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At the Center of the

ChemicalMarketplace

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Ontario—where all the business lights are bright ..........2Ontario is a large local market, part of NAFTA and the 3rd biggest

exporter of goods to the U.S. And after Michigan, we’re North

America’s biggest vehicle producer.

Ontario—Canada’s biggest chemicalproducer ................................................5More than half the chemicals made in Canada come from

Ontario. The manufacture of chemicals and chemical products

is our 4th largest industry.

Ontario has a skilled, available workforce ....8Ontario’s 25 colleges and 17 universities provide top-notch graduates.

They’re just the front line of a superb workforce.

In the midst of the biggest markets .....................12Southern Ontario is in the middle of the most concentrated business

and consumer markets in the U.S. and Canada—one day’s drive from

half their population and manufacturing activity.

In Ontario, lower costs mean better investmentreturns ..................................................................15

Ontario has outstanding cost advantages when you take into account

transportation, salaries, the publicly funded health program, corporate

taxation and research and development.

The right conditions for success ................................19Ontario has a “critical mass” of existing chemical facilities, support services,

assured feedstock supplies, reliable electricity and transportation links

integrated into U.S. networks.

Ontario—a great place to live and work ......................23Then there’s our Canadian quality of life—judged the best for 7 years in a row by

the United Nations. Enjoy everything from wilderness lakes to first-run musicals

and major league sports.

Ontario works. And it will work for you.

1CHEMICAL MARKETPLACE

At the center of the chemical marketplace

Cover: Styrene unit, NOVA Chemicals

(Canada) Ltd., Sarnia, Ontario

Unless otherwise specified, all

figures are in current U.S. dollars

for the year cited.

Ontario is a strong, seasoned player in the global economy, with customers and

connections worldwide.

Ontario also constitutes a large local market with more than one-third of

Canada’s 30 million people (90% of whom live in southern Ontario), and with

more than 40% of Canada’s GDP in 1999.

Ontario has a big appetite for chemical products because we are Canada’s

production center. In 1999, Ontario produced 56% of Canada’s manufactured

goods. Interestingly, almost a quarter of that output is transportation equipment.

In fact, next to Michigan, Ontario is the largest motor vehicle producer in North

America—and a huge consumer and producer of vehicle parts made from

materials produced by chemical companies.

Ontario is also part of NAFTA, one of the most powerful trading blocks in the

world. In fact, we are the world’s 3rd biggest exporter of goods to the United

States, just behind Canada as a whole, and Japan. In 1999, Ontario’s U.S. exports

totalled US$123 billion.

2 CHEMICAL MARKETPLACE

Ontario—where all the businesslights are bright

Ontario

U.S.

Canada

FranceGermany

Italy

U.K.Japan

Forecast GDP growth for 2001: Ontario vs. the G-7

Source: Ontario Ministry of Finance, Ontario Economic Outlook and Fiscal Review, December, 2000Average annual per cent

0.5 1.0 1.5 2.0 2.5 3.0 3.5


SELECT CHEMICAL

MANUFACTURERS

IN ONTARIO

Air Products Canada Ltd.2090 Steeles Avenue EastBrampton, Ontario L6T 1A7CanadaTel: (905) 791-2530Fax: (905) 791-6808Products: Industrial gases,nitrogen, oxygen, hydrogen

Akzo Nobel Chemicals Ltd.1 City Centre Drive, Suite 320Mississauga, Ontario L5B 1M2CanadaTel: (905) 273-5959Fax: (905) 273-7339Products: Fatty acids, glycerin, surfactants

Albright & Wilson Americas Limited2070 Hadwen RoadMississauga, Ontario L5K 2C9CanadaTel: (905) 403-0011Fax: (905) 403-2232Products: Sodium phosphates, pyrophosphates, meta-phosphate

AOC Canada Ltd.38 Royal RoadGuelph, Ontario N1H 1G3CanadaTel: (519) 821-5180Fax: (519) 821-0123Products: Allyl polyesters, phenolicresins, pigments, paper sizes

Ashland Canada Inc.2620 Royal Windsor DriveMississauga, Ontario L5J 4E7CanadaTel: (905) 823-1800Fax: (905) 823-5293Products: Phenolic resins, solvents

AT Plastics Inc.134 Kennedy Road SouthBrampton, Ontario L6W 3G5CanadaTel: (905) 451-1630Fax: (905) 451-0039Products: LDPE resins, EVA and EVS copolymers

The world comes to Ontario to do business. Hundreds of major corporations,

both Canadian and foreign-based, have located here. Toronto, Ontario’s capital, is

Canada’s financial center. It’s also home to the head offices of the country’s major

banks and insurance companies.

Ontario is a superb location for chemical producers because it supports research

and development and is a technological leader. And technology makes us more

efficient. From 1988 to 1996, labor productivity in industrial chemicals in Canada

increased significantly compared to almost all other major producing countries.

So have profits. In the past 10 years, the profit rate in industrial chemicals in

Canada has jumped above the rate in the U.S.

The Ontario government is also vitally interested in the health of the business

sector. It has passed legislation to increase the competitiveness of the construction

industry and to lower building costs. It has restructured the electricity sector to

increase competitiveness. It has also eliminated 1,500 regulations that hindered

business, created a fast track for approvals for industrial development and cut taxes

166 times since June, 1995.

Next to Michigan, Ontario is the largest motor vehicle

producer in North America—and a huge consumer and

producer of vehicle parts made from materials produced

by chemical companies.

Ontario government responds to business

• Froze rates and deregulated electricity

• Streamlined regulations

• Improved competitiveness in construction industry

• Shortened approval times for permits

• Cut taxes (166 to date)

• Balanced budget


The province also has the infrastructure that chemical companies need in order

to flourish. Besides the existing petrochemical and oil-refining facilities with their

support services, there are assured, economic feedstock supplies and reliable

electricity; and rail, road, air and water links are fully integrated into U.S.

networks.

