Click chart for enlargement

c-01399.jpg (32565 bytes)

c-01400.jpg (32803 bytes)

 

 

outlook.jpg (3546 bytes)

  • Value of manufacturing shipments expected to rise.
  • Volumes of newsprint, fish landings and refined petroleum forecast to rise.
  • Growth will be export driven, aided by weakness in the Canadian dollar vis-à-vis the US dollar.
  • Continued benefit from industrial/marine fabrication and technology oriented manufactures.
     

Marystown Shipyard - Friede Goldman Newfoundland Limited

Export Driven

Manufacturing

The value of manufacturing shipments increased by 6.1% in 1998 to reach a record $1.76 billion. Growth would have been stronger had it not been for a strike in the newsprint industry. Newsprint typically accounts for 25% to 35% of shipments. Manufacturing has performed well in recent years due to strong performances from its dominant components; fish, refined petroleum and paper products. Since 1992, shipments have grown at an average annual rate of 5.4%. Manufacturing employment, while dropping slightly last year, has in recent years been buoyed by a recovery in fish processing.

A conducive business environment has helped foster growth and diversification in the Province's increasingly high-tech, export oriented manufacturing sector. An emerging example of this diversification is Newfoundland Bonding and Composites (NB&C) which has begun construction on a $20 million aerospace airframe manufacturing facility located in Gander. The company has secured a $13 million contract to manufacture parts such as body panels, fairings and ducting for Canada's newest search and rescue helicopter, the Cormorant. The company has hired its first employees and aims to provide 250 high-tech jobs within five years.

There are a number of factors helping to enhance the business climate for manufacturers in the Province. These include the availability of world class research, training facilities that offer technical support and expertise through industrial outreach programs, and low costs (see KPMG, Section). Fiscal incentives include the lowest corporate tax rates for manufacturing and processing in the Country, exemptions from municipal tax assessment, and research and development tax credits for manufacturers. Furthermore, the combined federal-provincial Harmonized Sales Tax (HST) allows businesses full input tax credits. Also, since the inception of the EDGE program in 1995, 35 manufacturing and processing companies have obtained EDGE status.

 

Company Profile

Poised for Offshore Opportunities

Friede Goldman Newfoundland Limited (FGN) assumed official control of the assets of the Marystown shipyard January 1, 1998. Since that time the amount of work executed at the yard has exceeded expectations and the requirements set out in the takeover deal.

Employment at the yard averaged 817 during 1998 with work peaking upon completion of two tugs for Newfoundland Transshipment Limited and fabrication of columns and pontoons for Noble Drilling's EVA projects. The owners assumed control of the yard with an obligation to provide 1.2 million hours of work per year. Actual hours totaled about 1.7 million with a payroll in excess of $38 million. FGN was also obligated to invest between $5 and $15 million over five years in capital equipment; actual investment in 1998 was about $8 million.

A decision to cancel the contract to refit the Transocean Explorer, a rig that was expected to do the initial drilling on the Terra Nova field, will impact FGN's 1999 business plan. Nevertheless, the company is committed to meeting its business targets including the provision of 1.2 million hours of work. FGN is now an integral component of a much larger international company whose broad focus includes the design, building, and repair of offshore structures. As a result, the Marystown shipyard is now strategically placed to capitalize on offshore activity both locally and internationally.

 


Contents Previous Next