Canada agriagri-food processing sector

FIP ASSOCIATES 1417 York Mills Dr. Orléans ON K4A 2P2 Tel: (613) 824-3582 E-mail: [email protected] Web: www.fipassociates.com

The Canadian agri-food processing sector is one of the country’s lead industries The food and beverage processing sector is Canada's third largest manufacturing sector. Approximately 5,700 establishments produced shipments valued at $72 billion in 2005 and provided 457,000 jobs. Canada’s export of agri-food products reached C$ 26.2 billion in 2005 with the main customers being the US ($15.8 B , Japan ($2.6 B) the E.U. 25 ($1.5B) and Mexico ($955M). The food and beverage processing sector is an important outlet for Canadian agricultural producers. About 40% of agricultural production is exported in a raw form, 15% is either sold directly to consumers or sold for non-food uses and about 45% is marketed as processed food through the food and beverage processing sector. This is a very diverse sector generating economic activity in all Canadian regions, and supplying more than 80% of the food and beverages consumed in Canada.

FIP Associates is a foreign investment consulting firm with Canada wide coverage for foreign investors wanting to investigate the best possible Most processing activity within the sector occurs in central Canada, but the sector is relatively more important to the economies of the Prairie provinces. The two larginvestment locations.

est sub-sectors, in terms of value of shipments, are meat and dairy products.

Significant opportunities will continue to arise as the Canadian food and beverage processing sector increasingly integrates itself into the overall North American economic zone and pursues domestic and expanding international markets. The Canadian agri-food sector is adjusting to key market drivers such as globalization, more sophisticated consumer demand, demographic and technology changes. The industry is strongly supported by the numerous agri-food related R&D institutions across the country and benefiting from technology transfer opportunities. The Canadian agri-food system represents attractive investment opportunities based on low cost energy, abundant primary products, excellent infrastructure, skilled labour, proximity to the huge US market, a stable business and social environment and an advantageous R&D tax credit program. Domestic and international markets are becoming characterized by higher valued products such as neutraceuticals and functional foods. In response to increasingly sophisticated consumer demand and significant market growth, opportunities will continue to arise as the Canadian food and beverage processing sector integrates itself into the overall North American economic zone, pursues domestic and expanding offshore markets and generally becomes more global in its orientation. The overall Canadian economic climate, one of the best in the world, should also serve the sector well. To benefit from Canada’s pristine image in World circles, the Canadian Government has undertaken a “brand Canada” program for agri-food which should help Canada based producers take advantage of the country’s reputation as a very high quality food producer.

Atlantic Canada agriagri-food processing

The Atlantic Canada agri-food processing sector is one of the region lead industries As the region’s fifth largest employer, the agriculture and agri-food industry includes some of Canada's largest food manufacturers with over 700 processing plants employing 20,000 people. 2005 exports from the region were C$916 million while imports amounted to $458 million. Atlantic Canada has the strategic advantage of having easy access to the world's major markets, supported via a comprehensive transportation infrastructure that includes two major container ports in Halifax and Saint John, four international airports, 15 regional airports, and the world's largest open water bridge between New Brunswick and Prince Edward Island. It is an industry in tune with consumer trends, using new technologies, new products and new modes of presentation to achieve its competitive advantage. The world’s largest producer of frozen french fries, North America’s largest carrot processor and the manufacturer of the very first candy bar are based here. So are manufacturers of everything from maple sugar products and molasses to crystalclear bottled iceberg water and one of the most popular beers ever to reach United States consumers – Moosehead. The region is also the wild blueberry capital of the world. Processing these blueberries into Kosher-certified wine is just one example of the value-added approach taken by Atlantic Canada’s agriculture and agri-food industry. Atlantic Canada’s agriculture and agri-food industry is characterized by a broad range of crops and livestock and an increasing focus on adding value. In 2005, the industry generated over C$1.5 billion in revenues and exported over 200 products to 80 countries (not including seafood). Exports of agricultural products from the region have more than doubled in the last 10 years.

Abbreviations: NB = New Brunswick NS = Nova Scotia NL = Newfoundland and Labrador PEI = Prince Edouard Island

Potatoes, blueberries, apples and maple sugar head up the list of products exported nationally and internationally from the region. Atlantic Canada’s table and seed potatoes, known throughout the world, are the region’s most important cash crop. Millions of bags of seed potatoes are shipped every year to the United States, Europe, Asia-Pacific, Africa, the Middle East and South America. Cheese production is increasing and the market for specialty cheese products is expected to continue to grow. Long-life milk products such as ultra-high temperature (UHT) milk and skim milk powder are major dairy exports from the region. Atlantic Canadian delicacies such as chanterelle mushrooms and fiddlehead greens are making an impact on global markets. Federal research facilities established in Atlantic Canada (www.agr.gc.ca/re/centres)

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Potato Research Centre, New Brunswick

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The Atlantic Cool Climate Crop Research centre, NL

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Crops and Livestock Research Centre, PEI

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NRC’s Institute for Nutrisciences and Health, PEI

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Atlantic Food and Horticulture Research Centre, NS