Government is co-operative, too. Ontario’s government is stable and

progressive, and understands what business needs to succeed. It is delivering

the fiscal restraint and regulatory reform required to provide for that success.

And Ontario is consensus-oriented. Legal costs are lower here because Canada

is less litigious than the U.S. In recent years, tort-related spending as a

percentage of the GDP has run more than 2% in the U.S.—compared to less than

1% in Canada.

Environmental permitting in Ontario is fast and efficient. An application for

industrial development will be processed within 6 months. The wait in other

jurisdictions is up to 2 years.

Ontario, the birthplace of Responsible Care®

Ontario is the birthplace of Responsible Care®, the chemical industry’s global

initiative to ensure the safe and environmentally sound management of products

and processes. Another responsibility initiative, Responsible Distribution®

ensures safe movement of products.

In Ontario, we support business.

Ontario is the world’s 3rd biggest

exporter of goods to the United States.

Bartek Ingredients Inc.421 Seaman StreetStoney Creek, Ontario L8E 3J4CanadaTel: (905) 662-8830Fax: (905) 662-8849Products: Fumaric acid, maleic anhydride, malic acid

Basell Canada Inc.201 City Centre Drive, Suite 900Mississauga, Ontario L4B 2T4CanadaTel: (905) 273-8800Fax: (905) 273-3170Products: Polypropylene resins

BASF Canada Inc.345 Carlingview DriveToronto, Ontario M9W 6N9CanadaTel: (416) 675-3611Fax: (416) 674-2588Products: Plasticizers, polyamides, SB-latex

Bayer Inc.77 Belfield RoadEtobicoke, Ontario M9W 1G6CanadaTel: (416) 248-0771Fax: (416) 248-6985Products: Butyl, chlorinated, brominated, nitrile rubbers; polybutadiene; tungsten carbide; nickel hydroxide

Borden Chemical Canada 105 Drury St.North Bay, Ontario P1A 3Z7CanadaTel: (705) 497-3772Fax: (705) 474-8979Products: Urea formaldehyde resins

Cabot Canada Ltd.800 Tashmoo AvenueSarnia, Ontario N7T 7N4CanadaTel: (519) 336-2261Fax: (519) 339-8273Products: Carbon black


It all began during the Second World War with the need for synthetic rubber.

Today, 23 of the 25 largest chemical companies in the world are in Ontario. There

are 5 refineries and 19 chemical plants in the Sarnia complex. Eastern Ontario is

home to a smaller cluster of chemical plants. In addition, there is the specialty

chemical industry centered in the Greater Toronto Area.

Into Sarnia come feedstock pipelines from eastern, western and southern

sources. Under Sarnia, natural gas and feedstocks can be stored in more than

60 caverns in the vast salt deposits that lie just 2,000 feet below the surface.

The manufacture of chemical products is Ontario’s 4th largest industry. Chemical

products are used in Ontario’s huge vehicle parts industry, in the fast-growing

plastics industry, in Ontario’s telecommunications and technology-based

industries, and in the manufacture of pharmaceuticals—just to name a few.

They are also key to the pulp and paper, forestry and mining industries. In

Northern Ontario, where there are global concentrations of these industries, such

essential chemicals as bleaching agents and adhesives are locally produced.

Ontario—Canada’s biggestchemical producer

Canada’s chemical industry, value added in %

Industrial Chemicals45.0%

Pharmaceuticals19.4%

Other15.6%

Cleaning4.8%

Agrochemicals9.7%

Paints5.5%

Source: Statistics Canada, 1997


Ontario accounts for more than half of all the chemicals (55.8% in 1997) produced

in Canada. Our annual shipments of more than US$11.6 billion in chemical

products represents approximately 7% of all our manufacturing shipments.

And the demand for Ontario chemicals continues to grow. Exports are estimated

to more than double to US$6.3 billion in 2000 from US$2.8 billion in 1993, an

annual compound growth rate of 12.3%. In comparison, the increase in the rest

of Canada was only 7.5%.

0 1 2 3 4 5 6 7

Ontario’s chemical exports in US$ billion

1997

1998

1999

2000

1996

1995

1994

1993

* Estimated figureSource: Statistics Canada, 2000

*

The chemical industry in Ontario

Value of all shipments in 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .US$11.6 billion

Total employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47,000

Number of firms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .631

CAGR* in markets from 1986-1996 . . . . . . . . . . . . . . . . . . . . . . . . . . .2.7%/year in Can$

CAGR* of industry compared to overall manufacturing growth rate . . . . . . .1.5 times

Exports in 2000 (estimated) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .US$6.3 billion

* Compound Annual Growth RateSource: Statistics Canada, 2000

Chemicals are important to Ontario now, and will become moreimportant in the future.

Today, 23 of the

25 largest chemical

companies in the

world are in

Ontario.


Raw materials produced in Ontario:

2-methyl-2-buteneAcetyleneAcrylic latexAdipic acidAmmoniaAnthraceneAntioxidantsAlkylaminesBenzeneButanesButyl rubberCalcium chlorideCarbon blackCausticChlorineCholine chlorideCholine specialtiesCyclohexanolC5+ condensateC9 resin oilDicyclopentadiene (DCPD)Epoxy resinsEthaneEthyleneEthanolEthoxylatesFatty acidsFatty acid saltsHydrogen peroxideHalobutyl rubberHydrogen, gaseousHydrogen, liquidHydrochloric acidIso-amyleneIsopreneIsoprene rich C5 streamIsopropyl alcoholLube additivesMaleic acidMaleic anhydrideMethyl aminesMixed C4s

Mixed toluene and xylenesModified polymersMono and dimethylformamideNaphthalenesNickel hydroxideNitric acidNitrile butadiene rubberNitric acidNitrogenNitrogen oxideNoneneParaffinsPET resinsPhosphoric acidPiperylenesPolybutadiene rubberPolyethylene (HD)Polyethylene (LD)Polyethylene (LLD)PolyolefinsPolypropylenePolystyrenePolyvinyl chloridePropanePotassium hydroxidePropoxylates PropyleneSoda ashSodium chlorate Sodium phosphatesSodium silicate products SolventsStyreneSulphurSulphuric acidSulphatesSulphonatesTall oil fatty acidsTolueneTungsten carbideUreaXylenes

