Mon, Nov 09 2009
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Published June 25, 2008 06:32 pm - Help for Ashtabula County’s economy is coming from north of the border. Exchange-rate shift makes us attractive to Canadian investors By CARL E. FEATHER - Lifestyle Editor - cfeather@starbeacon.com Star Beacon Help for Ashtabula County’s economy is coming from north of the border.
Earlier this month, Growth Partnership (GP) for Ashtabula County announced that Pickens Plastics, which has factories in Ashtabula and Jefferson, was purchased by Sigma Industries of Quebec City, Quebec, Canada, for an undisclosed amount. Pickens has 60 employees whose jobs have been secured by the sale, which has the potential of adding more jobs in the years to come, according to Growth Partnership. The following day, GP announced the pending sale of NEO Plastics in Austinburg to RTS Cos. (U.S.) Inc. NEO, which filed for Chapter 11 bankruptcy Feb. 21, 2007, was a supplier for RTS, based in Waterloo, Ontario, Canada. According to a GP news release, RTS has been producing items at Austinburg for the last month. The sale is expected to retain 19 existing jobs at the former NEO site. Joseph Mayernick, executive director of GP, said in a news release that RTS will be creating new positions and expanding the footprint of the former NEO plastics building. “If all goes according to plan RTS will move ahead quickly with its expansion plans, thus adding more dollars to our economy,” Mayernick says. “This entire process represents another save for Ashtabula County, but more importantly, a new investment from a Canadian company which is well respected with substantial abilities to add to the plant and to the county over the years.” The Canadians’ interest in Ashtabula County reflects a trend in the global marketplace driven primarily by a weak U.S. dollar. American assets traditionally were priced beyond the reach of the Canadian dollar, which once traded as low as 62 cents. “The price of the assets being purchased (in the U.S.) have come down very considerably,” says Bernie Wolf, director of the International MBA program at Schulich School of Business, York University, Toronto. The more favorable exchange rate means Canadian investors get more for their money, both in the initial purchase and operating costs. “They can produce at a lower cost in terms of the exchange rate here,” says Jay Foran, vice president of business attraction for Team NEO in Cleveland, in explaining the imminent factor in the Canadians’ interest in northeast Ohio industry. Foran says another factor is that the United States is typically the largest market for these Canadian firms and setting up shop here places them closer to their customers. According to the Society of the Plastics Industry, Canada tied Mexico as the top export destination for U.S. plastics, 24 percent. However, 33 percent of imported plastics came from Canada that year. Foran says the capable workforce in northeast Ohio is another actor and one cited by Mike Panayi, a partner with RTS. In the GP news release, Mayernick quotes Panayi as saying “We have come to realize Ashtabula County offers a quality workforce. We believe that our acquisition of the assets at 2900 Industrial Road will be a win-win situation for all involved – the region, the workers and RTS Companies (U.S.) Inc.” Wolf feels this cross-border investment, which has been going on for years in the opposite direction, is “most likely beneficial” to both economies. Not everyone views foreign investment as win-win, however. Alan Tonelson, a research fellow with the U.S. Business and Industry Council Educational Foundation in Washington, D.C., says the sales illustrate the weakness of the American economy. 
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