INSTITUTIONAL SUPORT: The Potato Research Centre (Fredericton, NB) develops new cultivars and technologies for the production, handling and management of potatoes. The Centre also maintains a national repository of potato gene resources and conducts research on soil management and conservation. In July 2006, Agriculture and AgriFood Canada announced a contribution of $590,000 to help launch the Potato Innovation Network (PIN) 2020, a national network geared to new markets and innovative uses for potatoes. Food Technology Centre (Charlottetown, PE) was established in 1987 to provide technical support to the food processing industry on Prince Edward Island. Since then, FTC has strategically developed its infrastructure and attained recognition as a quality technology provider to its many local, regional, national and international clients. The FTC services the food processing industry in the areas of food product- process development, laboratory services, and now has expertise and infrastructure in place for bioresource upgrading. It also provides food safety, nutrition labelling and analytical services to the industry. The National Research Council recently created the Charlottetown Institute for Nutrisciences and Health (http://inh-isns.nrc-cnrc.gc.ca) is involved in identifying how bioactive compounds found in nature can be used to improve human and animal health. Research focuses on the role natural compounds play in three key areas: neurological disorders (such as Alzheimer's disease); obesity-related disorders (such as Diabetes); and infection and immunity (such as viral infections). In addition to bringing world-class scientists, equipment and infrastructure to the table, the Institute presents a bold new model in research partnerships which goes beyond the mere sharing of space and equipment Food Research Centre – The Food Research Centre (FRC) based at the University of Moncton, NB, is doing applied, fundamental research and training in the areas of science, technology and agri-food biotechnology. Its first role is to act as an innovation and technology transfer catalyst. The CRA facilitates the development of small and medium size processing firms through applied research, the development of new products and processes, the optimization of value-added agricultural and marine inputs and chemical, microbiological and sensorial analysis. Crops and Livestock Research Centre (Charlottetown, PE) provides scientific knowledge and develops innovative technologies for integrated crop and livestock systems while working to enhance and protect the environment. Nova Scotia Agricultural College (Truro, NS) houses several research centres for the agricultural sector, including the Atlantic Pasture Research Centre, the Atlantic Poultry Research Centre and the Carrot Processing Research Program. Atlantic Cool Climate Crop Research Centre (St. John’s, NL) develops technologies which diversify and add-value to rural economies in the cool summer agri-ecosystems. Research is organized under three of the National Science Programs of Agriculture and Agri-Food Canada: - Environmental Health, Sustainable Production Systems and Bioproducts and Bioprocesses. Current research focuses on integrated pest management, molecular biology and plant propagation, drainage and land improvement, nutrient management, cereals and forage research and high value crop research, animal feed production, wild small fruit development, vegetable development and non-food crop research. Atlantic Food and Horticulture Research Centre (Kentville, NS) researches and develops technology to increase horticultural productivity, competitiveness and stability while maintaining food quality and safety and protecting the environment. The Atlantic Food and Horticulture Research Centre develops new cultivars and technologies for producing, adapting and protecting horticultural crops including innovation for their storage, handling and processing. The Centre has four programs: Berries, Tree Fruit and Food are the main focus at Kentville, while Vegetables, Berries and Tree Fruit are the main focus at Bouctouche. Food engineering is maintained by one scientist located at the Université de Moncton. The Centre has a staff of 88 including 22 scientists working independently or in teams to find solutions to industry challenges.

KEY INDUSTRY PLAYERS: No matter where you live in the world, if you have ever eaten french fries, chances are they came from McCain Foods Limited of Atlantic Canada. Nearly one in three french fries consumed around the globe come from McCain Foods. The company has been in operation since 1956, offering a range of frozen vegetables, entrees, pizzas, cheese products, juices and beverages around the globe. Its recipe for success – quality products coupled with imaginative marketing strategies – enabled it to reach global sales of $5.3 billion CDN in 2005. Cavendish Farms Ltd. is another remarkable Atlantic Canadian company. It is North America’s fourth largest potato processing company. With 800 employees, Cavendish Farms serves markets in North and South America, Europe, the Caribbean and the Far East. In fact, half of its output is marketed outside of Canada. Thanks to its new $70 million CDN processing plant located on Prince Edward Island, Cavendish Farms can process one billion pounds of potatoes per year. Hershey Canada recently expanded its plant in Halifax, Nova Scotia, which has been manufacturing Pot of Gold®, Canada's number one boxed chocolate brand, since 1928. The $20 million CDN expansion enables the company to meet the growing demand for the Moirs family of chocolates which boasts domestic annual sales of more than 4 million boxes and is rapidly increasing its market share in the United States. Total plant throughput is now in excess of 22 million boxes. Ganong Bros. Limited, from St. Stephen NB, is Canada's oldest candy company and it was founded in 1873. The chocolatier now employs 400 people at its St.Stephen plant ant its primary product is boxed chocolates. It now provides many chocolates for Laura Secord stores. Ganong Bros. is a 1999 winner of Canada's "50 Best Managed Private Companies " award. Moncton, New Brunswick-based Atlantic Waffles, an affiliate of Western Waffles from British Columbia, exports waffles all across Canada and the Eastern United States. The company recently won the New Brunswick Export Achievement Award for its efforts. Atlantic Waffles currently produces Belgian waffles, soft waffles, sugar waffles, round toaster waffles, french toast, mini- waffles, pancakes and a fruit-filled waffles, similar to strudels. Atlantic Waffles is the only waffle-maker in Atlantic Canada. Ocean Nutrition Canada Limited (ONC) based in Dartmouth, NS, is a privately held company, whose major shareholder is Clearwater Seafood's Limited Partnership, which is the world’s largest integrated shellfish harvester and processor. ONC is the largest manufacturer of concentrated long chain omega-3 fatty acids from fish oil and was the first to have eleven of its oils achieve US Pharmacopia (USP) verification. ONC currently has 19 patent families (novel compositions, processes and uses), comprising 68 patents either granted or pending in 18 countries around the world. ONC has offices in the US, Europe and Asia. Maritime Pride Eggs Inc. employing 50 people at its $6.4 million facility in Amherst Nova Scotia, distributes table eggs and liquid egg products throughout the Maritimes. This company is a leader in technical innovation and one of the most efficient facilities of its kind in North America. Nova Scotia-based Oxford Frozen Foods is the world’s largest processor of wild blueberries and one of North America’s leading producers of frozen carrots and battered vegetable products. Founded in 1968, Oxford Frozen Foods began its operations as a family-owned business and operates the largest fruit farm in the world. The land and weather conditions in the area made it ideal for Oxford to harvest wild blueberries, a smaller and more concentrated blueberry native to Maine, Atlantic Canada and Quebec. Since it first started production, Oxford has increased its employee base from 50 to 2,000 employees, allowing the company to vary its product lines to offer carrots, cranberries, sugar-infused products, dried and canned products, as well as battered vegetable and cheese products, in addition to blueberries. The Humpty Dumpty Company Snack Food Inc $180 million plant in Summerside PEI has become one of the province's leading employers, providing jobs for 121 islanders. Of equal importance are the 25 million pounds of Island potatoes that the company consumes each year for production purposes.