Source: Sigurdson & Associates, 1998

Chinook Group Limited25 King Street WestToronto, Ontario M5L 1E2CanadaTel: (416) 363-6045Fax: (416) 363-5160Products: Choline chloride, methylamines, dimethylformamide

Ciba Specialty Chemicals Canada Inc.Additives Division7030 Century AvenueMississauga, Ontario L5N 2V8CanadaTel: (905) 812-7280Fax: (905) 821-8466Products: Plastic additives, pigments, stabilizers

Colgate-Palmolive Canada Inc.99 Vanderhoof AvenueToronto, Ontario M4G 2H6CanadaTel: (416) 421-6000Fax: (416) 425-9320Products: Detergents, bleaches, disinfectants

Commercial Alcohols Inc.2 Chelsea LaneBrampton, Ontario L6T 3Y4CanadaTel: (905) 790-7500Fax: (905) 790-7700Product: Ethanol

CXY Chemicals Canada99 Thomas RoadAmherstburg, Ontario N9V 2Y9CanadaTel: (519) 736-6445Fax: (519) 736-7103Product: Sodium chlorate

Cytec Canada Inc.9061 Garner RoadP.O. Box 240Niagara Falls, Ontario L2E 6T4CanadaTel: (905) 356-9000Fax: (905) 374-5879Products: Specialty chemicals


Ontario has a skilled, availableworkforce

We live in a smarter world, a world where a Ford Taurus has more computing

power than the Apollo 11 that put humans on the moon, and where 42% of

Ontario’s production and non-supervisory employees use computers.

Unfortunately, there’s a problem.

“Finding an adequate supply of qualified employees is the number one issue for

American industry today,” says Earnest Deavenport, CEO of Eastman Chemical

and Chair of the U.S. National Association of Manufacturers. He was

commenting on a NAM survey of 4,500 U.S. manufacturers that said 88% were

experiencing a shortage of qualified workers in at least one job category.

In Ontario, chemical companies have access to a big, smart workforce of

6 million. Thanks to a good public education system, it’s a workforce that has the

required skills. In a manufacturing world where all employees have to consult,

communicate in teams, input into and work with computers, charts, reports,

forms and manuals, Ontario’s skilled workers meet the challenge.

The Canadian industrial chemicals industry has had a stellar performance in labor

productivity growth, averaging an annual growth rate of over 5% from 1988 to 1996.

In the same period the U.S. industry averaged only 2.6% growth per year.

0

50

100

150

200

Germany**U.K.FranceJapanU.S.Canada

1988 1996

Labor productivity* in industrial chemicals

* Value added per worker. **1995Based on 1992 US$ (Thousands) Source: 1998 STAN Database, OECD


The education didn’t stop after high school. Sixty percent of Ontario’s 1999

workforce had some post-secondary education. Twenty percent were university

graduates; 30% were college graduates.

And there are more graduates “in the pipeline.” In 1999, enrollment numbers

included the equivalent of 248,705 full-time undergraduates and graduates in

Ontario’s 17 universities, and the equivalent of 170,625 full-time students in the

province’s 25 community colleges of applied arts and technology. (The Ontario

government is committed to doubling the enrollment in computer sciences and

high-demand engineering programs.)

The community colleges can be critical to chemical industry success. For

example, Lambton College in Sarnia offers special courses in the chemistry of

polymers and synthetic rubbers. It also provides training modules for plant

operators and more than a dozen courses, such as Chemical Engineering

Technician, Computer Engineering Technology and Instrumentation, and Control

Engineering Technician.

Not only does Ontario have the qualified workers today, it also has the leaders

of tomorrow.

According to the Gourman Report, Ontario has 2 of the top 10 chemical

engineering schools in North America—the University of Toronto and McMaster

University in Hamilton. A 3rd top-10 chemical engineering school—McGill

University—is right next door in Montreal.

Almost 3 out of

10 employees of

the Canadian

chemical industry

have, at the

minimum, a

university degree.

Ontario has 2 of

the top 10 chemical

engineering

schools in North

America.

In addition to being skilled and educated, Ontario’s workforce is also loyal and

steady. In 1999, job tenure in Ontario averaged 9 years for manufacturing

workers. In a 13-country study, Canadian employees ranked 1st for commitment.

Finally, Ontario workers are among the hardest working in North America. On

average, less than 4% of time worked in Ontario is lost to absenteeism.

Help wanted? Come to Ontario.


“As an industry, the 14

companies in Sarnia’s

industrial complex have to

replace 50% of their

process and mechanical

staff in the next 10 to 20

years. So, Lambton College

and industry pooled their

resources to develop a

Process Operator Co-op

Program. The college

provides the academic

training and the industry

provides the practical

training. Existing process

workers will also be able to

take advantage of some of

these courses to help keep

their own knowledge

current. A similar model

will be developed soon for

trades and maintenance

workers. The program has

taken off. The students are

excellent, enrollment is

increasing dramatically

every session, and people

from elsewhere—for

example, Baytown,

Texas—have even come here

to study what we’re doing.”

- Volker Leyerzapf,

Sarnia Site Manager,

Imperial Oil Products &

Chemicals Division

Source: 1997 Gourman Report on University Education in North America

Gourman report‘s top 10 chemical engineering schools

Rank in North America University Score

1 Minnesota 4.91

2 Wisconsin-Madison 4.90

3 McGILL 4.88

4 Berkeley 4.88

5 Stanford 4.82

6 California Institute of Technology 4.82

7 UNIVERSITY OF TORONTO 4.81

8 Delaware 4.80

9 MIT 4.79

10 McMASTER 4.73


Serving the chemical industry

Here are some examples of how Ontario’s colleges of applied arts and

technology gear themselves to the needs of the chemical industry:

1. Uniroyal Chemical wanted to train staff in the approved methods of insulating

pipelines and tanks. Lambton College in Sarnia provided an instructor to teach

one day a week on-site for a year.

