilometres of 2-D data on the
province’s offshore.
Data collection also continues farther
north in the Labrador offshore, where seismic data has been collected every year since
2002. New surveys are planned to 2010. In
addition, 2007 saw the first Call for Bids for
offshore Labrador since the current land
sale system came into effect with the implementation of the Atlantic Accord. The land
sale closes this year.
Recent seismic mapping and strong land
sales in the Orphan Basin and seismic exploration in the Laurentian Basin demonstrate
there are large undrilled features remaining
to be explored.
Drilling holes in the records
The province is also home to some impressive records that demonstrate the level of
expertise and technical know-how of the
local industry and the people who work
here.
Since 1998, the Hibernia drilling team
VISION NEWFOUNDLAND AND LABRADOR
TOP: Oceans Ltd. has conducted a variety of research activities which include oceanographic data collection and analysis
of waves, currents and ocean circulation and studies of vibration characteristics of ships. ABOVE: The full mission ship bridge
simulator at Memorial University’s Marine Institute offers full motion articulation with 360 degrees visual screen.
has continued to break its own records for
directional drilling. The team set a world
record in 2004 when well B-16 36 struck
the Hibernia Sands more than seven kilometres away from the platform at a depth of
3,960 metres.
In August of 2006, the crew of the drill
rig Eirik Raude set a new Canadian record
for deep water drilling on an exploratory
well in the Orphan Basin when Chevron and
its partners spudded the Great Barasway F66 well. Since then, the company has continued to show confidence in the prospect by
conducting electromagnetic resistivity surveys, the first in Canadian history. These
surveys, along with seismic imaging, are
modern tools used in deep water exploration. Additional drilling in the basin is
being planned for 2009, pending regulatory
approvals and rig availability.
Companies have committed $819 million
in exploration spending by January 2012.
Some companies have already announced
details of exciting new exploration drilling
programs for the next two to three years.
In March 2008, StatoilHydro announced
that the semi-submersible drill rig Henry
Goodrich would be heading back to the
Grand Banks from its current assignment in
the Gulf of Mexico. StatoilHydro reached a
rig sharing agreement with Husky Energy
and its White Rose partner, Petro-Canada,
to share the rig for 24 to 30 months beginning in the summer of 2008.
“Securing this rig gives Husky the flexibility to advance the White Rose subsea
tieback program and drill some exciting
exploration prospects in the Jeanne d'Arc
Basin,” said Husky Energy president and
CEO John Lau in a news release. “We have
5
Madill, told senior industry executives
about CNA’s success in building a skilled
workforce. In the past two years, enrolment
has increased significantly in programs
related to oil and gas. Madill said the college has been working very closely with the
industrial advisory committee to keep the
college up to date and meet evolving national training standards.
Building a legacy
In March 2008, Husky president and CEO John Lau announced that the semi-submersible rig Henry Goodrich is headed back to
the Grand Banks.
confidence in this region,” said Lau.
Husky is also partnering with
StatoilHydro later in 2008 to drill an exploration well in the deep waters of the Flemish
Pass Basin.
“Securing additional drilling capacity for
the region will open possibilities for all companies to invest in future offshore development,” said the head of StatoilHydro's
Canadian offshore business, Johan
Mikkelsen in a company-issued statement.
Juniors play for keeps
on the west coast
When a flare from the Garden Hill drill rig
lit up the sky in 1995, on the south-western
shore of the Port-au-Port Peninsula, it reignited interest in the west coast of
Newfoundland. There are over one million
hectares under exploration licenses in the
offshore. Onshore, more than a quarter-million hectares are under license with a total
of 25 wells spudded since 1994.
In March 2008, Shoal Point Energy spudded the most recent onshore to offshore
exploration well, 2K-39. The company estimated the drilling would take between 75
and 90 days. The planned total drilled
depth of the well was 4,040 m (2,700 m
total vertical depth). “It’s a very exciting
play,” said Shoal Point Energy president
George Langdon.
Tekoil & Gas Corporation is also planning to drill an onshore to offshore well this
6
year. Tekoil CEO, Mark Western, said in a
news release, the company’s activity on the
west coast is a milestone in the young company’s history. “Exploration in western
Newfoundland has been a goal since our
inception, and we’ve finally made it.”
In the know
Memorial University has positioned itself as
an international centre of expertise for oil
and gas. The university will have raised
more than $88 million by 2010 for oil and
gas research, programs and new facilities
such as the harsh-environment bridge simulator and the Landmark Graphics visualization laboratory.
The university has established 19 new oil
and gas-related faculty positions. One of
these positions is the $2.5 million endowed
Husky Energy Chair in Oil and Gas
Research.
At the local centres of excellence, such as
the Centre for Marine Simulation and the
Offshore Safety and Survival Centre, the
School of Maritime Studies provides support for researchers to pursue applied
research, technology transfer and industrial
response training. For students, the school
offers unique programming, developed over
the past decade, for marine transportation
and offshore oil and gas industries.
During her address to the College of the
North Atlantic’s (CNA) Oil and Gas Forum
in February 2008, college President Jean
As laid out in Focusing Our Energy,
Newfoundland and Labrador’s first comprehensive Energy Plan, the province’s approach
to the oil and gas sector has undergone a fundamental shift. The plan explains that before
the shift, the province concentrated on benefits from three of four available levers: fiscal
regimes; regulations and land management;
and local benefits. The Provincial
Government will now implement a fourth
lever - equity ownership - which will provide
the people of the province with an additional
source of revenue and ensure better alignment between the interests of the province
and those of the project partners.
Increasing petroleum production is significant, as it currently generates 30 per cent of
provincial revenues and will provide revenues
to meet another Energy Plan goal - investing
in a renewable future. According to the
Provincial Government’s Energy Plan, the
total net oil revenues, up to end of 2006, was
$18 billion. Of that amount, $10 billion went
to companies, $2 billion went to
Newfoundland and Labrador and $6 billion
went to the rest of Canada.
Through the province’s newly-created
crown energy corporation, the province will
partner with the private sector on future
developments. The province has already
negotiated a 5.0 per cent equity position on
Husky’s White Rose expansion and a 4.9 per
cent position on the Hebron project.
Focusing Our Energy was developed in
consultation with a wide variety of stakeholders and provides a clear course for the
development and management of the
province’s energy resources for the next three
decades. In a press release responding to the
Energy Plan, Newfoundland and Labrador
Oil and Gas Industries (NOIA) President and
CEO Bob Cadigan said that the key concerns
of the association had been addressed.
The province offers resource potential;
world-class construction, fabrication,
research and development infrastructure;
leaders in supply and service support; and a
highly-skilled and experienced workforce.
“NOIA believes investors will look at
Newfoundland and Labrador’s petroleum
industry as an attractive total value proposition,” said Cadigan.
VISION NEWFOUNDLAND AND LABRADOR
PETROLEUM INDUSTRY
The Hibernia Effect
A coming-of-age story about how Newfoundland and Labrador’s local service and supply sector,
spurred by the initial Hibernia discovery, has transformed itself into a centre for international
business opportunities.
ong before the White Rose field’s
110,000-plus barrels of oil per day came
on stream, before the Terra Nova
project’s Floating Production, Storage and
Offloading (FPSO) vessel made harsh
environment history, even pre-Hibernia (the
project that spawned the exploration boom
of the early 1980s in the Newfoundland
and Labrador offshore), there were six
individuals casting their entrepreneurial eye
towards assorted ocean industries: Anthony
Barklay, Rick Emberley, Harry Pride, Harvey
Riche, Al Sutherland and John Weston.
L
VISION NEWFOUNDLAND AND LABRADOR
Led by Emberley, who originated the idea,
they formed the Newfoundland Ocean
Industries Association, otherwise known as
NOIA, in 1977. Harvey Riche was the
organization’s first president and Pride was
its first secretary.
As optimistic as they were, Pride says that
they were also very realistic about the
challenges that faced the fledgling industry.
“In the ‘70s, Canada’s east coast did not have
the infrastructure needed to support the
imminent oil and gas development,” says
Pride. The environment was also a challenge
with its cold ocean, strong winds and annual
pack ice and icebergs. With the challenges,
however, came the promise of great rewards.
An industry is born
Chevron’s discovery of the Hibernia oil field
in 1979 was the first fulfilment of that
promise. In-province construction of the
Hibernia gravity-based production platform
and fabrication of topsides injected $2.5
billion into the province’s economy and
supplied 21,000 person years of work for the
7
C-CORE applies geotechnical centrifuge testing to offshore systems including
offshore production platforms and their mooring systems, pipelines, and
onshore structures such as dams, pipelines, mines and large buildings.
provincial labour force. At the time, it
was the largest construction site in
North America and employed 6,100
Newfoundlanders and Labradorians during
peak employment. These types of local or
industrial benefits continue to be key
elements of the province’s efforts to achieve
full benefits from its energy resources.