Québec agriagri-food processing sector

The Quebec agri-food processing sector is the province’s lead industry There are about 1,500 food-processing firms in the Province generating 73,000 jobs and $20 billion in annual sales. Between 350-400 firms are exporting. There are three areas within the province where this industry is clustered, Greater Montreal, the Eastern Townships and the Québec-Beauce region. Some of the key players are represented in the map below and it comprises both domestically based and foreign multinational companies. The agri-food industry is subject to very severe production requirements and technological innovations in the area of food ingredients. With the high level of research going on in the various Québec agri-food related institutions described on page 3, the province is providing the most important incentive to this industry to keep improving processes, gain public acceptance, engage in technology transfers and assist with the opening of new markets. The Province is also very cost competitive and we have used the City of Montreal as the barometer to demonstrate that situation. Generally speaking, business costs are even lower in the rural regions of Quebec. An analysis of foreign investment to Canada data (2000-2006) reveals that Québec has been one of the most successful Canadian locations in attracting Foreign Direct Investment in the Agri-Food sector. Prestigious corporations such as Pepsi, Danone, Parmalat, Kraft, Frito-Lay, JM Smucker, Cargill, Fleischmann, Barry Callebaut, Mastertaste (Kerry Group) and Cadbury have a significant presence in this area. The Province attracted 26 of the 74 agri-food investment deals recorded for this period or 35% of all investments that landed in Canada in that sector. Saint-Hyacinthe received the title of Canada’s Agri-Food Technopole, thanks to its high profile research institutions and its world renowned achievements. SaintHyacinthe has the first and only science park in North America entirely dedicated to this sector. The science park also known as the “City of Agri-Food Biotechnology” has a website which will give you additional information on the size and nature of their facilities, including tax incentives (www.st-hyacinthetechnopole.qc.ca).

TOP 12 QUEBEC FOOD PROCESSING AND SERVICE COMPANIES George Weston is Canada’s largest food processing company. Through its subsidiaries, it constitutes one of North America’s largest food processing and distribution groups. Weston has two reportable operating segments: The Weston Foods operating segment is primarily engaged in the baking and dairy industries within North America. Loblaw is Canada’s largest food distributor and a leading provider of general merchandise, drugstore and financial products and services. The broadly based Canadian company has over 124,000 employees throughout its businesses including 22,000 in Quebec. La Coop fédérée (Formerly La Coopérative Fédérée du Québec) based in Montreal is the most important agricultural cooperative in Quebec with some 100 affiliated co-ops and 14,000 workers. It is a majority shareholder in Olymel, the Canadian leader in the slaughtering, processing and marketing of pork and poultry meats and it is also the largest Canadian exporter of pork and poultry products. Olymel employs 11,000 people including 8,200 in Quebec. It has 16 animal raising centres and 18 slaughter houses, meat preparation and distribution facilities. It processes 80 million chickens, 4 million turkeys and 4 million pork per year. Agropur based in Longueuil QC is Canada’s most important dairy cooperative and a leader in milk products processing. It employs 3,900 people (2,850 in Quebec) in 21 plants including 8 outside Québec (One in the US, and the others are in Ontario and Western Canada). Agropur processes close to two billion litres of milk per year and produces a variety of products under well known brands such as: Québon, Oka, Sealtest, Yoplait, Natrel and Island Farms. Saputo based in Montreal has 8,500 workers (2,500 in Quebec) in its 46 plants around the world including 27 in Canada. Saputo is one of the top twenty dairy processors in the world, the largest dairy processor in Canada, among the top five cheese producers in the United States, and the largest snack-cake manufacturer in Canada. In 1999, Saputo acquired Culinar, Canada’s largest snack-cake manufacturer. In 2001, Saputo became the leader in the Canadian dairy industry by acquiring Dairyworld Foods. Kraft Canada is part of Kraft North America headquartered near Chicago. Kraft employs approximately 7,100 people in Canada (2,000 in Québec) and they have 14 offices and 20 plants throughout the country. Kraft is the country’s leading marketer of food products and services. In Canada, Kraft is present in over 50 categories with more than 100 leading brands. Canada Bread Company Limited is a leading manufacturer and marketer of value-added and nutritious fresh bakery products. Canada Bread employs more than 7,300 people in Canada including 1,650 in Quebec. The company also operates in the United States and the United Kingdom. The Company is 87.5% owned by Maple Leaf Foods Inc. Première moisson is a Vaudreuil-Dorion bakery-pastry chain of 19 stores in Quebec and one in Ottawa. It was founded in 1991 and it employs 1,000 people. The emphasis is on quality and healthy products, affordable prices, and no intermediaries. The bread is made and baked on site, in each store. Aliments Breton Canada Inc. based in Saint Bernard in the Beauce region of Quebec, is the result of the fusion of business interests and joint ventures exclusively dedicated to the agribusiness industry. Du Breton Farms is the largest organic and natural pork producer and transformer in North America. Les Œufs Blais and Breton and Les Œufs Avibro, Ovale and its associates make up the largest egg grading group in Canada, with four egg grader stations and a distribution network covering Ontario, Quebec and the Maritimes. Aliments Breton employs 1,100 people including 915 in Quebec. Exceldor based in Lévis, is a cooperative employing 850 people at two processing plants—in St-Damase and St-Anselme QC. In 2005, it held an estimated 35% of the total Quebec chicken market, and 50% of the chicken brands segment. CARRIERE Foods based in Saint-Denis-sur-Richelieu is Canada's leading processor of canned and frozen vegetables and it also produces and packages a wide range of food products including frozen fruit, canned soups, sauces, baked and dry beans. It operates 7 plants, including 3 in Ontario and 4 in Quebec. The company's products are marketed both under their own or private-brand labels. CARRIERE Foods has 750 regular full-time employees and up to 1,200 seasonal employees. Barry Callebaut is the world’s leading manufacturer of high-quality cocoa, chocolate and confectionery products. The Zurich-based company operates more than 30 production facilities in 24 countries and employs some 8,000 people. Barry Callebaut Canada Inc., located in St. Hyacinthe, Quebec is the company's second largest production facility in the world. It has full operations, including a Barry Callebaut Institute where trained pastry chefs teach 500-700 chefs and bakers per year and a research facility that identifies market and practitioner needs, develops new products, processes and recipes. Barry Callebaut Canada Inc. employs 640 people. Van Houtte is headquartered in Montreal and it employs 1,900 people in Canada (620 in Quebec) and the United States. Through approximately 100 corporate outlets and franchises, they serve more than two million cups of coffee every day. Van Houtte is the largest Canadian roaster and distributor of gourmet coffees to food retailers. Through its subsidiary VKI Technologies, they are also a world leader in the design, manufacture and distribution of coffee-making equipment and related products. In addition to the 12 food processing leaders above, Quebec is host to many other famous corporations such as the Irish Kerry Group with an important UHT Milk producing plant in Sainte-Claire QC and Mastertaste food ingredient plant in Granby, Industries Lassonde a leader in fruit juice production, Biscuits Leclerc from Quebec City who operates 5 plants in Québec, Ontario and the US, Frito Lay in Lévis, Horizon Mills a subsidiary of Cargill now owns the JM Smucker brand and its plant in the Québec Beauce region.