2. Lambton College has helped Bayer Rubber train 35 electrical tradespeople in

instrumentation mechanics and 35 instrumentation tradespeople in industrial

electrical mechanics. Bayer arranged to have the training on-site and at the

college.

3. Dow Chemical has engaged Lambton College to provide a 3-year version of

the instrument and electrical training program for staff. The course is now an

approved Ontario government apprenticeship program.

4. In eastern Ontario, DuPont Canada has worked with St. Lawrence College in

Kingston and Loyalist College in Belleville to conduct pre-qualification courses

for maintenance mechanics apprentices and teach specialized courses for

employees in welding, pipe fitting, pump maintenance and sheet metal

bending. DuPont also has sent employees to Lambton College for specialized

training.

5. In Kingston, KoSa Kingston Inc. and St. Lawrence College in 1999 designed

and conducted a 250-hour manufacturing production operator’s training

course. Instructors taught on-site and in the college’s classrooms.

In most of these cases, chemical companies took advantage of Ontario’s

apprenticeship training partnership. Employers pay for workplace training and

the government pays for administration and the in-school cost of the program.

Degussa-Huls Canada Inc.4261 Mainway DriveP.O. Box 5097Burlington, Ontario L7R 3Y8CanadaTel: (905) 336-3423Fax: (905) 332-5632Products: Hydrogen peroxide,colorants, biocides, catalyst

Diversey Lever Canada2401 Bristol CircleOakville, Ontario L6H 6P1CanadaTel: (905) 829-1200 Fax: 1-800-765-2921Products: Surfactants, detergents,lubricants, disinfectants

Dominion Colour Corporation 515 Consumers Road7th FloorNorth York, Ontario M2J 4Z2CanadaTel: (416) 791-4200Fax: (416) 497-5198Products: Pigments, colors

Dow Chemical Canada Inc.1086 Modeland RoadSarnia, Ontario N7T 7K7CanadaTel: (519) 339-3131Fax: (519) 339-3824Products: Polyethylene, polystyrene,acrylonitrile copolymers, chlorinated polyethylene, epoxies, solvents, VCM, ethylene glycol, chlorine, caustic,ethylene styrene interpolymer (ESI)

DuPont Canada Inc.P.O. Box 2200Mississauga, Ontario L5M 2H3CanadaTel: (905) 821-3300Fax: (905) 821-5230Products: Engineering polymers, nylon resins, solvents, refrigerants


Customers feel better when suppliers are “just down the road.”

And that’s where Ontario is. A shipment for Tennessee? From southern Ontario,

that’s same-day delivery. Chicago? Even better. We’ll leave the Sarnia chemical

complex early and be there for lunch. Detroit? See you in an hour.

In actual distances, Sarnia is 344 miles from the Chicago market. Houston, on the

other hand, is 1,100 miles from the Chicago market.

In terms of geography and trade, Ontario is well positioned. It’s part of NAFTA. It’s the

3rd largest trading partner of the U.S., and it’s integrated into the US$10.4 trillion

North American market, with access to 402 million people.

More than 50% of that population and 50% of the manufacturing activity in North

America is within a day’s drive of southern Ontario. It’s an affluent consumer

sales territory. Thirty-seven percent of all U.S. and Canadian personal income is

concentrated within that day’s-drive circle—US$2.8 trillion.

It’s an area that’s hungry for chemical products. North America’s major

automotive and auto parts manufacturers in Michigan and the “Golden

Horseshoe” around the western end of Lake Ontario are less than 100 miles

from the chemical plants in the Sarnia complex.

The packagers are close by, too. Southern Ontario is at the center of North

America’s manufacturing heartland, where goods are produced and packaged.

In fact, 60% of North America’s market for plastic resin is within 500 miles of

Ontario’s Sarnia complex.

This proximity to major customers cuts transportation costs and gives Ontario

chemical producers a 1.5 cents-per-pound advantage over producers in Texas

and Louisiana.

Elf Atochem Canada Inc.Chemical Specialties Division700 Third LineOakville, Ontario L6J 5A3CanadaTel: (905) 827-9841Fax: (905) 827-7913Products: Lubricants, additives, detergents

Ethyl Canada Inc.5045 South Service Road, Suite 101Burlington, Ontario L7L 6M6CanadaTel: (905) 631-5470Fax: (905) 631-5479Products: Additives (fuel and lube oil)

Henkel Canada Limited2290 Argentia RoadMississauga, Ontario L5N 6H9CanadaTel: (905) 542-7550Fax: (905) 542-7566Products: Additives, antioxidants,surfactants

Hercules Canada Inc.3451 Erindale Station RoadMississauga, Ontario L5C 2S9CanadaTel: (905) 848-1800Fax: (905) 279-0020Products: Defoaming agents,dispersants, resins, flocculants

H.L. Blachford Ltd.2323 Royal Windsor DriveMississauga, Ontario L5J 1K5CanadaTel: (905) 823-3200Fax: (905) 823-9290Products: Additives (lubricant andplastics), stabilizers

Huntsman Corporation Canada Inc.256 Victoria Road SouthP.O. Box 450Guelph, Ontario N1H 6K8CanadaTel: (519) 824-3280Fax: (519) 824-8572Products: Surfactants, sulphonates, ethoxylates, propoxylates

In the midst of the biggestmarkets


Chemical producers should also remember that Ontario itself is a significant

market. More than one-third of Canada’s 30 million people live in Ontario,

90% of them in southern Ontario.

Proximity to markets is a big advantage. Also important is Ontario’s secure

access to competitively priced feedstocks from western Canada and the United

States. And the reversal of Line 9 (Sarnia to Montreal Pipeline) of the

Interprovincial Pipe Line system also means southern Ontario can now receive

competitively priced feedstocks from the Maritime provinces, South America,

Europe and the Middle East via pipeline from Montreal on the St. Lawrence

River.