The Hibernia discovery also encouraged
other international players to explore in the
Newfoundland and Labrador offshore,
providing
lucrative
local
contract
opportunities.
In a 1997 interview with Atlantic Business
Magazine, independent socio-economic
consultant Mark Shrimpton said that the
information technology sector in the
province had experienced accelerated growth
thanks to the Hibernia influence.
“Technology was introduced… about five,
and perhaps even 10 years earlier than it
might otherwise have been,” he told the
magazine.
Other Hibernia effects included the
development of offshore policies and
procedures by the Canada-Newfoundland
and Labrador Offshore Petroleum Board for
Hibernia and subsequent projects; the 2,560
hectare Bull Arm Fabrication Site on the
western side of Trinity Bay; and,
Newfoundland Transshipment Limited in
Placentia Bay - one of the largest and deepest
navigable bays in the world.
8
From toddler to adolescent
Hibernia was followed by Terra Nova,
which produced first oil in 2002. White
Rose started production in 2005, and a
Memorandum of Understanding was signed
in 2007 by the Government of
Newfoundland and Labrador and industry
partners to develop the Hebron – Ben Nevis
(Hebron) oil field.
Throughout this oil development era, the
province’s service and supply sector,
secondary education and research facilities
and capabilities have all experienced
impressive growth. Memorial University,
for instance, is supporting world-class,
petroleum-related
research
and
development through its Oil and Gas
Development Partnership (OGDP) and
Centre for Cold Ocean Resources
Engineering (C-CORE). While the OGDP
focuses on oil and gas education, C-CORE
has helped the province and project
operators develop the technical expertise
that is essential in the Newfoundland and
Labrador offshore industry.
These efforts are further supported at
Memorial’s Fisheries and Marine Institute
where shuttle tanker crews are trained for
the weather extremes found on the Grand
Banks and offshore personnel receive their
offshore safety and survival education. The
College of the North Atlantic has also
responded to the industry’s needs by
A 1.2 million tonne offshore oil drilling and production
platform was built for the Hibernia oil field at the Bull
Arm Fabrication Site.
developing technology and trades programs
specifically designed for the petroleum
sector.
NOIA, too, has evolved from those early
pioneering days. Known today as the
Newfoundland and Labrador Oil and Gas
Industries Association, it has transformed
itself from a six-person organization to
become the largest oil and gas industry
association in Atlantic Canada, with more
than 450 active members from within the
region and around the world.
Each step forward has marked another
milestone in Newfoundland and Labrador’s
development as a petroleum producer. Each
step has also exposed local companies to
more global market opportunities and
international petroleum players. With that
exposure, local companies have realized
their capabilities are second to none, they
have gained confidence that they are worldclass competitors and they are taking
advantage of a world of opportunities.
Moving up on their own
When D.F. Barnes started out more than 70
years ago, it was a small “mom and pop”
operation on the St. John’s waterfront,
offering fabrication, machining and repair
services to the local marine industry. But
they were well positioned for new
opportunities that arose with the offshore
oil development. D.F. Barnes made the
VISION NEWFOUNDLAND AND LABRADOR
Employees raise the Pennecon Energy flag at the
Canadian Natural Resources Limited worksite in northern Alberta. Photo courtesy Pennecon Energy.
transition into the new sector, securing
service contracts for a number of drilling
rigs in the Newfoundland and Labrador
offshore, including the Henry Goodrich and
Rowan Gorilla VI.
Amy Warren, communications manager
with D.F. Barnes Group, says that experience
allowed D.F. Barnes to develop exportable
capabilities and grow to include 500
employees and five subsidiaries. In 2005, the
company formed Orphan Industries Limited,
which specializes in machining and
fabricating large-scale steel structures and
systems for export. Its offshore launch and
recovery systems for remotely operated
vehicles are installed in Singapore, Angola,
the North Sea, the Gulf of Mexico, as well as
in Newfoundland and Labrador.
Pennecon Energy, a subsidiary of
Pennecon Limited, is another case in point.
Don Noseworthy, senior vice-president,
Pennecon Limited, Energy Division, says the
company has been energized by the potential
of the oil and gas industry on the east coast
of Canada. “The key to our growth over the
last few years has been identifying market
needs - if the market demands it, then we
have the answer,” says Noseworthy.
Asked what it takes to compete for
business in the international oil and gas
market, Noseworthy says it comes down to
proving you can do high-quality work in a
cost-efficient manner. “We work hard on our
VISION NEWFOUNDLAND AND LABRADOR
internal controls and project management
systems to ensure that the work we complete
is on time, on budget, and the best quality
possible.”
John Henley agrees that performance is
key for any company hoping to build longterm relationships in the oil and gas sector.
Henley is vice-president, Offshore Services
and Development with GJ Cahill and
Company, an Atlantic Canadian industrial
contractor that has managed multiple oilrelated projects in Newfoundland and
Labrador. During a recent panel discussion,
Henley noted that the oil and gas industry
has very high standards for work practices,
environmental awareness and monitoring
procedures, quality assurance and process
controls. He said that while it can be
challenging to establish these standards,
once they are in place they can be transferred
or adapted to other industries and
jurisdictions. GJ Cahill, he pointed out, does
not restrict itself to a single region or
industry. It takes the lessons learned in its
Newfoundland and Labrador experience
and uses them to win contracts in Western
Canada.
Broadening horizons
GJ Cahill is not the only organization to
recognize the opportunity that Alberta
represents to Newfoundland and Labrador’s
service and supply sector. The Provincial
Government, too, has been eyeing its
western petroleum cousin with a view to
helping local companies spread their wings.
That is why it has taken an active interest in
three different trade shows.
At the National Buyer/Seller Forum in
Edmonton at the end of March 2008,
representatives from the provincial
department of Innovation, Trade and
Rural Development worked to identify
business opportunities and initiate
introductions for companies interested in
expanding into that market. Government
officials will also be on hand in June 2008
for Calgary’s Global Petroleum Show and
in Edmonton in September 2008 for the
Oil Sands Trade Show and Conference. In
each instance, they will be working to
match Newfoundland and Labrador
companies with opportunities in Alberta.
Energized by the impact of the
Hibernia oil field discovery and
development,
Newfoundland
and
Labrador’s petroleum expertise has
matured. From a handful of companies
and a fledgling association, it has
expanded to become the largest oil and
gas service and supply industry in
Atlantic Canada with joint venture
partnerships with some of the world’s
biggest players and contracts around the
globe.
9
REGIONAL PROFILE
Go West…
to Western Newfoundland that is - the economic
landscape is changing in this region of the province.
n March 17, 2008, a charter plane
with 300 people on-board departed
Ireland for Deer Lake Airport and 10
days in Western Newfoundland. On board
were not only tourists, but also entrepreneurs who have invested in real estate and
business ventures in the area. Interviewed
by CBC Radio prior to departure about
what could lure the Irish away from Ireland
on St. Patrick’s Day, a spokesperson said the
region is like Ireland only better. “The skiing
is great. They have great facilities and the
people are simply the best. We always have
a fantastic time while we are out there,” he
said, adding that this was his twelfth visit to
the region.
In fact, if a true measure of a region’s success is the desire of people to call it home,
then Western Newfoundland is up there
with the best of them. When people here say
“Go West,” they no longer mean Alberta, at
least not to live. “It’s a new phenomenon,”
says Shawn Woodford, chair of the Greater
Corner Brook Board of Trade. “People used
to go (to Alberta) for six to eight months or
for a year at a time to work. Now they’re
going two weeks on, two weeks back here.”
And all that new money is good for the local
O
10
economy.
The economy has been buoyant for the
last several years. Woodford says the optimism behind the development of places like
Humber Valley Resort and an unprecedented international presence in the area “has
changed our economic landscape - property
values have increased dramatically in the
last three to four years. Twelve to 14 new
resorts have sprung up, not just Humber
Valley, but locals and developers from overseas.” Local businesses in the supply and
service sector is booming. They are seeing
growth in Corner Brook, Pasadena and
Deer Lake. “We’ve got shopping districts,
hospitals, schools, a university and private
and public colleges. And people are retiring
and moving back home,” says Woodford.
The Deer Lake Airport is now the fourth
busiest in Atlantic Canada and plans are
well-advanced to lengthen the runways to
accommodate even larger aircraft.
The infrastructure for growth
One of the most significant signs of
readiness in the region is the increasing
capability of the ports. Big ships - Shawn
Corner Brook
Woodford can already see them steaming
into the Bay of Islands. He knows that
building the infrastructure to accommodate
larger container ships is just one piece of a
larger initiative.