QUEBEC INSTITUTIONS SUPPORTING THE AGRIAGRI-FOOD CLUSTER The Quebec Agri-Food industry recently formed a new association under the name « Conseil de la transformation agroalimentaire et des produits de consommation » (CTAC) which comprises 435 firms (www.conseiltac.com). McGill University’s Macdonald College located in the West Island of Montreal, is celebrating its Centenary in 20062007. Over this one-hundred-year period, the Faculty has been nationally and internationally recognized as a leader in many areas of plant and animal science, nutrition and dietetics, food science, engineering, water management, soils, microbiology and environmental management. New programs are regularly being added. Macdonald College’s curriculum prepares its students to meet the needs of a rapidly changing world. The Faculty is at the forefront of advances in the basic sciences and engineering associated with food supply; human health and nutrition; and the environment. Over 100 scientists work in the areas of biosciences, bioproducts and bioresource engineering. They address a variety of emerging technologies such as: biosensors for beverage quality optimization, e-sensors for food quality, diagnostic of food-borne pathogens, microbial fingerprinting tool in food and feed, biopreservatives, functional foods, thermal and pressure processing, novel proteins, food enzyme bioconversion, soyabean and flax-based proteins, soy phytoestrogens, nutraceuticals, biomarkers in parasitic infections, vaccines, animal transgenics and probiotics. McGill is part of Canada’s Advanced Foods and Materials Network (www.afmnet.ca) which supports scientific foundations across Canada in the area of functional foods, nutraceuticals, bio-materials, genetics and its social aspects such as law and ethics. The AFMNet is contributing $15 million to 20 collaborative projects across Canada in 2006-07. The funding will likely spill over into industry, as one of AFMNet’s goals is to transfer technology to Canadian companies. The Nutraceuticals and Functional Foods Institute (INAF) (www.inaf.ulaval.ca) is part of Laval University in Québec City and it was created in 1999. More than 60 scientists affiliated with INAF lead important research projects in fields, such as human nutrition, dietetic, genomic, proteomic, plant and animal physiology, chemistry, biochemistry, medicine, pharmacognosy, microbiology, food technology and economics. The Research and Development Institute for the Agri-Environment (IRDA – www.irda.qc.ca ) is a non-profit research corporation formed in March 1998. It mobilizes and creates a network of contributors and research teams from government, universities and industry. This network is devoted to research, development and technology transfer in agriculture and environment. The Quebec Institute for agri-food technology (ITA – www.ita.qc.ca ) was formed in 2003 and it comprises Quebec’s three agri-food school campuses, La Pocatière, Saint-Hyacinthe and Macdonald College. The institute provides specialized agri-food related training and their graduates are highly praised by the industry. The institute also provides a networking environment for this industry, acts as a centre of expertise, engages in applied research and participates in technology transfers. The Food Research and Development Centre (FRDC - http://res2.agr.ca/CRDA/ ) is based in Saint-Hyacinthe and it is one of Agriculture and Agri-Food Canada’s 19 research centres. The FRDC is Canada's largest research centre devoted to food processing. They specialize in food quality, safety, preservation, processing and bio-ingredient. The FRDC supports R&D activities of food and beverage processing companies in several innovative ways. The FRDC is Québec’s entry door to Agriculture Canada’s Matching Investment Initiative (MII) program which can match up to one-for-one industry R&D contributions to collaborative research projects. Cintech Agroalimentaire ( www.cintech-aa.qc.ca/ ) is a non-profit, Saint-Hyacinthe based industrial research centre providing professional support for technological innovation from conception to marketing of agri-food products. The centre has complete labs for R&D, analysis, and pilot scale plant, sensory evaluation and experimental cuisine. Since its creation in 1993, Cintech performed some 1800 projects for about 1000 firms which can benefit from a 40% tax credit for admissible costs related to technological adaptation. The Agriculture and Agri-Food Reference Centre (CRAAQ— www.craaq.qc.ca ) maintains a large collection of documentation related to the industry, it collects business intelligence; and it produces and distributes analytical documents to its network of 675 expert members. The Centre’s objective is to enhance productivity and innovation.

Ontario Agri-Food Processing Sector

Ontario has the largest concentration of food processing firms in Canada which is commensurate with its population base of 11 million people, about one third of the Canadian population. Ontario has five agri-food clusters as per the chart to the right and it accounts for 40% of the food and beverage processing industry in Canada. The Toronto cluster is not only the most important in the province, it is second only to Chicago in terms of importance in North America. There are an estimated 400 food and beverage manufacturing facilities in the Toronto area. Canada’s top-ranked food and beverage manufacturers are mostly headquartered in the Greater Toronto Area: Kraft Canada, Maple Leafs Foods, Nestlé Canada, Redpath Sugars, Parmalat, Campbell Soup Co., George Weston Ltd, Canada Bread, Gay Lea Foods, Wrigley (Canada) Inc., Puratos, Coca Cola, Pepsi, Dare, Casco, Kerry Group Canada, Quality Meat Packers, Cadbury Chocolate Canada, Cargill Foods, Unilever Canada, Nabisco etc. An analysis of foreign investment to Canada data (2000-2006) reveals that Ontario has been one of the most successful Canadian provinces in attracting Foreign Direct Investment in the Agri-Food sector. In addition to several of the firms noted above, other prestigious corporations have invested in Ontario such as Frito-Lay, Robin Hood, Heinz, Hershey, Rich Products, ConAgra Foods, General Mills, Maidstone Bakeries and Ferrero. The Province of Ontario attracted 25 of the 74 agri-food investment deals recorded for this period or 34% of all investments that landed in Canada in that sector.

