Metal Fabrication

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Metal Fabrication Machinery ManufacturingSect
or Overview

• Alberta Regional Economic Development Conference
• May 2009

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Contents

• Alberta Metal Overview
• Size of the Prize (surprising!)
• Sector Growth Strategies

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Structural Steel
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Machine and Fabrication Shops
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Tanks, Pressure Vessels /Heat Exchangers
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Coatings and Heat Treating
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Production Breakdown
Billions
Fabricated Metal Products
Machinery
Sources Conference Board of Canada, Statistics
Canada
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Metal Fab and Machinery Revenue Growth
( Billions)
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Metal Fab and Machinery Co. Numbers
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Metal Fab and Machinery Empl Numbers
Total metal fabrication and machinery sector
employment 60,000
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Metal Fabrication Profile

• Metal Fab sector is primarily job-shops with
  expertise in manufacturing niche products.
• Industrial Machinery sector offers more
  standardized products and focuses a good deal on
  conventional oil gas
• Both sectors play a critical role in oil sands
  and conventional development and downstream
  processing
• Pressure Vessels / Structural Steel / Machine
  Shops / Pumps and Compressors / Mining equip.

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Fabrication Manuf Drivers

• Conventional and heavy oil and gas development
  has been a key driver of growth in Alberta,
  increasing the demand for all products and
  services.
• Agriculture and high tech manuf also strong
• There are three key industrial sectors supplying
  products and services
• Fabricated Metal Products
• Industrial Machinery and Equipment
• Engineering and Construction

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Oil Gas Spending Overview

• Canadian Association of Petroleum Producers 2009
  investment forecast
• ? 15B Oil Sands Capital
• ? 15B Oil Sands MRO
• ? 13B Conventional
• ? 43B Total OG Spending
• Significant opportunities for growth of regional
  fabricators and manufacturers
• Opportunities for partnership with and investment
  by new companies

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Metal Outlook

• Sector will continue to see growth at GDP rates
  or greater.
• Project deferrals, capital and labour
  availability at issue.
• Companies starting to invest more in automation
  to offset dependence on labor.
• Scarcity of labour will continue to elevate
  labour rates.
• Inter-provincial partnerships will help increase
  capacity of local fabricators
• Steel issues related to international trade and
  availability of specialty steels are at issue.

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Metal Strategies for Growth

• Increase productivity through technology adoption
  and automation
• Welding Automation Workshops
• Technology Awareness Missions
• Lean Manufacturing Assessments
• Create a favorable regulatory environment that
  encourages investment in new technologies to
  increase productivity
• Use of accelerated CCA
• Outsource supply chain opportunities
• Partnering opportunities between Alberta
  companies and Canadian fabricators.

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Opportunities

• Special opportunities for growth of industry in
  Alberta
• Identified by stakeholders
• Services
• Construction
• Maintenance related to all equipment
• Environmental services
• Equipment manufacture / fabrication
• As per client needs
• Pumps, compressors, valves, pipeline services

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Opportunities

• Project Owners, EPCs and Tier Ones are using this
  pause to make new supplier relationships for when
  activity again increases.
• In particular, developing relationships with EPCs
  and Tier Ones is important since their doors are
  open more widely.
• The process of establishing new business requires
  determination, patience and regular
  communications.

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Opportunities

• Personal Connections
• NBSF
• GO Expo (June)
• Oil Sands Tradeshow and Conference (Sept)
• Business trips are of great value
• www.albertametal.ca
• Some rationalization will occur in Alberta's
  metal sectors in the coming months. Players from
  other provinces and countries will play a role in
  these changes.
• Alberta remains one of the best OG markets in
  the world and it's wise to invest resources here
  to build market share.

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Client Drivers

• Money cost reduction and control
• Labour availability
• Confidence demonstrated in project go/no go
• Technical Expertise

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Industry Associations

• Canadian Manufacturers and Exporters
  www.cme-mec.ca
• Alberta Pressure Vessel Manufacturers'
  Association www.apvma.com
• Petroleum Services Association of Canada
  www.psac.ca
• Petroleum Technology Alliance Canada
  www.ptac.org
• Alberta Boilers Safety Association www.absa.ca
• Canadian Institute of Steel Construction
  www.cisc-icca.ca
• American Welding Society http//sections.aws.org/
  nalberta/
• Canadian Welding Association www.cwa-acs.org
• Canadian Welding Bureau Group www.cwbgroup.org
• ASM International www.asm-intl.org
• Alberta Research Council www.arc.ab.ca

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Business Development Info

• Alberta Metal Business Development Info
• www.albertametal.ca
• Alberta Metal Fabrication Information
• www.alberta-canada.com/metalfabrication
• Greater Edmonton Bitumen Upgrader Study
• www.edmonton.com/upgraderstudy
• The National Buyer Seller Forum
• www.nationalbuyersellerforum.ca
• Investing in Alberta
• www.alberta-canada.com/investlocate
• Market Research
• www.alberta-canada.com/statpub
• Alberta First Business Directory
• www.albertafirst.com
• Alberta Business Directory
• www.alberta-business-directory.com

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Contact
Lynn Wyton Director, Metal Fabrication Alberta
Finance and Enterprise lynn.wyton_at_gov.ab.ca Tel
[phone]
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Alberta Industry Analysis

• Over 150 billion in energy capital being spent
  in Alberta
• Excellent opportunities for business expansion
  and investment
• Some shortages of the following skilled trades
• Welders / Machinists / Pipe-fitters / Iron
  Workers
• Lagging technology adoption due to nature of
  products produced (high mix-low volume)
• New supply chain, investment and employment
  opportunities exist

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Alberta's Labour Force

• Over 400,000 new jobs will be created between
  2005 and 2015
• Over 300,000 new workers will enter the market in
  this time
• New jobs will exceed new workers with
  approximately 100,000 shortfall
• All sectors are seeing a tightening in the labour
  market
• Currently, we have
• The lowest unemployment rate 3.1
• The highest participation rate 72.8
• The highest employment rate 69.9

Source Alberta Human Resources and Employment
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Increasing Economic Diversity
( Distribution of GDP 1985 vs 2004)
1985 Total GDP 66.5 Billion
2004 Total GDP 187.4 Billion
Source Alberta Finance