Making Finished Products In Canadian Resource Towns

[Razor]

Just for discussion

For years I've always pondered on why The Canadian mint, a battery company or copper wire/pipe factory doesn't attach a manufacturing facility right at the source..Saay next to a mine that still has 20 years left in it's life.
Ditto for petroleum based products manufacturers being situated right next to the oil fields.

Wouldn't this make sense. or am I out to lunch? Is this happening already? I just feel that the there could of been some great symbiotic things happening with the manufacturers planting themselves right at the source. Some duality.

I know that in a lot of cases, semi finished products in the form of zinc anodes and copper plates are shipped out via rail from a mine's smelting operation to wherever.

Your thoughts?

[Denscity]

I've been saying this for a while locally. We have two major saw mills and a pulp mill. Why not make something out of wood or paper right beside these mills. Instead of shipping it out and shipping in someone else's finished product.

[mistercorporate]

Lack of ambition/vision. This country is like a healthy big boned young man with photographic memory and genius IQ, sitting at home in his pyjamas, belly hanging out, playing video games and eating potato chips.

[Razor]

Originally Posted by Denscity

I've been saying this for a while locally. We have two major saw mills and a pulp mill. Why not make something out of wood or paper right beside these mills. Instead of shipping it out and shipping in someone else's finished product.

Yes..Mill towns too..Kleenex tissue or whoever makes writing paper. Ikea furniture factory even.

Originally Posted by mistercorporate

Lack of ambition/vision. This country is like a healthy big boned young man with photographic memory and genius IQ, sitting at home in his pyjamas, belly hanging out, playing video games and eating potato chips.

You got that right..Check out my recent thread in City Discussions regarding Niagara Falls and chime in with your thoughts on that.

[Loco101]

Originally Posted by Razor

Just for discussion

For years I've always pondered on why The Canadian mint, a battery company or copper wire/pipe factory doesn't attach a manufacturing facility right at the source..Saay next to a mine that still has 20 years left in it's life.
Ditto for petroleum based products manufacturers being situated right next to the oil fields.

Wouldn't this make sense. or am I out to lunch? Is this happening already? I just feel that the there could of been some great symbiotic things happening with the manufacturers planting themselves right at the source. Some duality.

I know that in a lot of cases, semi finished products in the form of zinc anodes and copper plates are shipped out via rail from a mine's smelting operation to wherever.

Your thoughts?

As I live in Timmins, I'm sure you're not surprised that I'm responding.

There has always been discussion of having manufacturing plants in our city that would be supplied by the mines. (gold, copper, zinc, talc, nickel, etc.) I really wish there were some plants here but I know it won't happen with the way things are now.

It is cheaper to ship the raw goods (ore, concentrate, lumber, etc.) out to the manufacturing facilities which are usually within large markets. Shipping finished goods is quite costly so it's better to have things made close to large markets and where there are good systems of transportation.

Another thing is labour availability. Timmins had a lot of unemployment during the 1990s so finding people to work would have been easy. But today there really isn't any unemployment so it would be all about convincing people to move to Timmins to work which isn't easy and would likely be costly.

[Razor]

Originally Posted by Loco101

As I live in Timmins, I'm sure you're not surprised that I'm responding.

There has always been discussion of having manufacturing plants in our city that would be supplied by the mines. (gold, copper, zinc, talc, nickel, etc.) I really wish there were some plants here but I know it won't happen with the way things are now.

It is cheaper to ship the raw goods (ore, concentrate, lumber, etc.) out to the manufacturing facilities which are usually within large markets. Shipping finished goods is quite costly so it's better to have things made close to large markets and where there are good systems of transportation.

Another thing is labour availability. Timmins had a lot of unemployment during the 1990s so finding people to work would have been easy. But today there really isn't any unemployment so it would be all about convincing people to move to Timmins to work which isn't easy and would likely be costly.

Yes, I totally get the lack of labour to fill the roles, but the shipping is a bit of a straw dog IMO? ..It would cost the same to fill a train full of un finished goods to manufacturers vs finished to wholesalers no? And again, I understand the labour challenges of building a plant and trying to find workers to fill the roles.

[thefew32]

Originally Posted by Razor

Yes..Mill towns too..Kleenex tissue or whoever makes writing paper. Ikea furniture factory even.



You got that right..Check out my recent thread in City Discussions regarding Niagara Falls and chime in with your thoughts on that.