Ontario is at the center of the market. Make it the center of your attention.

Driving times from Sarnia, Ontario

To: Miles Hrs: mins. from Sarnia

Detroit, MI 65 1:02

Toronto, ON 177 3:10

Buffalo, NY 208 3:37

Chicago, IL 344 5:25

Pittsburgh, PA 349 5:45

Indianapolis, IN 378 5:53

Washington, DC 587 9:43

New York City, NY 603 10:24

Source: Autopilot Highway Trip Routing System

More than 50% of the population and 50% of the

manufacturing activity in North America is within

a day’s drive of southern Ontario.

ICI Canada Inc.2600 Steeles Avenue WestConcord, Ontario L4K 3C8CanadaTel: (905) 738-7322Fax: (905) 738-8892Products: Surfactants, polyurethanes

Imperial Oil, Products & ChemicalsDivision (Exxon)111 St. Clair Avenue WestP.O. Box 4029, Station "A"Toronto, Ontario M5W 1K3CanadaTel: (416) 968-4636Fax: (416) 968-4850Products: HDPE, LDPE, ethylene,propylene, heptene, BTX, solvents

JemPak Canada Inc.404-100 York Blvd.Richmond Hill, Ontario L4B 1J8CanadaTel: (905) 889-5100Fax: (905) 889-9381Products: Stearates, sulphonates,detergent intermediates

Kodak Canada Inc.3500 Eglinton AvenueToronto, Ontario M6M 1V3CanadaTel: (416) 766-8233Fax: (416) 766-5814Products: PET (polyethylene terephthalate) resins

KoSa Kingston Inc.P.O. Box 2800, Highway 33Kingston, Ontario K7L 4Z8CanadaTel: (613) 389-2210Fax: (613) 389-3223Products: PET (polyethylene terephthalate) resins


Ottawa

Kingston

New York

Baltimore

Chicago

(480 miles)

(720 miles)

Atlanta

Boston

Ontario and the Eastern U.S. Market

Sarnia

ONTARIO

Washington

Detroit

Buffalo

PhiladelphiaPittsburgh

(240 miles)

Indianapolis

Thunder Bay

Sault Ste Marie

London

Kitchener/Waterloo

BramptonMarkham

MississaugaHamilton

SudburyNorth Bay

Toronto

Windsor


In Ontario, almost everything costs less, especially the major manufacturing

cost—labor.

Throughout the 1990s our manufacturing unit labor costs fell relative to those in

the United States when the exchange rate was taken into account.

A big reason for the difference is salary. The U.S. average starting salary for a

chemical engineer is higher than in Ontario.

“I can hire a Ph.D. in Canada for about the cost of hiring a B.Sc. graduate in the

U.S., so we do a lot of our development work in Canada because of that factor,”

says one chemical firm president.

Then there are the benefits. When wages, which include salaries and all

benefits, are taken into account on a common currency basis, an Ontario

chemical company has a cost advantage over a U.S. plant. Ontario

manufacturing wages are especially attractive. In the neighboring states, wage

rates can run almost 60% higher than in Ontario.

Engineer and technician–annual median base salary $US

City Chemical engineer Chemical technician

Sarnia, ON 47,403 28,039

Kingston, ON 47,873 28,216

New Orleans, LA 62,955 32,110

Charleston, WV 62,339 31,974

Baton Rouge, LA 63,748 32,974

Corpus Christi, TX 63,140 32,265

Houston, TX 67,034 35,481

Wilmington, DE 67,685 35,703

Exchange rate 0.677504: Source: Bank of Canada via CANSIM

An Ontario company

plant has a cost

advantage over

a U.S. plant of

40% for managers

and up to 50% for

research scientists.

In Ontario, lower costs meanbetter investment returns

Source: ERI, Economic Research Institute, Redmond, WashingtonEffective date of estimates: 1 January 2000

Chemical Researchers: The Cost Differential

Source: Sigurdson & Associates, Opportunites Identification for Specialty & Formulated Chemicals in Ontario, June 1998

On

tari

o

Ger

man

y

U.K

.

U.S

.

Jap

an

80

120

100

140

Health insurance costs play a big role in this. Manufacturers in the U.S. pay

considerably more per employee for the kind of health care coverage provided

by Canada’s publicly supported system. Ontario employers pay approximately

US$540 per employee in Employer Health Tax.

Ontario’s non-profit workplace safety and insurance system is also less litigious

and less costly than U.S. systems.

Large manufacturers (public, private or foreign-owned)

In-house R&D expenditure Non-R&DR&D expenditure at an Ontario research institute (see note 1) expenditure

Gross expenditure $100.00 $100.00 $100.00Ontario – 20% OBRITC (see note 2) (20.00) (16.00)Federal ITC (20.00)Tax deduction: (see note 3)

35.62% x $80 (28.50)35.62% x $64 (22.80)35.62% x $100 (35.62)

Ontario super allowance:($80 x 25% x 13.5%) (2.70)($64 x 25% x 13.5%) (2.16)

After-tax cost of $100 expenditure $48.80 $39.04 $64.38Source: Ernst & Young

Notes: 1) Eligible Ontario research institutes include universities, colleges of applied arts and technology, research hospitals and other entities in Ontario. 2) OBRITC – the 20% refundable Ontario Business Research Institute Tax Credit. 3)Tax rates for manufacturers: Federal 22.12% + Ontario 13.5% = Total 35.62%

For manufacturers,

the after-tax cost of a

$100 expenditure on

R&D, if conducted at

an Ontario university

or other research

facility, is $39.04.


Ontario U.S. Japan Germany France Italy

Employee payroll tax rates1 in % of payroll, 1999

Pension

Health

Unemploy-ment

FamilyAllowance

Total

3.50

1.95

3.50

0.00

8.95

6.20

1.45

6.20

0.00

13.85

8.68

4.30

0.90

0.11

13.99

9.75

6.90

3.25

0.00

19.90

9.80

12.80

3.97

5.40

26.57

23.81

0.21

4.41

2.48

30.91

Source: U.S. Social Security Administration, “Social Security Payments throughout the World, 1999;Ontario Ministry of Finance”1All given tax rates are compulsory government tax rates and do not include private healthinsurance payments.


