“He, therefore, who is now against domestic manufacture, must be for reducing us either to dependence on that foreign nation, or to be clothed in skins, and to live like wild beasts in dens and caverns. I am not one of these; experience has taught me that manufactures are now as necessary to our independence as to our comfort.” Thomas Jefferson, in a letter to Benjamin Austin – January 9, 1816
While many pundits may proclaim novel concepts and fashionable trends to be innovative and groundbreaking, the truth is that history repeats itself.
It certainly does.
The issue is that it is only known until the memory of the last person to experience it has faded or been extinguished.
And thus today, the act of near-shoring (moving operations to a more proximate location) or re-shoring (returning a once-present operation to its place of origin) is touted as a cutting-edge solution to supply chain bottlenecks, global instability, inflation, and labour shortages.
Yet, these very ideas were once a virtue of independent and wealthy nations.
While technology has certainly reshaped the world and made possible the arbitrage of input costs and the creation of an intricate, global network of trade, the aforementioned principles remain.
Consumers relished the power and convenience of one-click, next-day delivery of goods from a catalog with billions of choices. However, as our online shopping addictions were rocked by the pandemic, we began to temper our preferences to include stability, reliability, quality, and affordability; even at the expense of waiting just a little bit longer.
Not only that, but we began to see the effects of a dependence on global partners unfold before our eyes in sectors with high-value and high-priority goods, such as automobiles, groceries, medicines, and commodities.
A slight delay in the delivery of that new gadget or wardrobe item paled in comparison to empty food shelves and electric vehicles with year-long waitlists and jaw-dropping prices. It was no longer a theory or distant concern, but one that raised questions as to how can we, as a collective, ensure that there was a backup option should ports jam, factories shut down, or countries limit exports.
And so businesses began adding contingencies to their operations. First, we saw buffer inventories that led to a significant supply glut (fueling even larger holidays sales), followed by the shift to ‘just-in-case’ models, and announcements of operations moving to Mexico, the United States, and Canada.
This isn’t to say that a single nation, like Canada, needs to produce everything and anything and turn its back on the world.
No. What it means is that this is an opportunity to be a part of the broader competitive landscape, provide more options to consumers and at a lower price, reignite our struggling manufacturing sector, and reap the benefits of a growing and highly-skilled labour force. It’s the excuse we need to take a few steps forward.
We’ll be just fine importing wine and olives from the Mediterranean; so long as we can produce the staples and aim to lead in a few key sectors best-suited to us.
In our previous issues we have highlighted Ontario’s newfound leadership in electric vehicle manufacturing, green technologies, and the innovative production of food and pharmaceuticals.
We also highlighted the key concepts of superclusters and how public and private partnerships are helping to finance the development of innovation hubs, as well as real estate pockets with growing densities of businesses.
What we will embark on in this, and coming, issues is a closer examination and spotlight on various hubs throughout Southern Ontario, and how they are slowly transforming the province back into a manufacturing leader.
So without further ado, let’s take a brief look at the City of Hamilton and note a few of the more prominent businesses, along with their real estate.
Hamilton Spotlight on Manufacturers and Cornerstone Businesses
The City of Hamilton has a long history with manufacturing and, specifically, in relation to the fabrication and processing of metals and materials. In 2011, the federal government opened CANMET Materials Technology Laboratory, a $57-million, state-of-the-art lab aiming to provide support in innovation to the manufacturing of mineral and metal products.
It’s no surprise that, based on the region’s legacy and continued funding that we see an enormous amount of businesses focused on the engineering, fabrication, and production of goods in the automotive, steel, food, and energy industries.
Corbec Steel’s New 100,000 SF Facility at Red Hill Business Park, Hamilton. Source: CBC.
Newcomer: In late 2019, Corbec Steel announced a brand-new, $40-million, 100,000 square-foot facility coming to 22 Ambitious Court in the Red Hill Business Park in Hamilton, Ontario; its fourth Canadian plant. Operating since 1965, the Quebec-based manufacturer describes itself as ‘the leading hot-dip galvanizer in Canada,’ producing over 400 million pounds of galvanized product each year.
Bimbo Canada’s 400,000 SF bakery at 745 Nebo Road in Hamilton, purpose-built by First Gulf for Canada Bread in 2011. Source: FirstGulf.Notable Expansion: In January 2023, the Government of Ontario announced a $1.5-million grant to help Bimbo Canada add a $15-million tortilla production line to the newer of its two facilities on Nebo Road in Hamilton. Said bakery is touted as the largest in North America, and was completed as a design-build for Canada Bread in 2011, three years prior to their $1.83-billion acquisition by Grupo Bimbo.
Bimbo Canada has 16 baking plants and 11 distribution centres nationwide; producing over 1,000 products for 18 brands.