In December 2007, a significant investment was made in the Port of Corner Brook
- the purchase of a $2 million crane - thanks
to collaboration between the Port
Corporation, the provincial department of
Innovation Trade and Rural Development
(INTRD),
the
Atlantic
Canada
Opportunities Agency (ACOA) and
Oceanex. The crane enables them to handle
large, ocean-going container ships.
“This is a major enhancement,” says
Woodford. “Oceanex anticipates they will
be able to bring in an extra run a week
because the crane is here.”
But Woodford’s vision for the Bay of
Islands, shared by many, goes much further.
He believes ports on Newfoundland’s west
coast are ready to take their place in a larger Gateway network that will transform
Atlantic Canada into an international shipping region. Says Woodford, with all the
ports working together, Corner Brook and
Stephenville are ready to help - “attract
VISION NEWFOUNDLAND AND LABRADOR
large container ships to the east coast of
Canada.”
As part of that readiness, Corner Brook is
seeking federal support. “A new dock will
increase capacity for on- and off-loading
and will open up markets for Corner Brook
Pulp and Paper.” The mill, which is a major
regional employer, would have improved
shipping access to international markets.
The Gateway concept is an important
regional initiative. Ongoing work involves
partnerships among the Board of Trade, the
City of Corner Brook, the Deer Lake
Airport Authority, INTRD, ACOA, the
Corner Brook Port Authority, Oceanex and
Corner Brook Pulp and Paper Ltd. This network has set their sights on Europe and
emerging markets like India to “have them
start shipping through the Atlantic Gateway
to North America,” says Woodford.
Gaining momentum
in Bay St. George
When it comes to an economic upswing, no
area is more prepared for growth than the
Bay St. George region. Its cohesiveness as a
community was tested in 2006 when the
largest employers in the region permanently
closed the pulp and paper mill in
Stephenville eliminating 300 positions. The
first response was one of concern, but the
people rallied together and, with the support of the Provincial Government, have
made significant improvements. That support is evident in long-term decisions which
placed the headquarters for the Provincial
Library and the College of the North
Atlantic in Stephenville.
In response to the shutdown, the Bay St.
George Community Development Committee
united the resources of the public and private
sectors to explore new opportunities and help
the community regain its momentum.
“Service sector and knowledge-based
employment is important to the region,” says
Shawn Tilley, the committee chair, “but they
are focusing on building the industrial base.”
The transfer of the mill site infrastructure to
Stephenville will help. In consultation with
potential users, the committee has identified
opportunities related to ongoing economic
activity in the region including: oil and gas
exploration and development; aerospace support for the Stephenville Airport; metal fabrication for export; ore processing; and opportunities in alternative energy. In fact, Tilley is
confident that the region will become, “a
leader in alternative energy production in the
province.”
Cynthia Downey echoes Tilley’s optimism. As president of the Bay St. George
Chamber of Commerce and vice-chair of the
VISION NEWFOUNDLAND AND LABRADOR
The recent purchase of a $2 million crane will increase capacity for on- and off-loading and will open up markets for Corner Brook
Pulp and Paper.
Long
Range
Regional
Economic
Development Board, she has a keen knowledge of the area’s potential. She points to
the Stephenville Airport as one regional
service that is ready to serve a broader commercial market. Once they expand the airport’s fuel holding capacity, she believes
they will “acquire domestic service to mainland locations.”
While attracting less attention, other sectors are growing in the region and there is a
strong movement to work co-operatively.
For example, the metal fabricators in the
region have formed a network to market
their services as a group to Alberta oil projects. The Roofed Accommodations
Network is promoting the area for tourism
and capitalizing on the benefits of working
together. Also, the local economic development board, encouraged by the solid yearover-year annual growth of a large dairy
farm in Bay St. George South, is bringing
local farmers together to market products as
a unified group.
Investing in the future:
education and research
Post-secondary institutions in the region
have adapted to meet the unique needs of
local businesses and industry.
At the College of the North Atlantic
(CNA) the Contract Training and
Continuing Education (CT&CE) division is
helping businesses and organizations stay
current with the demands of the market.
The division is working with a focus group
and a drilling and blasting company in the
Codroy Valley area to develop a new modularized training program for groundwater
drilling and geothermal heating - a first for
Atlantic Canada. The Corner Brook
Campus of CNA is also adopting the
Personal Care Attendant/Home Care
Worker training program that was piloted
successfully by the St. Anthony campus on
the Northern Peninsula. Many of its graduates found immediate local employment.
At the university level, Sir Wilfred
Grenfell College in Corner Brook is
advancing regionally focused research and
education. Dr. Holly Pike, acting principal
of Grenfell College, says that “knowledgebased industry growth, in particular,
depends on research activity that makes new
information and technologies available as
well as bringing external research funds into
the local economy.” Grenfell is fulfilling its
economic development mandate by fostering expertise through the new Canada
Research Chair in Ecological Economics
and through regional research facilities such
as the Centre of Environmental Excellence
and the Institute for Biodiversity and
Ecosystem Science.
11
Ready for growth
in the petroleum industry
TOP: In response to the pulp and paper mill shutdown in Stephenville, the Bay St. George Community Development Committee united the resources of the public and private sectors to explore new opportunities and help the community regain its momentum.
ABOVE: An aerial view of the Sir Wilfred Grenfell College Campus in Corner Brook.
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Perhaps the most anticipated economic
development in the region is the maturing
of the onshore/offshore oil and gas industry. They know the hydrocarbons are out
there - experts agree that all signs are positive. All they need now is for one of the
rigs to strike a gusher.
“It’s a very exciting time,” says Sharon
McLennon, co-chair of the Western
Newfoundland Oil and Gas Steering
Committee, an initiative of the Corner
Brook Board of Trade. Several junior oil
companies are conducting seismic work,
planning drilling programs, and drilling in
the area.
McLennon believes that the time is now
to develop the knowledge base, promote
the science and nurture relationships with
oil and gas developers.
“If people know the geology is good,
they will be more likely to invest,”
McLennon says. The committee is now
planning its third oil and gas symposium
for 2008. They are also consulting with
the community to draft a development
plan. McLennon says people and businesses in the region are actively engaged
to “determine what we need to do to prepare for (a significant discovery) and to
make the most of every opportunity.”
VISION NEWFOUNDLAND AND LABRADOR
AGRI-FOODS
Swiss Cheese Please
The rapidly growing dairy industry in Newfoundland and Labrador is in a period of expansion, innovation
and opportunity.
h i r t y - f i v e - y e a r- o l d Roger Ryan
from Trepassey, on Newfoundland’s
southern shore, spent three weeks this
past winter in Switzerland - not for the
skiing, but for the cheese. Ryan, an
employee of Central Dairies, was learning
the craft of cheese making from some of the
world’s best. His knowledge and skills will
be applied as the company adds a specialty
cheese plant to its operations, slated to
begin production in early summer.
Closer to Ryan’s home, in the farming
community of Kilbride outside of St. John’s,
the Walsh family have been farming for five
generations going back to the 1880s. The
family’s Glenview Farm has grown from 20
acres to 380 acres over the years. Today, the
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VISION NEWFOUNDLAND AND LABRADOR
farm includes a herd of 480 Holsteins,
numerous barns and an array of machinery
from rock pickers and ploughs to harvesters
and computerized identification milking
machines. Each cow has an individual
responder. As the cow enters the milking
barn, the computer identifies who she is and
how much milk she last gave. It even
measures how many steps she took that day
to flag any potential problems for the
farmer to investigate.
Newfoundland and Labrador’s dairy
industry has come a long way since the days
of the Walsh’s great grandparents. Today’s
modern industry is embracing technology
and is in a period of rapid expansion,
innovation and opportunity.
In fact, according to the Dairy Farmers of
Newfoundland and Labrador (DFNL) - the
provincial regulatory body - dairy farming is
the leading sector in the provincial agrifoods industry, valued at over $125 million
and employing directly and indirectly over
1,200 workers. With 40 producers in four
regions of the province (all on the island,
although a Labrador dairy feasibility study
is underway), Newfoundland and Labrador
has the largest average farm size in the
country with approximately 140 cows per
farm producing millions of litres of milk.
The milk is used for both fluid and
industrial processing, such as table milk or
cream in the case of fluid, or yogurt, butter
or cheese in the case of industrial. And, in
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1.
this high-tech dairy industry, there are two
components - the farming business and the
processing sector.