TOP 12 ONTARIO FOOD PROCESSING AND SERVICE COMPANIES George Weston based in Toronto is Canada’s largest food processing company. Through its subsidiaries, it constitutes one of North America’s largest food processing and distribution groups. Weston has two operating segments: The Weston Foods operating segment is primarily engaged in the baking and dairy industries within North America. Loblaw is Canada’s largest food distributor and a leading provider of general merchandise, drugstore and financial products and services. The broadly based Canadian company has over 124,000 employees throughout its businesses. McDonald’s of Canada is based in Toronto and there are more than 1,375 McDonald's in Canada including traditional restaurants and non-traditional restaurants such as Wal-Mart McDonald's. McDonald's and its franchisees employ more than 77,000 Canadians. Maple Leaf Foods: With a staff of close to 24,000 people, Maple Leaf is Canada's leading provider of fresh and prepared meats and consumer foods supported by their flagship brands - Maple Leaf® and Schneiders® . Canada Bread Company Limited is a leading manufacturer and marketer of value-added and nutritious fresh bakery products. Canada Bread employs more than 7,300 people in Canada, the United States and the United Kingdom. The Company is 87.5% owned by Maple Leaf Foods Inc Compass Group based in the UK, is the world's largest food service and facilities management company with annual revenues in excess of $27.2 billion/Cdn and over 400,000 associates working in more than 90 countries around the world. Compass Group Canada, headquartered in Mississauga, Ontario, is the nation’s leading foodservice and facilities management company providing services from coast to coast. In Canada, the company has currently annualized revenues of over $800 million/Cdn and employs in excess of 18,000 associates. Sodexho Canada is a member of Sodexho Alliance, one of the world’s largest providers of outsourced food and facilities management services. Sodexho Alliance operates in 76 countries on 5 continents. The company has 130,000 employees at more than 6,000 locations across North America. In Canada, Sodexho is headquartered in Burlington ON and is growing quickly, currently employing over 10,500 people from coast to coast. Kraft Canada is based in Toronto and it is part of Kraft North America headquartered near Chicago. Kraft Canada employs approximately 7,100 people and they have 14 offices and 20 plants throughout the country. Kraft is the country’s leading marketer of food products and services and it is present in over 50 categories with more than 100 leading brands. Vincor International : With as staff of 3,200 employees, Vincor International Inc., based in Mississauga, is one of the world’s top ten wine companies by revenue. It has wineries in British Columbia, Ontario, Quebec, New Brunswick, California, Washington State, Western Australia and New Zealand, and is one of the largest wine importers, marketers and distributors in the United Kingdom. On June 5, 2006, Constellation Brands, Inc. from Fairport NY acquired Vincor International operations around the world. Cott Corporation based in Toronto is the fourth largest soft drinks maker in the world, after Coca-Cola, PepsiCo, and Cadbury Schweppes. It is the world’s largest retailer brand soft drink provider. The Company commercializes its business in over 60 countries worldwide, with its principal markets being the United States, Canada, the United Kingdom and Mexico. Cott operates eleven bottling facilities in the United States and six bottling facilities in Canada and they employ approximately 2700 people. Connors Brothers Income Fund is a trust that holds a 100 per cent interest in Clover Leaf Seafoods, and Bumble Bee Foods. It employs 2,400 persons in Canada. These two companies represent North America’s largest branded seafood company. The companies offer a full line of canned tuna, salmon, sardine and specialty seafood products, marketed under leading brands including Clover Leaf, Bumble Bee, Brunswick, Snow’s and Beach Cliff. In addition, Connors Bros. sells a full-line of canned chicken and canned meat products in the U.S. under the Castleberry’s, Sweet Sue and Bryan brand names. With a few minor exceptions, Connors is primarily a branded packaging and distribution business. Maple Lodge Farms with 2,200 employees is the largest independently owned poultry processing plant in Canada. They operate two processing facilities: one in Norval, Ontario and one in St. Francois, New Brunswick. Maple Lodge Farms processes 400,000 chickens each day. Each week they deliver 2.5 million kilograms of poultry products to 30 countries world-wide. Unilever Canada, a wholly owned subsidiary of Unilever PLC, headquartered in London, England, is one of the world’s largest consumer products companies, operating in 100 countries. With a staff of 2,200 persons, Unilever Canada produces a variety of consumer products under such famous brands as Sunlight, Vaseline, Pears, Pond’s, Red Rose & Lipton. Unilever is a market leader in the production of margarine and it also manages other food related brands such as Ben & Jerry’s Ice Cream, the Slim-Fast , Hellmann’s Mayonnaise, Skippy Peanut Butter and Knorr. SunOpta Food Group, based in Brampton, has close to 1,400 employees and was created in 1999. SunOpta is Canada's largest distributor of organic, natural, kosher and specialty foods and one of North America’s leader in those market segments. The SunOpta Food Group has four operating groups: The company specializes in the processing of non-GMO and organic soybeans, sunflower and corn products. The SunOpta Ingredients Group focuses on the technical processing and contract manufacturing of value-added food ingredients. The SunOpta Fruit Group concentrating in global sourcing and processing of a diverse range of organic and natural fruits, fruit ingredients and packaged products for industrial, food service and private label retail customers. The SunOpta Canadian Food Distribution Group specializing in fresh produce and dry, refrigerated and frozen groceries distribution throughout Canada.

RECENT SUCCESS STORIES IN THE ONTARIO FOOD PROCESSING SECTOR •

The Ferrero Group from Italy chose Brantford to set up a 850,000 square feet chocolate producing plant. On July 5, 2006, the Ontario government announced a $1.7 million contribution to Ferrero to implement an effective employee recruitment strategy. This $275 million plant will employ up to 1,200 skilled workers by 2009. This state of the art facility will be the largest of its kind in North America and when at full capacity, it will export approximately $300 million annually in products to the US and Mexico. The plant will become Brantford’s largest employer and this is one of Canada’s largest food processing investments in recent years.

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On October 27, 2006, the Kellogg Company announced a $100 million “Greenfield” investment in a new cereal production facility in Belleville. The plant which is to open in 2007 will employ 100 people. It’s the first cereal plant to be built by Kellogg in North America in almost 20 years.

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The Puratos Group is a Brussels based bakery ingredients multinational selling to bakers, pastry and chocolate makers in over 100 countries around the world. Puratos has been in Canada for over a decade and in February 2006, they moved into an new $20 million plant in Mississauga which provided expanded manufacturing capabilities in the areas of bakery, pastry and chocolate additives.

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Maidstone Bakeries - $155 million joint venture in Brantford with Tim Horton’s and the Irish firm IAWS which owns “Cuisine de France” – 238,400 sq.ft. new par-bake manufacturing facility employing 300 people.

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Tim Horton invested in a new 150,000 square foot distribution centre in Guelph which opened in 2006. The company also operates large distribution centres in Langley BC, Calgary AB, and Kingston ON.

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Western Waffles - $25 million – 150,000 sq.ft new manufacturing facility in Brantford producing waffles and employing 220 people.

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Labatt Brewries owned by Belgian based InBev, proceeded with a $40 million expansion of its London, ON plant which has increased capacity by 45%. Labatt is Canada’s largest brewery.