Dude, things like kleenex tissue and writing paper should be made where's it's cheapest because no one could care less about the locality of basic necessities like that and not every pulp mill is destined to have an economical factory next door. You're IKEA factory is a step in the right direction but even that falls short because a concern like that will build where's it cheapest! Most people don't go to IKEA for quality!
Support your local, hopefully good quality, artisan because it may seem strange but if your province or city becomes well know for making good quality chairs, people will pay a PREMIUM to buy that and one day that artisan will become an international chair manufacturer. The Germany countryside if full of creators and even the smallest of villages can surprise you with a factory producing for export.
Quality and quantity of jobs. This will take time and will power.

[casper]

Originally Posted by thefew32

Dude, things like kleenex tissue and writing paper should be made where's it's cheapest because no one could care less about the locality of basic necessities like that and not every pulp mill is destined to have an economical factory next door. You're IKEA factory is a step in the right direction but even that falls short because a concern like that will build where's it cheapest! Most people don't go to IKEA for quality!
Support your local, hopefully good quality, artisan because it may seem strange but if your province or city becomes well know for making good quality chairs, people will pay a PREMIUM to buy that and one day that artisan will become an international chair manufacturer. The Germany countryside if full of creators and even the smallest of villages can surprise you with a factory producing for export.
Quality and quantity of jobs. This will take time and will power.

In the BC interior there is a growing industry manufacturing laminated beams. More likely to see that develop instead of the IKEA factories.

[Loco101]

Originally Posted by Razor

Yes, I totally get the lack of labour to fill the roles, but the shipping is a bit of a straw dog IMO? ..It would cost the same to fill a train full of un finished goods to manufacturers vs finished to wholesalers no? And again, I understand the labour challenges of building a plant and trying to find workers,

My guess is that shipping finished goods would cost more because there would likely be a bunch of different items, ones with customizations, colours, sizes and more. And order have to be fulfilled. Whereas raw goods simply just go into the container and get moved to the manufacturing facility.

[wave46]

Some problems that come to mind:

Often manufactured items are made up of multiple things, so unless you're doing something really simple (copper wire, newsprint) you're going to need multiple inputs, all of which probably won't be available at one site.

A manufacturing operation is surprisingly complex. You're going to need a whole bunch of automation engineers and high-end talent just to make that work. That's not going to be readily available in small, isolated towns, so you will have to pay a premium to get people to move there. Even then, you'll probably deal with higher turnover in your upper ranks due to the desire to move back to cities.

The labor force has moved. I've lived in a few of these resource towns and they're greying. It's not like there's thousands of unemployed people are just waiting for jobs in these small towns. Either they've found another job in town, or have left for greener pastures. Some might come back, but a lot won't. Depending on the size of the operation, you may want a fairly deep labor pool to account for turnover, people who don't work out, etc.

The logistical hassle of being far from markets is a challenge too, but it was previously mentioned.

I could see small scale operations at key points opening up (i.e. manufacturing mining equipment in Northern Ontario). The large scale stuff (consumer goods, etc.) is just too involved for a small town to take on.

[Razor]

Aside from maybe batteries, I was thinking of simple items like copper wire, but yes if it would of been cost effective or if the logistics made sense, perhaps we would of seen it by now.

[speedog]

Shipping costs are probably a major factor - making IKEA furniture in remote BC would mean shipping in materials, small piece parts, etc and then shipping out the completed pieces in protective wrapping/boxes some of which would probably have to be shipped in as well.

[niwell]

It's cheaper to ship manufactured items from large distribution facilities in major centres than it is a small resource town. If a manufacturing facility is in the resource town, you have to ship all the other components up there, and then the final manufactured good back down to a distribution centre. On top of having to likely ship much of the raw goods out anyway as there are likely multiple destinations for say, ore.

Resource towns are generally at least somewhat remote so you would also have to deal with the transportation costs of consumer goods / food for an expanded labour force. I'm thinking of a place like Timmins (which isn't even that remote for a mining city) as opposed to the examples of the German countryside, which is orders of magnitude better connected.

[Mongo62]

It comes down to available resources. The major raw materials might be readily available, but almost everything else would be hard to come by. Other people have mentioned labour availability -- the pool of skilled labour is a lot bigger in cities. Also the numerous support businesses -- your factory need a great many specific widgets and other services to function, it would be best to be close to the suppliers of those widgets and services. Pulp mills and mines need to be where they are, and have to eat the higher costs of doing business there. Secondary manufacturers do not need to be tied to a specific location, so they would naturally choose a lower-cost location.

[Denscity]

Our pulp is shipped out and used to make a major brand's toilet paper and McDonald's burger wrappers haha.