A new era in the provincial industry
began in the late 1990s. When the province
became self-sufficient in fluid milk
production - lacking secondary processing
facilities for industrial milk (albeit, Central
Dairies processed leftover cream into butter
and soft-serve ice cream mixes, and
Scotsburn used it to make ice cream for
domestic and international markets) - it
began shipping surplus milk to Nova Scotia.
In 2001, all that changed.
“The other provinces wanted us to join
the National Milk Marketing Program
(NMMP) and joining the NMMP opened
new markets,” says Dave Collins, vicepresident and general manager of Central
Dairies. “It was a win-win deal.” An
opportunity for Newfoundland and
Labrador, it also required some hard
negotiations on the part of DFNL. In the
end, says DFNL manager Harry Burden,
“We acquired quota to produce an
additional 31 million litres of milk per year,
almost double our production.”
Since joining the NMMP, provincial milk
production has increased to over 52 million
litres in 2007 (34 million litres in fluid milk).
“That brings us over half-way to achieving
our goal,” says Burden.
That goal comes with a time limit.
Whatever amount is reached by 2015, up to
a limit of the additional 31 million litres,
2.
3.
14
VISION NEWFOUNDLAND AND LABRADOR
4.
1. Cows ready for milking. 2. Central Dairies, on track to start manufacturing cheese by June 2008, plans to make up to one-and-half million kilos of a European-style Swiss cheese annually. 3. Central
Dairies currently has a product line of about 350 dairy food products, including milk, and annual revenues of $170 million. 4. Newfoundland and Labrador has the largest average farm size in the
country with approximately 140 cows per farm producing millions of litres of milk. Photo credit: Brent Chaffey.
becomes the set quota. “It’s a ‘use it or lose
it’ opportunity,” says Burden. And it
explains why producers and processors in
this province are working in high-gear.
Central Dairies ran with the opportunity
and opted to build a specialty cheese plant. A
decision based on several reasons. “Markets
in Canada are growing significantly for
specialty cheese, the margins are better on
these products, and at 10 litres of milk to
one kilo of cheese, the utilization is high,”
explains Collins.
Collins credits the Provincial Government
for making this “labour of love” a reality.
The province invested $1 million to assist
Central Dairies with its business expansion.
In turn, the company contributed $2.5
million toward the venture which will create
10 to 15 new jobs.
The company, on track to start
manufacturing cheese by June 2008, plans to
make up to one-and-half million kilos of a
European-style Swiss cheese annually. “The
opportunities are there. Once we establish
ourselves in Swiss, we’ll look at other
varieties,” says Collins.
Central Dairies currently has a product
line of about 350 dairy food products and
annual revenues of $170 million. The
specialty cheese plant will add an estimated
10 per cent to its current revenues.
Meanwhile the province’s other main
dairy processor, Scotsburn Dairy Group
(Brookfield), also recently expanded. “We’ve
added new production capability for
VISION NEWFOUNDLAND AND LABRADOR
innovative premium (ice cream) novelties to
offer our retail customer base across
Canada, as well as creating new customer
opportunities internationally,” says Gerry
Smith, senior vice-president of Scotsburn.
The largest manufacturer of premium
private label frozen confectionaries in
Canada, the company also intends to use
some of the province’s industrial milk quota
in its products.
Industry representatives are also working
on other challenges facing the sector to
ensure it uses rather than loses its quota.
Foremost is the need to reduce the cost of
forage or feed - the largest farm operating
cost - through increasing local forage
production and developing the land to do
that. According to the DFNL, the province
currently produces only 60 per cent of forage
requirements and imports all of its grain
needs.
“Getting access to, and clearing land and
growing feed are of paramount importance
to attaining and making this new milk quota
profitable,” says Burden. “We’ve cleared
about 3,000 acres since 2001 bringing the
total to around 10,000 acres,” he says. Still,
4,000 more is needed to replace current hay
imports. “We need to double that (14,000)
to provide for full crop rotation and cow
replacement to take advantage of our full
quota,” he says. “We’re clearing land as fast
as we can.”
In another initiative, industry officials
recently travelled to Ireland to study a new
technology for growing corn under plastic
row cover. The Samco X-10 System plants
seed, applies herbicide and spreads the
plastic mulch over two rows of corn. Trials
are currently underway.
“By growing corn we decrease the number
of acres needed to become self-sufficient in
forage requirements,” says Burden. The goal
is simple yet impressive - “we want to grow
all of our inputs.” Two-thousand acres of
corn are in production and the amount is
increasing every year.
Meanwhile, DFNL is also busy addressing
other challenges, including shortages in
skilled labour and participating in research
studies such as cow health and alternate
animal bedding sources.
These initiatives have contributed to what
Burden calls the most modern dairy industry
in the world. “We’ve grown our industry by
50 per cent since 2001,” he says. “More
than half of our barns have been built within
the last 10 years and have the newest milking
equipment and manure handling systems.
We routinely receive people from the
Maritime provinces to see how these systems
work.”
By all accounts the provincial dairy
industry exhibits tremendous prospects for
expansion and diversification to benefit
both rural communities and urban
consumers. Everyone - from corn researchers
to cow wranglers to cheese makers is focused on seeing it reach its full
potential.
15
COVER STORY
16
VISION NEWFOUNDLAND AND LABRADOR
EYES
IN THE SKY
Provincial Aerospace Ltd. is helping to keep
Caribbean waters calm, even in hurricane season.
hen the Royal Netherlands Navy
issued a tender in 2003 seeking
civilian companies to provide air
reconnaissance aircraft and operations in
the Netherlands Antilles and Aruba,
Provincial Aerospace Ltd. (PAL) of St.
John’s was well-qualified to take on the
job. You could say they blew the
competition out of the water.
The Dutch Government was phasing
out its maritime patrol aircraft fleet,
including the two planes it had stationed
in Curacao off the coast of Venezuela that
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were used to patrol its areas of
responsibility in the Caribbean. Despite
the fact that they were competing against
multi-billion dollar companies, PAL
demonstrated that it was well-positioned
to rise above the competition.
“The project was so similar to what we
do in Canada it was a natural
progression. We’ve pioneered the
development of this kind of operation,”
says Brian Chafe, chief operating officer
of PAL.
Chafe is referring to the ongoing
relationship PAL has with the
Government of Canada. In 1989, the
Federal Government retired its fleet of
military tracking aircraft and PAL was
awarded the first surveillance contract
under a new outsourcing approach. The
relationship has flourished and now PAL
performs several missions on the Atlantic
and Pacific coasts for such Federal
Government departments as Fisheries and
Oceans and National Defence - adding up
to an average of 8,000 hours of flying
time per year.
PHOTO: PAL modified two Bombardier Dash-8 long-range aircraft, shown here in Curacao, to meet the project requirements. Photos courtesy of PAL.
VISION NEWFOUNDLAND AND LABRADOR
17
LEFT: PAL installed a gyro-stabilized, electro-optical, infra-red
camera and digital video system for gathering surveillance data
on the aircrafts. BELOW: PAL installed a droppable storage hatch
on the aircrafts, which can deliver a rescue kit to people in
distress in the water. Photos courtesy of PAL. RIGHT: A 30 million
candle-power searchlight was installed on the nose of the aircrafts. The searchlight is so strong it can ignite a piece of plywood from two feet away.
It was an intensive two-year process, but
in July 2006 the Dutch Government
awarded PAL a 10-year contract worth
$120 million, with an option to extend
beyond that time frame. The stringent
requirements included the design,
modification, integration, operation and
maintenance of two multi-use planes.
Brendan Power, the general manager of
PAL’s modification centre, was in charge of
modifying two Bombardier Dash-8 longrange aircraft to meet the mission’s
requirements. While PAL has a long and
successful history of aircraft modification,
he approached this job in particular with
enthusiasm.
“Prototypes are fun,” he explains. “But
they’re tough, too. They start-out simple
and end-up complicated and they never turn
out the way you think they will.”
The biggest innovation Power and his
crew installed was a droppable storage
hatch, which can deliver a rescue kit to
people in distress in the water. The kit can
include such items as a life raft, signalling
equipment, water, a first aid kit and even
shark repellent. Unlike traditional cargo
door openings, the drop hatch is positioned
in the aircraft belly and precision vertical
drops are controlled by the pilot, which
speeds up response time. It is also a more
accurate delivery system and, because it does
not open directly into the aircraft, it is safer
and can be operated in severe weather
conditions.
Other modifications included the
installation of drop tubes for drift buoys and
smoke markers, a domed window for extra
visibility, a gyro-stabilized, electro-optical,
infra-red camera and digital video system
for gathering surveillance data, maritime
surveillance radar and a 30 million candlepower searchlight on the nose that Power
says is so strong it can ignite a piece of
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plywood from two feet away.