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Bunge Ltd. acquired CanAmera Foods based in Oakville, Canada’s largest producer of edible oil products. Bunge is the world’s leading oilseed processing company.

KEY PLAYERS IN ONTARIO’S FIVE FOOD PROCESSING CLUSTERS

INSTITUTIONAL SUPPORT FOR THE ONTARIO AGRI-FOOD CLUSTER Research and Development: Ontario has long recognized the importance of having state of the art research institutions to support the agri-food processing sector, the third most important in the provincial economy. There are several professional colleges throughout the province who offer food related studies and training. There is however one location that stands above the others and it is the University of Guelph which is world famous. Its mandate evolved over time and the Department of Food and Science was created in 1968. It is the only one in the province offering a curriculum accepted by the Institute of Food Technologists and one of only 6 accredited Departments in Canada. In 1999 it moved into a new building which is connected to the Guelph Food Technology Centre (GFTC). Recently, the Department was appointed as the headquarters of the national Advanced Foods and Materials Network (AFMNet). The Guelph Food Technology Center (www.gftc.ca ) The industry-driven GFTC was founded in 1996 and it is the only entirely self-supporting food technology and training company of its kind in Canada. GFTC is a globally recognized organization delivering innovative technology, training and quality systems solutions that enable agri-food companies to capture market opportunities. They strive to create healthy, affordable food in an environmentally and socially responsible manner. The GFTC and the Belleville Loyalist College both offer 4 week pre-employment programs tailored to the food and beverage processing industry and the new technologies, new product introductions, increased food safety concerns, environmental compliance, changing trade patterns and a demand for increased productivity. Canada’s Advanced Foods and Materials Network (www.afmnet.ca) includes some 87 Canadian researchers in subjects related to the food industry. It is part of the national Networks of Centres of Excellence (NCE) program, which fosters partnerships. It is the only NCE in Canada that only focuses on food. The AFMNet supports scientific foundations across Canada in the area of functional foods, nutraceuticals, bio-materials, genetics and its social aspects such as law and ethics. The AMMNet is contributing $15 million to 20 collaborative projects across Canada in 2006-07. The funding will likely spill over into this industry, as one of AFMNet’s goals is to transfer technology to Canadian companies. Agriculture and Agri-Food Canada(AAFC) Food Research Program (FRP) (http://res2.agr.ca/guelph):The FRP is the entry door for companies to participate in the Matching Investment Initiative (MII) Program of AAFC which can match up to one-for-one industry R&D contributions to collaborative research projects in the areas of processing, preservation, quality and safety of food and bioingredients. The Food Research Program carries out research and technology transfer in support of the agri-food sector. Their focus is to improve food quality, reduce processing costs, add value to agricultural raw materials for food and non-food uses, and support a healthy diet. A unique feature of the Food Research Program new facility at Guelph is a pilot processing plant in which pathogen work is permitted. Because of their location on the campus of the University of Guelph, partnerships with university, government and industry researchers are emphasized. The FRP welcomes collaboration with the sector to solve problems faced by the industry. The full-time staff of about 60, including 25 professionals, is organized in four teams: Functional Foods and Nutraceuticals; Food Preservation Technologies; Molecular and Cellular Biology; and Structure and Function. Alliance of Ontario Food Processors (www.aofp.ca): It is a non-profit organization of food processing companies whose key priorities are the development of awareness of the food processing industry; the development of partnerships in the supply chain; the creation of opportunities for growth; the handling of public policy issues and the provision of one-stop shopping for food industry information.

Western Canada agriagri-food processing

The Western Canada agri-food processing sector is the region lead industry From premium wine to nutraceuticals and organics, Western Canada has developed a diverse, cost-competitive and research-driven agri-food industry. Western Canadians use innovative science and technology to turn quality ingredients into exceptional products. Along with a range of raw agricultural materials, the region has a world-renowned food inspection system, a strong, cost-effective research capacity, and a collaborative environment among governments, universities, health institutions and industry. Western Canada is a centre of global excellence for the research and production of a wide variety of award-winning agri-food products and a major investment destination for food and beverage companies There are more than 2,000 food-processing firms in Western Canada generating 74,000 jobs and $21 billion in annual sales. Agri-food processing is the lead industry in Manitoba, Saskatchewan and in third position in Alberta and British Columbia. In 2005 Western Canada agri-food trade amounted to C$ 13.2 billion worth of exports and $5.3 billion worth of imports. The Prairie Provinces have long be known as the “World’s breadbasket” and Western Canada’s global grain production capacity has attracted the worlds top grain based processors. Winnipeg can boast to be the Canadian headquarter for the world’s three largest grain multinationals: Bunge Canada, Archer Daniels Midland (ADM) and Cargill Canada. Canada is a world leader in canola seed production, averaging 6.2 million tonnes per year. There are now several investments taking place in the higher value added segments of the industry as well as a branching out into bio-diesel and ethanol fuel production. The abundance of raw materials produced in the Prairies is a strong incentive for new companies interested to get involved in this evolving industry. Abbreviations: BC = British Columbia AB = Alberta SK = Saskatchewan MN = Manitoba

PROVINCE British Columbia Alberta Manitoba Saskatchewan

Number Companies 1,000 600 300 250

Employees 31,000 28,000 8,500 6,600

C$Billions Sales 6.1 9.6 3.1 2.2

Federal research facilities established in Western Canada (www.agr.gc.ca/re/centres)

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Agriculture and Agri-food Canada, Brandon Research Centre

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Agriculture and Agri-food Canada, Cereal Research Centre

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Agriculture and Agri-food Canada, Lacombe Research Centre

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Agriculture and Agri-food Canada, Lethbridge Research Centre

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Agriculture and Agri-food Canada, Manitoba Crop Diversification Centre

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Agriculture and Agri-food Canada, Saskatoon Research Centre

