CONSULTING PROJECT: ARIZONA-CANADA SUPPLY CHAIN LANDSCAPE ANALYSIS CONSULTANTS: EDWARD MATLOUB MATT WILLIAMSON FIKRE GURJA SAMPAD DAS YUTAKA OYAMA ROHAN VERMA 1
PROJECT GOALS Analyze the trade trends between Canada and MAG region Identify industries and companies crucial to trade between the two regions Identify economic development opportunities based on these industries and trading trends 2
PHASES Phase 1: Identify goods traded between Arizona and Canada Phase 2: Identify Canadian Provinces/Metros that do the most trade with the MAG region Phase 3: Identify key companies and Metro specific trends Phase 4: Analysis Results & Final Recommendations by April 30, 2012 3
KEY FINDINGS STRONG BI-COASTAL TRADE PATTERN AEROSPACE: INTEGRATE, COLLABORATE, CONSOLIDATE CLEAN-ENERGY: COMPETITIVE ADVANTAGE, OPPORTUNITY TO TRADE WITH CANADA INDUSTRY SPECIFIC CLUSTER DEVELOPMENT IS ESSENTIAL FOR FURTHER DEVELOPMENT 4
Why Canada? Significant Trading Partner: -2 nd largest export market -4 th largest import market $3bn US-Canada bilateral trade 2011 Total trade $557 Billion California 6.0% Texas 5.9% Arizona 0.5% Source: US Census Bureau Foreign Trade Cultural & economic fit: Tourism Investment Trade Other 87.6% Canadian-owned companies employ 13,156 people in 736 locations in Arizona! Source: Industry Canada Trade Data Online 5
Canadian Provinces Total Population is 34.1million the majority of whom live near the US border 2011 Canada GDP growth at 2.3% Metro populations (2011): Toronto ~5.6m Montreal ~3.8m Vancouver~2.3m Ottawa ~ 1.2m Calgary ~1.2m Edmonton ~1.2m Population: 26.62% GDP Growth: 3.63% Population: 66.67% GDP Growth: 1.75% 6
Trade between Arizona and Canada Total Values ($ Millions) 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Trade Trends 1,546 1,566 1,401 1,383 1,182 1,202 1,363 1,216 1,055 895 2007 2008 2009 2010 2011 AZ Exports to Canada AZ Imports from Canada % of Total Exports by Region - 2011 British Columbia 11% Alberta 12% British Columbia 12% Quebec 14% Others 9% Alberta 8% Quebec 23% Ontario 45% % of Total Imports by Region - 2011 Others 4% Ontario 62% Source: Industry Canada Trade Data Online 7
AZ Exports to Canada - 2011 Aerospace products and parts Navigational, measuring, medical and control instruments Automobile and light-duty motor vehicles Computer and peripherals Agricultural products British Columbia Alberta $32M $24M Ontario $73M Quebec $159M Source: Industry Canada Trade Data Online $41M $24M $24M $27M $43M 8
AZ Imports from Canada-2011 Aerospace products and parts Navigational, measuring, medical and control instruments Automotive Commercial and service industry machinery Wood and wood products British Columbia $41M Alberta Ontario Quebec $52M $26M Source: Industry Canada Trade Data Online $140M $41M 9
Canadian Metro Landscape Vancouver Calgary/Edmonton Toronto Montreal Digital Media Energy Aerospace Aerospace Mining Utilities Finance Life Sciences SURE Cluster Technology Automotive Technology 10
Canada - Aerospace Landscape Atlantic Canada 5.6% Western Canada 13.6% Ontario 28.9% Quebec 51.9% Vancouver Edmonton Calgary Toronto Aircraft assembly & engine manufacturing Montreal Aircraft parts manufacturing & systems development Robotics, navigation systems & MRO Helicopter services, training centers & design Source: Deloitte Profile of the Canadian Aerospace industry 2010 Canadian aerospace revenue by region Avionics 4.7% Simulation & Training 5.1% Aircraft Engines 13.8% Other 4.6% Aircraft MRO- 19.2% Space 3.4% Aircraft 49.2% Canadian aerospace revenue by subsectors 11
Aerospace: Bilateral Trade $400 mm $120 mm $55 mm Honeywell leading supplier of Avionics, Propulsion Systems and APUs in Bombardier s product line. Booming Asian Aerospace industry strengthens this relationship Increased trade & collaboration 12
Aerospace Action Plan Goal Utilize academic institutions to attract and retain top aerospace firms Academic Competitive Advantage Institute Core Competencies Opportunities Aerodynamics and Fluid Mechanics, Helicopter Electromagnetics, Control Systems, Combustion Dynamics, Aeronautical Management Technology Companies Research Institute Education Industrial Association 13
Canada Energy Industry Landscape Renewable Energy Source: Calgary Economic Development : Sustainable and Renewable Energy. Source: Canadian Centre for Energy Information 14
Epcor s $470mm Investment in AZ Diversified electricity and water services provider headquartered in Edmonton, Alberta Wholly-owned by the City of Edmonton for over 100 years Strategy: Pursue rate regulated and long term contracted investment opportunities Acquired Chaparral City Water Company Source: EPCOR Utilities Inc.: Investor Presentation-Feb 2012 15
Capital Power Opportunity Solar Sales in the valley are rising and investment is increasing Epcor has a minority interest in Capital Power Opportunity for Capital Power to expand Energy (Solar) presence in the valley Solar special use permit anticipated to be filed Q1-2012 Capital Power s Operations and growth focus on four energy sources: Western Canada Ontario 49% 36% 14% Source: Capital Power Corporation: Investor Meetings-Stuart Lee, SVP Finance & CFO. January, 2012 EXPLORING DEVELOPMENT Pacific Northwest US Southwest Plants in operation Plants under construction or development US Northeast Mid- Atlantic US 16
Renewable Energy Action Plan AZ Solar Industry: $2bn, 16K jobs Growth - 333% v/s 109% US avg. Additional 2,100 jobs; more than $1 billion invested since 2010 Aggressively promote renewable energy target of 15% by 2025 Strengthen associations like AriSEIA major competitive advantage Source: Phoenix Business Journal 17
Summary Western Canada Eastern Canada Focused on Tourism & Investment Top trading industry: Agriculture Opportunity to promote & partner in clean energy growth focus High value trading partner Top trading industry: Aerospace & Equipment manufacturing Consider: Supplier database for Aerospace & research partnership with Institutions Partnership with industry clusters, trade associations & Economic Development Committee's is vital 18
Important Observations Establish working relationships with Economic Development Committee's in major Canadian metros Ensure that industry clusters in key Canadian cities are aligned to those in AZ Infrastructure must support these clusters 19
THANK YOU FOR YOUR TIME CONSULTANTS: EDWARD MATLOUB Q & A MATT WILLIAMSON FIKRE GURJA SAMPAD DAS YUTAKA OYAMA ROHAN VERMA 20