All modifications must be approved by
Transport Canada. However, that may just
be the easy part. According to Power, its
own standards are so high it is not enough
for his team to be willing to go on the
maiden flight after the modifications have
been completed. They have to be
comfortable allowing their families on
board as well.
The planes are now in Curacao where
Base Commander Dave Hickey oversees
the operation.
“We play several roles including general
law enforcement and information
gathering,” he explains. That aspect of the
job focuses on fisheries, pollution and
narcotics violations.
“We patrol a large area gathering data
on maritime activity and supplying a
presence and letting them know someone’s
watching them and protecting the oceans.”
Another big part of its operation, and a
more transparent one, is search and rescue
and disaster relief after hurricanes and
volcanic eruptions. Search and rescue
operations, instead of merely search and
assist, is a new task made possible by the
introduction of the drop hatch.
During mission operations there are six
people aboard each plane - two pilots, a
tactical co-ordinator, a sensor operator and
two observers, and they carry out the
specific task they have been assigned that
day by the Netherlands Antilles and Aruba
Coast Guard. Their area of responsibility
covers the coastal waters of Aruba, Bonaire
and Curacao in the southern Caribbean
and Sint Eustatius, Saba and Sint Maarten,
located over 500 miles away in the north
eastern Caribbean.
Between the flight crews, maintenance
and IT support staff, a total of 13 families
made the trip to the tropical paradise that
is only 12 degrees north of the equator.
“It was a big transition,” admits Hickey,
when talking about setting up operations in
the Caribbean. “We’re working with three
different cultures (Dutch, Canadian and
Antillean) and bringing those three cultures
together was a challenge for the first six
months. But now it’s working out famously
and we’ve got a real team approach.”
In the past, only Canada and Australia
have employed private companies in this
manner, but that is now changing.
“This project is being watched by
governments around the world,” says
Chafe. He explains that it is more costeffective to contract-out this kind of
VISION NEWFOUNDLAND AND LABRADOR
Northstar Network has been awarded a contract worth approximately US$6.3 million for work on Lockheed's P-3 Orion
maritime patrol aircraft.
maritime surveillance and rescue work than
it is for a government to expend military
personnel and equipment to do the same
job.
The Netherlands Antilles and Aruba may
be the first overseas jurisdiction to hire the
complete turnkey package from PAL, but
the company has no intention of allowing
them to be the last. Four top executives at
PAL logged over one million miles last year
as the company actively pursues
opportunities to export the experience they
have acquired in over 20 years of maritime
surveillance work and aircraft modification
and maintenance to deliver a complete
package to the rest of the world.
According to Chafe, potential clients are
not just those countries looking for a way
to streamline their maritime operations. In
times of heightened domestic security,
many countries that have never performed
maritime surveillance operations are now
recognizing its value.
“As governments reduce infrastructure
and increase surveillance and coastal
zone protection they are turning to civilians
and PAL is the best. We have a three- to
five-year head start over many competitors
and we intend to take full advantage of
that.”
VISION NEWFOUNDLAND AND LABRADOR
Boeing, Lockheed Martin invest in aerospace industry
ewfoundland and Labrador is about to receive a considerable investment of corporate
N
funds. Aerospace giants Boeing and Lockheed Martin have committed more than $290
million in contracts to Atlantic Canadian firms. This investment stems from the terms of the
Canadian Industrial and Regional Benefits policy. This policy requires companies, which purchase military equipment from Canada, to invest an equal amount of the purchase cost in
Canadian corporations and institutions.
One of the beneficiaries of this investment is Memorial University. Over the next five years
Boeing will contribute $750,000 to robotics research at the Faculty of Engineering, where the
Boeing Laboratory in Autonomous Systems will be established. A team of faculty members
will be assembled in such disciplines as electrical, computer, mechanical and ocean engineering, as well as graduate students and research engineers. The primary areas of research
will include robotics, underwater vehicles and unmanned aerial vehicles. The faculty hopes
to leverage matching funding through programs offered by the Natural Sciences and
Engineering Research Council of Canada.
Another beneficiary is Northstar Network Ltd. - a subsidiary of Northstar Electronics, Inc.
Lockheed Martin has awarded Northstar a contract worth approximately US$6.3 million for
work on its P-3 Orion maritime patrol aircraft. P-3s are used for everything from anti-submarine warfare to firefighting. Northstar, with offices in St. John’s and Gander, will be supplying
approximately 600 wing parts and assemblies per aircraft under an upgrading program. The
company will be using a network of suppliers including key partner and subcontractor CHC
Composites Inc. - a division of CHC Helicopter Corp. It is the first step in what is expected to
be a long-term project to upgrade 50 aircraft over the next five years.
19
PROFILE
Pilot Training
GFT recently signed a contract to provide flight training to
students enrolled in the Bachelor of Technology program at
Rangsit University in Thailand. Photo courtesy of GFT.
Internationally-renowned flight school becomes a destination of choice for foreign students.
hen he was 17 the only thing Patrick
White knew about airplanes was that
flying one had to be better than
working as a labourer. He and his two
brothers started taking flying lessons. While
the other two went on to follow different
paths, White has made a career out of flying.
He began as a bush pilot, flying Americans
into hunting camps, and went on to work for
several years as a pilot for Air Labrador. “It
was a great experience,” White recalls. “It’s
the most fantastic flying that can be done
anywhere in the world.”
However, as time passed White realized
that flying would not satisfy the growing
needs of his family and allow him to continue
living in his beloved Norris Arm in central
Newfoundland. He and his wife, Florence,
bought a grocery store and spent several
years building the business and expanding
their business interests into the tourism and
real estate sectors. Through it all, White
continued flying as a chartered pilot every
summer.
Then, in 1992, he purchased a Cessna 150
to teach his son how to fly. Before long,
others in the Exploits Valley region were
inquiring about lessons. White was happy to
oblige and Exploits Valley Air Services Ltd.
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20
had been born. They bought a second plane
and, in 1993, were awarded a contract by the
federal department of National Defence to do
air cadet training.
Patrick White is the president and CEO of Gander Flight
Training, Domestic Division. Photo courtesy of GFT.
The operation was relocated to Gander in
central Newfoundland as a temporary move,
but the business opportunity associated with
the Gander International Airport proved to
be attractive. Exploits Valley Air Services was
soon operating its flight training under the
trade name Gander Flight Training (GFT).
Fifteen years later, GFT is still there. Now it
is an internationally-renowned flight school
with 20 aircraft and a staff of 65 employees.
Instructors include Air Canada pilots and it
offers state-of-the-art facilities, a Modular
Flight Deck flight simulator and a technical
library.
Students at GFT can train on both single
engine and multiple engine aircraft.
Depending on their reasons for learning to
fly, they can also acquire additional
endorsements to fly float planes, ski-planes,
water bombers and even helicopters.
Students can also earn a recreational pilot’s
permit, which limits them to domestic
daytime flying in a single engine aircraft with
a maximum of three passengers, to a frozen
ATPL or Airline Transport Pilot License that is the highest level of pilot certification
possible, the kind of license people who fly
large passenger jets hold. With a frozen
ATPL, pilots are eligible to fly as a first
officer, for example, but they have certain
restrictions on their license and cannot serve
as pilot-in-command. They continue to gain
experience and air time while working for an
airline and then have their license unfrozen
when they have reached a certain age and
number of flying hours.
GFT operations have an added benefit to
students because White’s group of aviation
VISION NEWFOUNDLAND AND LABRADOR
companies exist in a three-carrier
environment. Students work in a professional
environment and have daily contact with
commercial pilots, medevac operations and
charter flights. Of course, Gander itself is a
renowned centre of aviation history. White
considers the airport, the people, the
navigational aids and the control centre vital
assets to his aviation business.
However, he also feels that students see
value in completing their training at GFT
because it is owned and operated by a pilot.
“My company isn’t owned by a board of
directors,” he states firmly. “Flying is about
the passion of aviation and that’s something I
am able to share with my students.”
While the majority of students are from
Newfoundland and Labrador and the rest of
Canada, GFT attracts foreign students from
such European countries as Britain, France
and Ireland. The cost of qualifying for a
license in Canada is roughly one-third what it
would cost in Europe to receive equivalent
certification, and a Canadian license is
readily converted in Europe. “Another big
advantage to training in Gander for potential
pilots from other countries is the fact that we
receive our full share of varying weather,”
says White. “With four distinct seasons no
one who trains here can be accused of being
a ‘sunshine pilot’.”
However, students are now coming from
much further distances. For example, there
are currently 90 Chinese students in training
at GFT. “Some time ago we targeted Asia as
a potential market and spent a great deal of
time and money on developing this
opportunity” says White. They are here as a
result of a critical shortage of trained pilots in
China, where demand is at a fever pitch. It
will take the students 12 to 14 months to
earn their frozen ATPL and when they return
to China they will complete their training by
flying Boeing 737s and other large aircraft
under the auspices of whichever Chinese
airline they will be working for.