C$Billions Exports 2005 1.6 4.9 2.9 3.6

MANITOBA: The value–added food processing sector is the largest manufacturing sector in the province, representing 25% of total provincial manufacturing shipments. Those include: meat products, dairy, flour and feed, poultry, other processed food and beverages. Manitoba’s exports constitutes 37% of total provincial shipments with primary markets being the U.S. (74%), Japan (13%), and Mexico (5%). Principal exports include pork and pork products, potatoes, honey, malt, beef and eggs. The province is recognized internationally for the quality of its pork, and is home to four modern high-throughput hog processing plants. It is also home to the largest egg processing plant in Canada as well as three world-class potato processing plants. New R&D centre - In May 2006, the University of Manitoba opened the Richardson Centre for Functional Foods and Nutraceuticals (RCFFN), a $31 million investment focussing on several steps in the research and development of food supplements extracted from crops grown in the prairie region—from identifying useful compounds in plants, enhancing these compounds, developing ways to process and incorporate them into food products and considering the consumer acceptability of the final products. Success story: Vita Health Products in Winnipeg is Canada's largest manufacturer of private label vitamins, minerals, herbal products, dietary supplements and over-the-counter drugs. Highly Productive Agricultural Resource Base — With more than 7.7 million hectares (19 million acres) presently used for crop and livestock production, Manitoba annually accounts for 15% of Canada's primary agricultural production. Variety of Raw Materials Supply — Manitoba's soils and climatic conditions are ideally suited for the production of a wide range of crops including cereals, oilseeds, pulses and horticultural crops. Low factor costs — The food processing industry benefits from low cost, high-quality raw materials (agricultural products), a stable workforce, and the lowest energy costs in North America. Research & Development Infrastructure — The Manitoba industry is supported by the following research infrastructure, which has capabilities for improved crop development, new food product development, regulatory compliance testing, and process development (including pilot plant facilities): ο University of Manitoba's Faculties of Agricultural and Food Sciences, and Human Ecology www.umanitoba.ca/afs/food_sciences/ ο Manitoba Crop Diversification Centre www.agr.gc.ca/pfra/mcdc/mcdc_e.html ο National Centre for Agri-Food Research in Medicine in Winnipeg www.sbrc.ca/ncarm/ ο Richardson Centre for Functional Foods and Nutraceuticals, www.umanitoba.ca/research/rcffn/ Key industry players: ADM, Cargill, Bunge, Diageo Canada, J.R.Simplot, Nestlé, Maple Leaf Foods, McCain, Midwest Food Products, Parrheim Foods, Peak of the Market, Vita Health Products and Pillsbury. SASKATCHEWAN: Saskatchewan food processors are at the forefront of the industry potential. Today there are almost 300 food processors making up this rapidly growing sector of Saskatchewan's economy, and the Saskatchewan Food Processors Association is playing a leading role in the promotion, support, and growth of the dynamic group of over 200 member companies. POS Pilot Plant (www.pos.ca) is a confidential contract research, toll processing, and analytical services organization located in Saskatoon, Canada. They specialize in extraction, fractionation, purification and modification of bio-based materials. Their 54,000 sq. ft. facility is comprised of 5 pilot plant processing areas, 11 laboratories, warehousing and quarantine areas, library, client rooms and administrative areas.

Investment Opportunities: The province is committed to supporting the expansion and development of industries in the province, from production to the export and marketing of secondary processed products. With 44 per cent of Canada ’s cultivated farmland, Saskatchewan accounts for over half of the wheat grown in Canada , and also produces crops that enable the production of ethanol, paint and linoleum, paper, strawboard, textiles and bio-diesel. Other areas where opportunities exist are: dairy, foodservice, Beef, Pork, Bison and Lamb. Success stories: The Saskatchewan Toll Processing Centre held its grand opening on September 11, 2006 in Melfort. They have the processing capability and trained staff to develop new and innovative products for the consumer market place, in a practical and cost effective manner. It essentially allows a new or expanding company to have its product custom-produced in a federally-inspected facility until it can afford to build a plant of its own. It also enhances the capacity of firms to produce small and medium volumes of products on a costcompetitive basis. Bioriginal Food and Science Corp. in Saskatoon is the world's leading supplier of essential fatty acids. Their products are used in nutraceuticals, functional foods, skin care products, cosmetics, animal feed, veterinary products and over-the-counter pharmaceuticals. They have offices and facilities in Canada, the United States, Europe and China, enabling international distribution of their innovative EFA products. Bio-diesel: Canola is likely to be the primary feedstock because of the number of acres seeded, its superior “cold flow” properties, and a large, developed crushing industry that is ready to participate in the production of biodiesel. For example, the combined canola crushing capacity of ADM at Lloydminster, Bunge at Nipawin and Cargill near Saskatoon is estimated to be 5,600 tonnes per day. The plants are running at about 90 percent capacity. Bunge North America, the North American operating arm of Bunge Limited announced in January 2006 that it was expanding its oilseed crusher and oil refinery in Nipawin, Saskatchewan. When construction is complete in November 2007, the facility will have significantly increased the crush capacity and more than doubled its current refining capacity. Bunge's facility in Nipawin processes canola and high euricic acid rapeseed (HEAR) creating protein meal for animal feed and oil used by food manufacturers and for non-food uses like biodiesel. On November 27 2006, Archer Daniels Midland Company announced that it will increase its North American oilseed crushing capacity through expansions at oilseed crushing plants in the U.S. and Canada including two canola crushing plants one in Velva, North Dakota and the other in Lloydminster, Saskatchewan. In March 1995, Cargill selected Saskatchewan as the site for its new $53.6-million canola crushing plant. The plant was built three km north of Clavet near Saskatoon. It is Cargill's first canola crushing plant in North America and the largest facility of its kind in Canada. The plant runs 24 hours a day and has a capacity to crush 2,000 tonnes of canola daily. ALBERTA: There are over 600 companies in Alberta who are involved in processing agricultural commodities into food, animal feed, beverages, or non-food products. The agri-food industry in Alberta is export oriented. Alberta is the second largest exporter of primary and processed agricultural and food products (agri-food) in Canada, after Ontario. In 2005, Alberta agri-food exports were $5.0 billion. Of the total Alberta agri-food exports about one-half went to the United States ($2.5 billion). Japan was the next largest export market ($770 million) followed by Mexico ($361 million). The top five Alberta agri-food exports in 2005 were beef ($1.4 billion), wheat ($786 million), pork ($464 million), canola seed ($418 million) and live cattle ($271 million). Value added exports represented 61.4 per cent or $3.1 billion of Alberta's total agri-food exports in 2005. There were increased exports of pork, prepared cereals, sugar, hides and skins, bovine semen and embryos, and peat moss. Alberta is the largest cattle-producing province in Canada. The value of shipments of manufactured food and beverage products totalled $9.6 billion in 2005. Meat, dairy and poultry processing is at the heart of primary production and food processing activity in Alberta. Combined shipments for