Salaries, benefits—even research and development—is less expensive here.

With federal and provincial tax incentives, Ontario’s combined corporate income

tax system is now unequalled in its treatment of R&D. For manufacturers, the

after-tax cost of a $100 expenditure on R&D, if conducted at an Ontario research

university or research facility, is $39.04.

Transportation and power savings also increase profits. Ontario is close to the

major markets. Also, Ontario has some of the lowest electricity rates in North

America. Because the Sarnia complex employs co-generation—the simultaneous

production of electricity and steam—the cost is even lower. The introduction of

competition into Ontario’s electrical market will ensure that rates continue to be

as low as possible.

Taxes are lower, too. Our corporate tax rate for manufacturers is 5.3 percentage points

less than the average U.S. rate. The Ontario government has committed to reduce tax

rates further so, that by 2005, the general corporate tax rates (and the rate for

manufacturers) will be almost 10 percentage points lower than the average U.S. rate.

And in Ontario, your money keeps its value. Ontario’s inflation rate was low

throughout the ‘90s. The increase in the Consumer Price Index is expected to

remain moderate at about 2.5%. And interest rates in Ontario are at an all-time low.

5004003002001000

Competitively Priced Electricity in US$ thousands

Ontario

Michigan

Texas

Louisiana

Ohio

Pennsylvania

New Jersey

Sources: Edison Electric survey; Ontario Power GenerationCan$1 = US$0.72

The graph shows average industrial bills for industries using 5 million kilowatt hours per month. U.S. bills are taken from the U.S. Edison Electric Institute survey.

% 0

25

30

35

40

Source: Ministry of Finance, KPMG 1999-2000

Corporate tax rates for manufacturing, 2000

Wes

t V

irg

inia

Texa

sS

ou

th C

aro

lina

On

tari

o

Lou

isia

na

Del

awar

e

2005

1) Ontario's commitment for an 8 per cent general corporate rate by 2005 and implementation of the federal government's corporate tax reduction objective announced in the 2000 Budgets.

1


Chemical investors in Ontario also benefit from lower tort costs. In recent years,

tort-related spending has run more than 2% of GDP in the U.S. and less than 1%

in Canada.

And telecommunications costs are lower here, too. Compared to U.S. centers

like Texas, California and Massachusetts, Ontario’s monthly rates for dedicated

telecom lines are 15 to 20% lower, and “800” line costs are identical.

Finally—and this is important for companies planning expansion—Ontario

allows for the best possible dollar-for-dollar value in new chemical plant

construction. New labor legislation permits site-specific contracts and local

agreements with contractors and unions.

Whether it’s for the cost of labor, research and development,electricity, or transportation to market, come to Ontario . . . and save . . . and profit.

Lever Ponds1 Sunlight Park RoadToronto, Ontario M4M 1B6CanadaTel: (416) 461-9432Fax: (416) 461-9755Products: Detergents, sulphates, sulphonates

Lubrizol Canada Limited5800 Thorold Stone RoadP.O. Box 598Niagara Falls, Ontario L2E 6V2CanadaTel: (905) 358-5778Fax: (905) 358-0253Products: Additives (lube oil and fuel)

Marsulex Inc.111 Gordon Baker Road, Suite 300North York, Ontario M2H 3R1CanadaTel: (416) 496-9655Fax: (416) 496-1874Products: Sulphuric acid

Nacan Products Limited60 West DriveBrampton, Ontario L6T 4W7CanadaTel: (905) 454-4466Fax: (905) 454-5207Products: Adhesives, starches, resins

Nalco Canada Inc.1055 Truman StreetP.O. Box 5002Burlington, Ontario L7R 3Y9CanadaTel: (905) 632-8791Fax: (905) 632-0849Products: Polyamides, water treatment chemicals

0

20

40

60

80

97969594939291908988

Profit rate* in industrial chemicalsPer cent of capital stock

* Before tax operating profits divided by gross fixed assets net of depreciationSource: The Chemical Manufacturers' Association and Canadian Chemical Producers’ Association

Canada

U.S.


National Silicates Limited429 Kipling AvenueEtobicoke, Ontario M8Z 5C7CanadaTel: (416) 255-7771Fax: (416) 201-4343Products: Sodium silicate

Neste Canada Inc.5865 McLaughlin RoadUnit 3Mississauga, Ontario L5R 1B8CanadaTel: (905) 712-0900Fax: (905) 712-0901Products: Formaldehyde, phenolic resins, urea resins, melamineresins

NOVA Chemicals Ltd.P.O. Box 3054Sarnia, Ontario N7T 7V1CanadaTel: (519) 332-1212Fax: (519) 332-0408Products: LLDPE, HDPE and LDPE; and general-purpose and high-heat crystal polystyrene,ethylene, propylene, C4S, BTX

OMG Belleville Limited30 Dussek StreetP.O. Box 385Belleville, Ontario K8N 5A5CanadaTel: (613) 966-8881Fax: (613) 966-1901Products: Additives (fuel and lube oil), paint driers, preservatives

OxyChem Durez Canada100 Dunlop StreetP.O. Box 100Fort Erie, Ontario L2A 5M6CanadaTel: (905) 871-3206Fax: (905) 871-7979Products: Molding compounds, resins

Ontario has been an export-driven economy for more than 150 years. We know

what manufacturers need and how to get their goods to market.

Ontario has an extensive, 13,437-mile highway network with advanced freeway

traffic management systems linked to major U.S. routes through 19 border

crossings.