But it does not stop there. GFT recently
signed a contract to provide flight training to
students enrolled in the Bachelor of
Technology program at Rangsit University in
Thailand. The students will divide their time
between the university in Thailand and
Gander, spending about three years in regular
classes and one year at flight school. There
are currently 80 students enrolled in the
program and 40 of them are expected to
arrive in the province in 2008 and 2009. The
company expects to host 40 Thai students
annually, either for a full year or in two sixmonth blocks.
The influx of foreign students into the
Gander region can be considered something
of an economic boom. In practical terms,
international students generally spend from
VISION NEWFOUNDLAND AND LABRADOR
$18,000 to $25,000 per year in their host
community. With the possibility of 140
foreign students at the school this year, the
community of 10,000 will benefit from an
increase in economic activity and population.
However, it is not just about foreign students
coming to Gander. White recently received an
enquiry from a group in India to physically
replicate the Gander flight training operation
in the southern part of that country. He is
not sure it will pan out, but it does illustrate
the respect the company has garnered in the
international community.
“Everything’s shaping up the way it
should,” says White. “We have a long-term
plan and we will continue to market
ourselves to the world.”
So, why are so many foreign students and
institutions looking overseas for flight
training? “There are global
opportunities out there and
aviation is an integral
component of any international
expansion. China and India are
booming economies and it’s
hard for them to access this
kind of aviation training
domestically.
They
feel
comfortable coming to Canada
for instruction and they love
Newfoundland and Labrador
and our culture,” says White.
“Our approach means straightforward dealing in an honest
manner.”
White insists that GFT
strives to remain a top-notch
choice in every way that
2.
matters. “We have three
priorities,” he says. “Safety,
customer service and profitability, in that
order. I insist on quality. I represent the
company and the company represents me so
it must be five-star.” While flight training
remains the core division within the present
group of companies, White is proud to point
out the expanded corporate profile now
operating under the trade name GFT
Aerospace Technologies. The company has
expanded into the airline business, charter
operations, medevac, manufacturing, aircraft
maintenance, helicopter sales and service and
has many agreements and contracts
throughout North America.
Ironically, while White and his team
continue to train future 747 pilots he does
not seem to envy them. The veteran bush
pilot has a long-standing contract with the
Provincial Government for whom he
continues to fly water bombers and that suits
him just fine. “We operate in a very
sophisticated environment at GFT Aerospace
Technologies, but I personally prefer to fly
just above the trees.”
1.
3.
1. Students at GFT can train on both single-engine and
multiple-engine aircraft. 2. GFT has expanded into other
areas including medevac. 3. GFT also offers flight training on
helicopters.
21
INVESTMENT
Angel
Investors
Bridging
the Gap
Innovative Newfoundland
and Labrador companies
are receiving captial from
private sector investors.
all Jo Mark Zurel an angel and he is
not going to argue. The former chief
financial officer for CHC Helicopters
and current president of Stonebridge
Capital wears his wings and halo proudly.
Angels are investors who bridge the
financial gap that young companies often
face when they have outgrown their ‘love
money’. Typically, they have used the initial
investment from family or friends and they
do not qualify for a formal investment of
venture capital.
“Historically, it has been very
challenging for start-ups to receive capital
in this market. This is particularly so for
young companies in the advanced
technology sector where companies often
do not have physical assets for traditional
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22
lenders to secure their loans,” says the
Honourable Trevor Taylor, Minister for the
provincial department of Innovation, Trade
and Rural Development. “Available capital
is essential to build and keep the kinds of
innovative companies that ensure the
province remains competitive.”
Connecting investors to companies in
Newfoundland and Labrador is not always
easy. To bridge this gap, Zurel and his
fellow angels are members of the
Newfoundland and Labrador Angel
Network (NLAN), launched in September
2006 by the St. John’s Board of Trade.
There are angel networks across Canada
and the United States and the numbers
continue to grow. However, NLAN is one
of only two in Atlantic Canada and it is
strictly for Newfoundland and Labrador.
One side of the angel network is
composed of potential investors like Zurel
who meet certain nationally-set criteria of
income or assets. NLAN already includes
20 investors from the province. The other
side of the network is made up of
entrepreneurs looking for funds.
Cathy Favre, NLAN’s executive director,
has already received hundreds of inquiries,
some from well-established companies and
others from companies seeking assistance
before they are ready to apply for angel
funds. NLAN looks for local companies
that have completed the research and
development phase of operations. If they
seem promising they are put through a
rigorous process that NLAN’s board chair,
VISION NEWFOUNDLAND AND LABRADOR
Cathy Favre is the executive director of the Newfoundland
and Labrador Angel Network. Photo courtesy of NLAN.
Ray Dillon, describes as “Cathy’s boot
camp.”
NLAN is not an incubator. However,
they do help companies identify its
strengths, assess their overall value and
learn how to encourage investment. When
Favre and the board of directors determine
they are “ready”, the eager entrepreneurs
meet with the network and pitch their case.
So far, three companies have progressed to
this stage and two have been accepted for
funding.
For Zurel, the experience has been
nothing but positive. He appreciates the
benefits that stem from being part of a
network, including the fact that large
investments on an individual basis is not
required. “Individually it may be too much
risk for one person, so we group together
and each gives $50,000 instead of one
person risking $1 million.”
The angels are also able to divide up the
work. For one deal, Zurel did all the work,
including the due diligence investigation.
For another, someone else took the lead. “A
big benefit is that we’re a diverse group of
people, so someone probably has
experience in a specific industry,” he
explains. “We recognize the investments
are high risk. We go in with our eyes open
and if we think they’ve got a crack at it we
want to give them a chance.”
Dillon sees nothing but good ahead for
the organization. “The opportunities for
both sides are positive. There are a lot of
people with money, both old and new, and
lots of the seeds sown years ago in
commerce and engineering at the province’s
university are now growing. Before, there’s
only been one or the other. Now we have
both.”
Entrepreneurs approaching NLAN can
expect to receive an investment of between
$100,000 and $1 million to get them off
VISION NEWFOUNDLAND AND LABRADOR
A leopard shark in the kelp forests at
Monterey Bay Aquarium in California. Photo
credit Diana Crew, Immersion Presents.
Virtual expeditions
iddle school students in Newfoundland and Labrador recently participated in an
M
underwater mission to the giant kelp forests of California’s Monterey Bay - and
they did it without getting wet.
The Marine Institute of Memorial University is the first Canadian site of Immersion
Presents - an educational program that allows participants to take part in a virtual
scientific expedition. The program, which uses a combination of satellite and Internet
connections called telepresence technology, is the brainchild of Dr. Robert Ballard, an
oceanography professor at the University of Rhode Island and the man who discovered
the wreck of the Titanic. Its purpose is to encourage students to consider a career in
ocean science by getting them up close and personal with the wonders of the sea.
Along with students in aquariums, museums and science centres across the United
States, students in this province virtually boarded the research vessel Fulmar and dove
10 metres underwater where, with the help of divers and an ROV, they studied everything
from sea lions to starfish. The interactive program, which MI is delivering in partnership
with the Newfoundland and Labrador Science Centre, allowed them to directly
communicate with the scientists at the site and was the first of what is hoped to be a
series of such expeditions.
Students are not the only ones benefiting from the program. The technology will enable
scientists in this province to participate in expeditions and experiments with their
counterparts at the University of Rhode Island. It is another link in the chain connecting
the two institutions that was formalized in a Memorandum of Understanding signed in
2006, furthering the province’s commitment to building partnerships that will help
strengthen and grow the marine technology sector in Newfoundland and Labrador.
23
NLAN recently announced the finalization of two deals with local companies’ dataSentinel and adfinitum. Ed Clarke (L) of
adfinitum and Tom Chalker (R) of dataSentinel are pictured here. Photo courtesy of NLAN.
Cathexis CEO, Steve Taylor, recently signed a deal through CERT with investors in the Middle East.
the ground. Eventually, the most successful
companies are going to need more than
what NLAN can provide. For some,
opportunity might come with a knock on
the door of Gateway Without Borders,
which now goes by the acronym GWB.
GWB matches technology firms in
Newfoundland and Labrador with
partners in the United Arab Emirates
(UAE) that have access to capital and
market development resources. It is an
initiative of the Gardiner Centre at
24
Memorial University’s Faculty of Business
Administration.