ArcelorMittalDofasco’s Hamilton plant at 1330 Burlington Street East. Source: AMD.Established Player: ArcelorMittalDofasco, along with Stelco, has a strong reputation and is one of the leading influencers of the history of Hamilton, Ontario. It is also well known as one of the world’s largest steel producers. Having been founded in the city as Dominion Steel Castings Company in 1912, the manufacturer championed the basic oxygen steelmaking (BOS) process, cutting previous production times by one-twelfth.
In early 2022, the steel giant announced a $1.765-billion plan – along with a $500-million provincial government loan and grant – to reduce its carbon emissions by 60% by 2028. This is set to be accomplished through, once again, modifying its steelmaking process to Direct Reduced Iron (DRI) and Electric Arc Furnace (EAF) methods.
According to the company, it “operates on 800 acres of property within 850 buildings. Nearly 5,000 employees proudly work for the facility, producing and shipping 4.5 million net tons of flat steel used across North America.”
Other businesses not featured but worth noting: All Tool, Canada Pipe, Denninger’s, Embree, E.D. Smith, Fibracast, Hager Industries, Ingersoll Tillage, Kubes Steel, Liburdi, Maple Leaf Foods, Mondelez, National Steel Car, Navistar, Orlick Industries, Taylor Steel, Versitech, Walters Group.
What’s Next for Hamilton?
While there are numerous bright spots in Hamilton’s manufacturing industries across the agriculture and food production, metal fabrication, life sciences, and automotive sectors, there is one major project worth highlighting again.
Steelport – 800-acre Stelco Lands Reevelopment – Up to 12 MSF
Steelport. Source: Slate Asset Management.Slate Asset Management purchased the 800-acre, former Stelco site at 386 Wilcox St in Hamilton for $518 million. Now, the developer has unveiled its vision for ‘Steelport,’ a “ world-class industrial park connecting rail, road, and water in the historic port of Hamilton, Canada.”
As part of the transaction, Stelco is retaining approximately 1.5 million square feet on 100 acres in a long-term sale-leaseback with Slate.
The massive undertaking is expected to create 23,000 new jobs across the GTHA, inject $3.8 billion into Ontario’s economy over the next decade, and re-active 3,400 metres of Lake Ontario waterfront. Current zoning would allow Slate to develop up to 12 million square feet of industrial space. What happens next has investors and occupiers across the region anxiously waiting. Conclusion: All of these businesses are carrying the torch for domestic manufacturing. The hope is, as Canadian producers become more competitive, that exports and demand from increased in employment will support further investment and expansion.
This growth will manifest through the need for more modern manufacturing facilities and the creation of new businesses to supply talent, equipment, and materials.
Not only will all of this help bring in both investment and income from exports, as well as help employ hundreds of thousands of people in the long-run, but it will further secure supply chains, reduce waste in cross-globe transportation, and make us collectively independent from the many external factors which we saw play out during and following the pandemic.
In any event, industrial land and properties are the common element throughout and their development will play a pivotal role in the final outcomes.
When, where, what, and how these new projects come about is largely unknown but ready to be written by those with the vision and appetite to make it happen.
What we know for certain is why; and it has become clear that Ontario wants to be back in the conversation as an independent and innovative region.
For a confidential consultation or a complimentary opinion of value of your property please give us a call.
Until next week…
Goran Brelih and his team have been servicing Investors and Occupiers of Industrial properties in Toronto Central and Toronto North markets for the past 30 years.
Goran Brelih is an Executive Vice President for Cushman & Wakefield ULC in the Greater Toronto Area.
Over the past 30 years, he has been involved in the lease or sale of approximately 25.7 million square feet of industrial space, valued in excess of $1.6 billion dollars while averaging between 40 and 50 transactions per year and achieving the highest level of sales, from the President’s Round Table to Top Ten in GTA and the National Top Ten.
Specialties:
Industrial Real Estate Sales and Leasing, Investment Sales, Design-Build and Land Development
About Cushman & Wakefield ULC.
Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with approximately 53,000 employees in 400 offices and 60 countries.
In 2020, the firm had revenue of $7.8 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. To learn more, visit www.cushmanwakefield.com.
For more information on GTA Industrial Real Estate Market or to discuss how they can assist you with your real estate needs please contact Goran at 416-756-5456, email at goran.brelih@cushwake.com, or visit www.goranbrelih.com.
Connect with Me Here! – Goran Brelih’s Linkedin Profile: https://ca.linkedin.com/in/goranbrelih
Executive Vice President, Broker
Cushman & Wakefield ULC, Brokerage.
www.cushmanwakefield.com
Office: 416-756-5456
Mobile: 416-458-4264
Mail: goran.brelih@cushwake.com
Website: www.goranbrelih.com