Ontario’s chemical plants have easy access to Highway 401, a multi-lane

expressway corridor from Montreal on the St. Lawrence River to Windsor and

Detroit. This artery linking major centers runs by the chemical plants in Maitland

and Millhaven in eastern Ontario and the specialty chemical plants in the Greater

Toronto Area. Sarnia connects with the 401 through Highway 402, and to the west,

Highway 402 connects to the international Blue Water Bridge and Michigan’s

Interstate 94/69/75 network. That network is part of the huge grid of interstates,

expressways and turnpikes that reaches out to every corner of the U.S.

The Blue Water Bridge is also part of the new NAFTA “Superhighway” network—

designated corridors for the rapid, high-tech-assisted north-south movement of

goods from Mexico to Canada through the mid-continental U.S.

Because 65% of Ontario’s exports to the U.S. and 80% of our imports move by

truck, Ontario has a competitive transportation industry. The province has 84,000

truck drivers, 19,000 of whom are licensed commercial vehicle operators. Ontario

also has reciprocity trucking agreements with 41 states.

Or you can ship by rail. Transcontinental railway lines through Ontario provide

freight service to eastern and western Canada and, through 7 rail crossings, to

the U.S. Now, a new, larger rail tunnel in Sarnia can accommodate a non-stop

flow of double-stacked containers and multi-level carriers.

Ontario has an extensive, 13,437-mile highway network

with advanced freeway traffic management systems

linked to major U.S. routes through 19 border crossings.

The right conditions for success


Los Angeles

VancouverVictoria

Edmonton

Calgary

Winnipeg

TorontoKingston

FrederictonHalifax

New York

Boston

St. John’s

OttawaMontreal

Washington

PittsburghChicagoSan Francisco

St. LouisKansas City

Sarnia

Detroit

Houston

Highways

CanadianRailways

U.S. Railways

ONTARIO

Ontario Transport Integrated with U.S. Transport


Power? Ontario’s electricity supply is reliable, abundant and among the lowest

priced in North America. In Sarnia, co-generation gives chemical producers a

further break.

Ontario also has all the elements of a state-of-the-art telecommunications

network—digital switching, signalling and fiber optic technology. Financial

services? Ontario is Canada’s financial center.

Most important, Ontario has a “critical mass” of existing chemical facilities in

Sarnia. That concentration has fostered the growth of a full support package.

The 17 chemical plants, including 2 plants across the river in Michigan, are

integrated through a network of feedstock pipelines. That allows feedstock and

product transfers and swaps. Underground salt caverns provide feedstock

storage. Co-generated power, transportation facilities, repair specialists and turn-

around teams—it’s all in place.

Specialized support skills are available in engineering, plant, construction,

maintenance and pipeline operations. The industrial community has an

outstanding reputation in terms of workplace safety and practices. The Sarnia

industrial complex is internationally recognized as a pioneer in the

implementation of progressive environmental protection programs.

We’re not alone in thinking Sarnia is a good site. A 1997 study said Sarnia was

the best of 10 U.S. and Canadian communities for locating a new industry. In

terms of operating costs, another study said Sarnia ranked 12th of 42 locations

across North America and Europe.

Sarnia has advantages—but so do other Ontario centers. That’s why there’s a

specialty chemical industry in the Greater Toronto Area, and why KoSa Kingston

Inc. and DuPont Canada chose eastern Ontario. In fact, available infrastructure

was one reason KoSa Kingston Inc. chose Millhaven as the site for its new PET

resin project.

Good roads, inexpensive electricity, support services, lowoperating costs—the combination is good chemistry for chemical producers.

OxyvinylsP.O. Box 1027Niagara Falls, Ontario L2E 6V9CanadaTel: (905) 357-3131Fax: (905) 374-5614Products: PVC (polyvinyl chloride) resins

PolyOne Corporation17 Tideman DriveOrangeville, Ontario L9W 3K3CanadaTel: 1-800-930-1100Fax: (519) 941-1066Products: PVC compounds, plasticizers

PPG Canada Inc.2301 Royal Windsor DriveMississauga, Ontario L5J 1K5CanadaTel: (905) 823-1100Fax: (905) 855-6097Products: Chlorine, caustic soda,hydrochloric acid

Procter & Gamble Inc.P.O. Box 355, Station AToronto, Ontario M5W 1C5CanadaTel: (416) 730-4711Fax: (416) 733-1165Products: Fatty acids, glycerin, surfactants

Recochem Inc.131 East DriveBrampton, Ontario L6T 1B5CanadaTel: (905) 791-1788Fax: (905) 791-7140Products: Naphthalene, solvents

Reichhold Chemicals, Inc.1919 Wilson AvenueToronto, Ontario M9M 1B1CanadaTel: (416) 742-0262Fax: (416) 742-0020Products: Alkyd and allyl polyesters; acrylic emulsions

Rhodia Canada Inc.3265 Wolfedale RoadMississauga, Ontario L5C 1V8CanadaTel: (905) 270-5534Fax: (905) 270-5616Products: Surfactants, polyols, nyloncompounds


Things are happening . . .

In 2000: NOVA Chemicals Corp. invested Can$16 million in Sarnia to build a

second polyethylene pilot plant.

In 2000: DuPont Canada Inc. undertook a Can$51 million expansion of its

Kingston nylon facility. Dupont also expanded its nylon compounding facility

in Maitland.

In 2000: Bayer Inc. completed a Can$220 million expansion of its Sarnia synthetic

rubber plants.

In 2000: Transalta Energy Corporation broke ground on a Can$400 million project

to supply steam and electricity in Sarnia.

In 1999: Dow Chemical Canada Inc. completed an ethylene styrene interpolymer

(ESI) pilot plant in Sarnia.

In 1999: Bayer Inc. opened a nickel hydroxide plant in Sarnia, which together with

the tungsten carbide facility, cost Can$80 million.

In 1998: DuPont Canada Inc. completed a Can$58 million expansion of its nylon

facility in Kingston.

In 1998: NOVA Chemicals Corp. completed a Can$120 million expansion of its

Sarnia styrene facility.

And more things are about to happen . . .

Imperial Oil Limited (Exxon) is investing Can$50 million to upgrade its

ethylene/polyethylene facility in Sarnia.