The concept came about when Dr. Bob
Richards, a former Chair in Youth-focused
Technological Entrepreneurship, left
Memorial to accept a position as CEO of
the Centre of Excellence of Applied
Research and Technology (CERT). CERT is
the commercial arm of the Higher Colleges
of Technology in the UAE and the largest
Middle East North Africa investor in the
discovery and commercialization of
technology.
Richards’ appointment was seen as an
opportunity to link local technology and
high-growth companies with the most
dynamic economy in the world, explains
Daryl Genge who has been retained to
develop and oversee the project. “We
need money and they need entrepreneurial companies.” A Memorandum of
Understanding was signed between the two
institutes in March 2005 to begin
operations.
To qualify, companies must be willing to
expand their business into the Middle East.
The UAE are trying to build local capacity,
not just finance it elsewhere. Companies
also have to provide a product of relevance
to the investing partners. Genge cites health
care, marine technology and security as
some of the areas of particular interest.
Finally, companies have to be willing to
make a long-term commitment to the
partnership.
Companies that fulfill the criteria are
helped by GWB in several ways. Genge
assesses both the company and its product
in the same way a venture capitalist would.
If a company does not know its current
market value, GWB will find out. If there
are gaps, GWB will help to fill them in
through advice and support. Then the
principals are tutored in the proper way to
present themselves to potential investors.
Recently, Cathexis Innovations of St.
John’s signed a deal through CERT with
investors in the Middle East that is worth
several millions of dollars. Company CEO,
Steve Taylor, thinks the program, and the
connections it helps companies to make, is
of real benefit.
“Through CERT, we have a lot of
credibility and that opens up a lot of doors.
Moving into that area was part of the
future road map, but it would have
taken us five or ten years longer without
CERT.”
GWB has three more companies in
negotiations, out of the 30 or so companies
they consider reasonable candidates. It has
been a steep learning curve for GWB. They
have been in pilot project mode so far, but
are now in the process of re-branding and
solidifying their position.
Genge sees a future bright with potential
expansion for both sides. The UAE can
serve as a springboard into markets around
the world, starting with Asia and Africa. At
the same time he envisions a broadening of
the base here with companies Canada-wide
using GWB as a true conduit to
international expansion.
“We’ve positioned ourselves well and
with lots of creativity we can expand and
give ourselves longevity.”
VISION NEWFOUNDLAND AND LABRADOR
MINING
Mining Companies
Digging In
Mineral shipments are breaking records as demand for the provinces underground riches grows.
ou may have heard the expression there is gold in them thar’ hills.
Well, there is also iron, nickel, zinc,
copper and a host of lesser-known
minerals like pyrophylite, dolomite and
barite. And, of course, there is rock - this
is Newfoundland and Labrador - granite,
slate and the more exotic anorthosite
(labradorite) to name just a few. The
province boasts a wide variety of rocks,
minerals and even gemstones, but one
thing they all have in common is that
Y
VISION NEWFOUNDLAND AND LABRADOR
they are valuable enough that many
people want to dig them up.
The mining industry is having a
considerable impact on the people,
economy and communities of
Newfoundland and Labrador. More than
3,800 people are projected to be directly
employed in the industry in 2008. Many
more work for the service and mineral
exploration companies that operate in
the province, also contributing to the
industry. If that number does not sound
big enough, the gross value of mineral
shipments has increased 470 per cent
since 2004 to $3.9 billion in 2007 and is
forecast to remain strong at almost $4
billion in 2008. That is a lot of rock.
In
2007,
mineral
exploration
expenditures were $138 million, which
not only set a new record, but was a
dramatic increase over the $48 million
spent in 2005 - only two years
previously. There are several key factors
behind the flurry of exploration and
25
In 1996, Vale Inco acquired the rights to the Voisey's Bay nickel-copper-cobalt deposits located on the eastern edge of a vast
expanse of northern wilderness - 300 kilometres north of Happy Valley-Goose Bay in Labrador. Reprinted with permission from
Vale Inco.
26
development in Newfoundland and
Labrador these days. One of these is the
soaring prices for minerals globally
thanks largely to economic growth in
markets like China and India. But other
factors are also playing important roles
in the province’s mining successes. The
Provincial Government is making the
province more globally competitive in
mining through initiatives such as the
Mineral Incentive Program, new
geological mapping and improved
online service delivery.
The three largest players in the
market are Voisey’s Bay Nickel,
Wabush Mines and the Iron Ore
Company of Canada. Iron and nickel
together have a gross shipment value of
over $3 billion, easily surpassing any
other projects in the province.
Employees in those two industries
outnumber those in any other facet of
mining many times over.
The Iron Ore Company of Canada
(IOC) is the country’s largest iron ore
producer. With 1,534 employees, it is
also the largest employer in
Newfoundland and Labrador’s private
sector. The high-quality iron ore it
mines in Labrador City is used by steel
makers to make pig iron and steel.
In March 2008, IOC announced a
major expansion to its operations that
president and CEO Terence F. Bowles
attributed to a very tight iron ore
market. The expansion, which entails a
$500 million capital investment, will
see annual production rise from 17.6
million tonnes of concentrate to 22
million tonnes. It is the first phase of an
expansion that could entail the
investment of a further $500 million by
2011 and increase production capacity
by a whopping 50 per cent to 25
million tonnes. It is expected that 200
additional workers will be needed at the
mine, as well as upwards of 250
construction workers over the next
three years. Current estimates of
reserves suggest that even with the
increase in production the mine should
have a lifespan of another 50 years.
In 2007, the Voisey’s Bay Nickel
parent company, Inco, was purchased
by CVRD and the company name was
changed to Vale Inco. Voisey’s Bay
Nickel Company Ltd. is now called
Vale Inco Newfoundland and Labrador.
Opened in September 2005, the mine
produces copper, cobalt and nickel,
which is the most valuable of the three.
Estimates suggest that the ground
around Voisey’s Bay contains one of the
richest nickel deposits in the world. The
VISION NEWFOUNDLAND AND LABRADOR
A tractor trailer receiving a load of processed barite from the Atlantic Barite storage silo at Buchans. Photo courtesy of Atlantic Barite.
6,000 tonne per day processing facility
reported production of 59,000 tonnes of
nickel, 42,000 tonnes of copper and 1,239
tonnes of cobalt in 2007. The company
currently employs 400 people at the open
pit mine, a number that is expected to
double in 2018 when underground mining
is projected to begin. While the mine’s
lifespan is conservatively estimated at 14
years, there is potential to continue
operations beyond this time frame.
As part of the development agreement
Vale Inco signed with the Provincial
Government, the company committed to
constructing a nickel processing plant in
the province. The plant, as proposed for
Long Harbour, Placentia Bay, is expected
to begin operations in 2012 and will have
the capacity to produce 50,000 tonnes of
nickel annually.
Wabush Mines is the province’s third
significant mining operation. Mining
began there in 1965 and it has the capacity
to produce 6.1 million tonnes of iron ore
per year. In 2008, the company expects to
produce five million tonnes of iron and
will employ a work force of 467 people.
While Vale Inco, Wabush and IOC are
the largest companies in the province’s
mining sector, there are also many other
participants. In fact, Newfoundland and
Labrador’s mining sector is booming.
When Anaconda Mining opens its new
VISION NEWFOUNDLAND AND LABRADOR
Pine Cove gold mine in 2008, it will be the
fourth new mine in the province in three
years.
Other new mines in the last three years
include Aur Resources’ Duck Pond mine
in central Newfoundland. Production
began in January 2007 and the mine is
expected to produce approximately 41
million pounds of copper and 76 million
pounds of zinc annually, as well as silver
and gold. Close to 200 people are
expected to be employed, making the mine
a significant employer in the area.
While the Pine Cove gold deposit is
smaller, it is still a good project for
Anaconda Mining says Chairman and
CEO Lew Lawrick. He describes the
deposit near Baie Verte in central
Newfoundland as a good, but small, veintype project that should yield 20,000
ounces of gold per year for the next 12
years or so. It is anticipated that 45 people
will be employed at the mine.
Lawrick says that gold prices are now at
a point where a project such as this one
makes sense - whereas, four or five years
ago, it might not have been worth pursing.
“We saw the opportunity and followed-up
on it. We’ve been very happy and
delighted with all the government help we
received.”
Lawrick is not the only one to express
such appreciation or to take advantage of
Photo courtesy of IOC.
IOC CEO
Terence F. Bowles
recently announced a
major expansion to its
operations attributed
to a very tight iron ore
market.
27
Hi-point Industries, a peat moss processing company, employs close to 20 people and won the Provincial Government’s 2006 Exporter of the Year Award.
booming times in the industry. Malcolm
Swallow is the co-owner of Atlantic
Barite Ltd., a company with a rather
interesting history. Between 1928 and
1984, the mine at Buchans, in central
Newfoundland, processed over 16
million tonnes of zinc, lead, copper, gold
and silver. The mine also produced what
they considered to be a useless mineral
by-product – barite – which was
deposited in the tailing ponds. However,
it was later discovered that barite could
be used as a weighting agent in oil well
drilling mud because it is both heavy and
inert.
Most of the world’s barite supply is
mined in Nevada, Morocco and China,
but Swallow and his partners realized
that with the booming offshore oil
industry
in
Newfoundland
and
Labrador, it might be a good time to
explore the possible reclamation of the
barite that was left behind when the
metal ran out and the Buchans mine
closed.
Swallow explains that they are
actually cleaning up the site by
reclaiming the barite. They expect to
produce about 3,000 tonnes a year,
which is just enough to keep the province
self-sufficient. Because they use a
28
flotation method to extract the barite,
the mine only operates from May to
October when they can count on freeflowing water. The mine is a small
operation that provides seasonal
employment for approximately 10
people.
“It’s a fun job and a good company,”
says Swallow. “We’re very grateful to the
government because they helped us a
great deal.”
The mining boom has also resulted in
the reopening of a mine that was
previously deactivated in 1998. The
Beaver Brook antimony mine extracts
antimony - a metalloid used in flame
retardant formulations and as a hardener
for lead in storage batteries. Since the
closure, prices for antimony have
quintupled. The mine, and a 450-tonneper-day mill, is now back in production
and up to 90 people are expected to be
employed for the projected seven-to-tenyear lifespan of the mine.
One of the advantages of the mining
industry in Newfoundland and Labrador
is the high-paying jobs and prosperity it
is generating in many rural areas.
Working in a mine requires a
considerable amount of skill. So, it is not
surprising that, unlike some other rural
industries, mining has always been well
paid. Both large and small companies
recognize that finding the workers they
need takes some effort, and workers in
some fields are being enticed home again
by the lure of wages similar to those that
can be earned in Western Canada.
Others are able to stay in their home
communities because of the presence of
marketable goods that are literally
beneath their feet.
The story of mining in Newfoundland
and Labrador is not just about the major
players. It is also a story about Hi-point
Industries, a peat moss processing
company in the central Newfoundland
town of Bishop’s Falls that employs close
to 20 people and won the Provincial
Government’s 2006 Exporter of the Year
Award. It is also the story of TUC, a
subsidiary of the Labrador Inuit
Development
Corporation,
which
continues to meet the demand for the
gleaming labradorite it markets for
building facades in Italy and in other
markets across Europe and North
America. These companies and many
more like them, producing familiar and
unfamiliar
substances,
are
all
strengthening the province’s rural
regions.
VISION NEWFOUNDLAND AND LABRADOR
EXPORTING
Fish Processors
Going Upscale
Phot
o co
urte
sy o
f Ne
ptun
e Se
a Pr
oduc
ts.
New gourmet seafood companies are successfully filling a niche for people with little time to cook.
n December 2006, Bond Rideout went
to Fair Haven on the province’s
Avalon Peninsula to buy a printer and
ended up with a fish plant! With a master’s degree in Religious Studies and several successful businesses under his belt,
including real estate and antiques, the
renaissance man saw nothing strange in
the impulsive purchase of a business that
was not only teetering on the brink of
insolvency, but about which he knew
next to nothing. Now barely a year later,
Rideout is marketing a line of over 200
frozen seafood products, most of which
he developed and tested himself.
His company is called Neptune Sea
Products and with specialties like White
Wine and Lemon Flavoured Salmon and
I
VISION NEWFOUNDLAND AND LABRADOR
Smoked Wild Arctic Char Spread it is not
your typical frozen fish food. Rideout
promotes his product as “white tablecloth dining at home” noting that with
his frozen entrees you can enjoy restaurant quality food for $6.99.
That is not the only thing that sets
Neptune apart. The plant that Rideout
bought contained a smoker so he examined the market potential for a smoked
salmon product on the eastern seaboard
of the United States, where most salmon
is sold. Rideout learned that consumers
in this market are increasingly buying
kosher food as an assurance of cleanliness and quality and he recognized that
this niche market would be a good fit for
his products.
Rideout achieved Orthodox Union
(OU) certification for his plant - the most
stringent rating possible. “It’s expensive
and entails a rabbi flying from New York
periodically to inspect the plant,” but
Rideout believes it is worthwhile investment because it adds value to the
product.
He is looking for global sales and it is
paying off. His product was recently
picked up by Sysco, an American-based
prepared food company with sales of
$35 billion in 2007. The United States is
Rideout’s biggest market. It already
accounts for 60 per cent of his sales and
he expects that number to grow.
However, he is eyeing Europe as his next
field to conquer and he plans to use boil29
Henry Cowan is the head of Dockside Appetizers. Dockside Appetizers
product’s include Snow Crab Legs Fillo Wrap and Crispy Cold Water Shrimp
Wontons. Photos courtesy of Dockside Appetizers
30
in-the-bag kippers in butter meal to
target UK consumers as his way in.
The goal is for Neptune to be a
$10 million company in two years,
but Rideout says the accomplishment of which he is most proud is
generating
jobs
in
rural
Newfoundland where he grew up.
“People only see the difficulties of
running a business in outport
Newfoundland, but I have low
taxes, a loyal workforce, pristine
water and everyone there wants me
to succeed because that’s their security.”
Rideout wants to make fish processing a career choice. His plant
operates a full shift 12 months a year
and by the end of 2008 he expects to
have 45 employees. He hopes to
eventually have several plants running year-round. Treating his workers well is his number one priority.
“There’s no standing around waiting for the fish boat,” he says. “It’s a
new mentality. The fish is caught
properly, processed properly and
marketed properly. Nothing goes to
waste – you just have to find the
right opportunities.” For example,
Rideout sells salmon skins to a company in Iceland that turns them into
wallets. He says these practices
result in good wages as well as job
security for his employees.
It is an approach to business
that another Newfoundland and
Labrador start-up company is in
complete agreement with. Henry
Cowan spent 20 years as a food broker, a commissioned salesperson
who represents manufacturers and
sells to distributors. With that background he knows the food and fish
industries inside out and four years
ago two things came to his
attention. First, the big catches in
Newfoundland and Labrador, like
crab and shrimp, are undervalued.
Second, the market for prepared
appetizers doubled from 2000 to
2005 and has been growing by 10 to
15 per cent every year since.
To Cowan, those two facts spelled
opportunity. He spoke to the chefs
of some of the finest restaurants in
the province and asked them if they
would be interested in developing
some appetizer recipes using shellfish. They agreed in exchange for a
commission on the sales of their own
creations. Now Cowan is the head
of Dockside Appetizers, and his line
of appetizers, including Snow Crab
Legs in a Filo Wrap and Crispy
Cold Water Shrimp Wontons, are
definitely geared towards upscale
taste buds.
Cowan has been marketing his
products aggressively. He laughingly
admits he has been living out of a
suitcase lately, but his efforts are
paying off. Costco did a test run of
the Shrimp Wontons in 11 of their
stores and could not keep it on the
shelves, according to Cowan. Now
they are buying enough product to
stock 40 stores and Cowan believes
they will go nation-wide. Also, a
high-end chain in the United States,
Harris Teeter, has just signed a contract to stock his Smoked Cod
Paté with Partridgeberry Chutney.
Cowan also has deals in the offing
with other large companies in the
United States and Europe.
Cowan is currently targeting the
retail food market because his experience tells him it is the easiest nut to
crack and he wanted to get a quick
start to his business. But future plans
include selling to the food service
industry in venues like banquet halls,
cruise ships and restaurants.
“That’s for longevity,” he
explains. “Because they don’t like to
change suppliers, so once you’re in,
you’re in.”
Unlike Rideout, Cowan contractsout all his work. “With the amount
of excess capacity in the province I
see no need to build a plant of our
own,” he says. Right now his food is
processed at Allan’s Fisheries in
Benoit’s Cove on the province’s west
coast, which has upgraded all its
equipment to meet his needs. Cowan
figures that by the end of the year
they will have all the work they can
handle. Two more plants have been
engaged and he expects to need more
as international contracts are signed.
Like Rideout, he is hoping to keep
the plants operating year-round something he thinks can only be
good both for workers and for rural
Newfoundland. As machinery takes
over more of the so-called grunt
work, workers will be more highlytrained and receive higher wages.
“The world is hungry for seafood,
be it main courses or appetizers, and
we’ve got the best seafood in the
world right outside our door.
Combine that with the best cuisine
and you’ve got a winning combination,” says Cowan. “We’re dreaming
big. This company will be huge.”
VISION NEWFOUNDLAND AND LABRADOR