Hercules Canada Inc. plans to expand its Burlington specialty chemical plant.

Bartek Ingredients Inc. plans to build a new malic acid plant in southwestern Ontario.

Jungbunzlauer AG plans to build an US$85 million citric acid plant in

Port Colborne.

Rohm and Haas Canada Inc.2 Manse RoadWest Hill, Ontario M1E 3T9CanadaTel: (416) 284-4711Fax: (416) 284-2982Products: Adhesives, acrylic emulsions, polyacrylates

RohMax CanadaMorrisburg Plant, Highway #2Morrisburg, Ontario K0C 1X0CanadaTel: (613) 543-2983Fax: (613) 543-2084Products: Pour point additives,hydraulic fluids

Royal Group Technologies Limited1 Royal Gate BoulevardWoodbridge, Ontario L4L 8Z7CanadaTel: (905) 264-0701Fax: (905) 264-0702Products: Polyvinyl chloride (PVC)resins

Shell Chemicals Canada Ltd.P.O. Box 2000Corunna, Ontario N0N 1G0CanadaTel: 1-800-567-8716Fax: (519) 862-5671Products: BTX, isopropanol, solvents,propylene, hexane, styrene

Stepan Canada Inc.3800 Longford Mills RoadLongford Mills, Ontario L0K 1L0CanadaTel: (705) 326-7329Fax: (705) 326-4523Products: Additives, surfactants,sulphates, sulphonates, ethoxylates

Sterling Pulp Chemicals Ltd.302 The East MallToronto, Ontario M9B 6C7CanadaTel: (416) 239-7111Fax: (416) 234-7555Products: Sodium chlorate, sodiumchlorite

Skilled workforce. Central location. Low costs. Modern infrastructure. These are the compelling reasons whyOntario is the place for your next chemical investment.


Ontario—a great place to live and work

Ontario has a wonderful quality of life, and that can often translate into creative,

affirmative workplace performance.

As part of Canada, Ontario’s quality of life and standard of living are among the

highest in the world. We have affordable housing, numerous recreational

opportunities, great community living, and major arts and entertainment

attractions.

The cost of living is highly competitive with the U.S. Rates of crime that threaten

personal safety are low. Consumer prices are stable. And so is the political system.

Ontario has an excellent highly developed, standardized public education system

that includes 17 universities and 25 colleges of applied arts and technology.

Undergraduate tuition fees in arts and sciences are an average of 42% lower than

state university fees. Tuition for law, medicine, computer science and electrical

engineering are also much lower than American fees.

Ontario is healthy. Every Ontarian, irrespective of ability to pay, has medical and

hospital insurance. Compared to the U.S., Ontario’s infant mortality rate is one-

third lower and, on average, Ontario’s men and women live 2 years longer.

House prices in Ontario’s chemical production communities are either

comparable to, or lower than, prices in Louisiana, Texas and North Carolina.

Most Ontarians own their own homes.

Want to relax? Ontario has everything from first-run musicals to major league

sports, and from ski resorts to wilderness lakes and forests. Toronto is one of the

world’s great centers for live theater. Then there’s Stratford’s Shakespearean

Festival—the largest outside the U.K.—and the Shaw Festival at Niagara-on-the-

Lake in Ontario’s wine region.

Every Ontarian, irrespective of ability to

pay, has medical and hospital insurance.


Life’s good here in Ontario, Canada—and others agree.

For the 7th year in a row, Canada was ranked #1 in the 2000 United Nations

Human Development Index, a measurement of quality of life based on factors

such as life expectancy, literacy, educational enrollment and real GDP per capita.

Housing cost comparisons in US$ estimated as at January 1, 2000

House price* Apartment rent/mo**

Ontario

Kingston $ 151,251 $ 633

Sarnia $ 167,708 $ 499

Delaware

Wilmington $ 321,345 $ 781

Louisiana

Baton Rouge $ 140,734 $ 481

Lake Charles $ 173,317 $ 531

New Orleans $ 229,419 $ 761

Texas

Corpus Christi $ 155,997 $ 673

Houston $ 215,887 $ 754

* Median sale price, 2,200 square foot executive residence ** 900 square foot residence

Source: ERI, Economic Research Institute, 2000 Geographic Reference ReportCan$1 = US$0.677, Ministry of Finance average for 1999

Sulco Chemicals Limited60 First Street East Elmira, Ontario N3B 2Z5CanadaTel: (519) 669-5166Fax: (519) 669-8340Products: Oleum, sulphuric acid

Terra Nitrogen161 Bickmord LineCourtright, Ontario N0N 1H0CanadaTel: (519) 867-2739Fax: (519) 867-3128Products: Ammonia, urea

Uniroyal Chemical Co.25 Erb StreetP.O. Box 250Elmira, Ontario N3B 3A3CanadaTel: (519) 669-1671Fax: (519) 669-1679Products: Additives, agrochemicals, antioxidants, polyurethane

VFT Inc.725 Strathearne Avenue NorthHamilton, Ontario L8H 5L3CanadaTel: (905) 544-2891Fax: (905) 544-4942Products: Coal tar, naphthalene, pitch

Witco Canada Inc.565 Coronation DriveWest Hill, Ontario M1E 2K3CanadaTel: (416) 284-1661Fax: (416) 284-4316Products: Additives (fuel and lube oil), surfactants

At the Center of the

ChemicalMarketplace

Printed in Ontario, Canada on recycled paper

ONTARIOOttawa

Toronto

New York

WashingtonLos Angeles

For more information about investment opportunities in Ontario, please visit our website:

www.2ontario.com

Or contact us at:1-800-819-8701

E-mail: [email protected]

Ontario Investment ServiceBCE PlaceCanada Trust Tower, Suite 4040, 161 Bay StreetToronto, Ontario, CANADA M5J 2S1Tel: 416-360-4647 Fax: 416-360-1817

© Queen’s Printer for Ontario, 2001 01/02/317

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