these industries totalled $6.0 billion in 2005 (69.8 per cent of total food processing). Meat and poultry processing totalled $4.7 billion, while dairy product manufacturing totalled $1.3 billion. Agri-food capital investment expenditures in Alberta in 2005 were estimated at $185.6 million in food and beverage manufacturing. Key players: A growing number of national and multinational agri-food companies have established operations in Alberta. Eleven of the top fifty US agri-food companies are now located in the province with operations ranging from further processing of commodities like beef and pork, canola, oats and barley, to value added processing of food ingredients, snack foods, pasta and pet foods. Tyson Foods (Lakeside Packers) and Cargill Foods have beef slaughter facilities located in Alberta. Three major poultry processors, Lilydale, Maple Leaf and Sunrise Poultry are located there and two national brewers, Labatt, a subsidiary on InBev and Molson Brewery. ConAgra Specialty Potato Products and McCain Foods both located french fry manufacturing plants in Alberta. Olymel is the largest pork processing facility in the province. Other well know names are Nestlé, Frito-Lay, General Mills and ADM. Great opportunities exist for Alberta specialty food manufacturers to capture a major share of this growing food industry. Alberta has a wide variety of competitively-priced raw materials and plays a crucial role in the pasta industry as a major supplier of durum semolina. On a geographic basis, Alberta is strategically located to supply the West Coast of Canada and the United States, as well as the Pacific Rim countries. These are expected to represent the fastest growing markets for food as the population in these regions continues to increase. In comparison to the United States, the opportunity for confectionery manufacturing in Alberta is driven by the availability of locally produced sugar at world market price. Most sugar-containing products that undergo substantial transformation in the manufacturing process are traded duty-free within the NAFTA region. Canada has historically been able to keep its refined sugar prices among the lowest in the world. Canada does not subsidize the production or processing of raw sugar. The price of Canadian refined sugar is directly linked to the world raw sugar market. In Alberta, Rogers Sugar contracts with sugar beet growers to encourage continued high quality production and increased acreage of beets. Rogers Sugar operates a beet processing facility in Taber, Alberta. This plant is capable of producing up to 150,000 metric tonnes per year and is one of the most modern sugar refineries in North America. INSTITUTIONAL SUPPORT: The Food Processing Development Centre in Leduc is a modern, fully equipped pilot plant and product development laboratory facility. It's staffed with experienced food scientists, engineers and technologists. Centre services are designed to strengthen and expand the capability of Alberta's food processors to meet the challenges of the marketplace through application of new technology and the development of new or improved products and processes The Market Technology Program (MTP), funded through the Agriculture and Food Council’s CARD program and administered by Food Beverage Canada, offers the Alberta agri-processing industry an economical means of accessing information about the rapidly changing food industry. The program provides cost sharing for travel to select national and international trade shows, conferences and industry events for Alberta food processing companies The Alberta Agriculture Research Institute (http://www.aari.ab.ca/) is the primary agency in Alberta for funding, coordinating and promoting strategic agricultural research initiatives and technology transfer in the agriculture and food sector. AARI provides funding opportunities to help achieve a stronger research and innovation system that assists the agricultural and food industry of Alberta to be globally competitive, environmentally sustainable and encourage a vibrant rural economy. AARI focuses on life sciences, environmental and value-added technologies and continued emphasis on improving primary production technologies.

BRITISH COLUMBIA: The British Columbia food & beverage industry plays a significant role in the provincial manufacturing economy contributing approximately $2.1 billion (for the year 2004) to the provincial Gross Domestic Product (GDP), or just over 5% of the total provincial GDP contributed by goods-producing industries in British Columbia, and is ranked the third highest among manufacturing industries. The British Columbia food industry with more than 1,000 companies employing over 31,000 people, is dominated by a large number of small and medium sized firms which provide the industry with operational flexibility in responding to shifts in consumer tastes and preferences. An estimated 55% of all food processing firms are located in the Greater Vancouver area and the nearby Fraser Valley. Another 30% of food processing firms are located in the Okanagan Valley and the coastal regions. Wine industry: British Columbia and Ontario are the two largest wine producing provinces in Canada. The wine industry of British Columbia grew from 13 wineries in 1984, to 133 wineries now, and they produced 8.4 million litres of wine in 2005. Internationally recognized for their quality, BC wines have won 950 medals in international competitions. Meeting the high standards set by the Vintners Quality Alliance (VQA) since 1990, sales of British Columbia's VQA wine reached a record $134 million in the year ending March 2006, climbing 10 to 20 per cent annually since VQA standards were established. Recognized as the world leader in ice wine production, 40 to 50 wineries in British Columbia and Ontario produce ice wine that meets the exacting growing standards and production standards of the VQA. INSTITUTIONAL SUPPORT: On June 27, 2006 the University of British Columbia (UBC) opened the new research laboratories named Food, Nutrition and Health Faculty. These laboratories will help expand research capacity into the fields of wine, food and nutritional sciences. The new laboratory will expand the research activities of the Faculty, help attract industry clients and high-calibre researchers, and increase the capacity to train more students. The UBC Faculty of Agricultural Sciences recently expanded to include the Family & Nutritional Sciences programs and is now called the UBC Faculty of Land and Food Systems. Within that faculty, is the Food, Nutrition and Health Program (FNH) that includes the newly integrated Food Sciences, Wine Research Centre, Nutrition, and Dietetics groups. The Wine Research Centre received $490,000 for a full renovation to their laboratories and wine library. The Wine Research Centre is part of the University of British Columbia’s program to acquire, interpret and utilize genomic information to support bio-products and technologies. The Wine Research Centre’s mission is to conduct pioneering research in enology and viticulture. The Centre will develop highly qualified researchers with relevant scientific expertise and enterprise who will promote the technological advancement of the wine industry throughout Canada. Example of a BC based international success story: Forbes Medi-Tech Inc., based in Vancouver, is globally recognized for developing proprietary functional food ingredients derived from plant sterols. It is also a life sciences company dedicated to the research, development and commercialization of innovative products for the prevention and treatment primarily of cardiovascular disease (CVD). In December 2006, Medi-Tech and Carrefour, the World’s second largest food distributor held a joint press conference on the company’s internationally recognized cholesterol reducer, Reducol ™ . According to a recent survey of 1000 consumers conducted by Opinion Way Institute of France, sixty-three percent cited cardiovascular disease as being the number one cause of mortality in France. A significant risk factor for cardiovascular disease is high cholesterol. Leading the charge against high cholesterol in France, the Carrefour Group has launched great tasting cholesterol-lowering products with Reducol ™ including: original and strawberry flavoured yogurt drinks; a mixed strawberry and apricot flavoured yogurt; and an all natural (fruit base) set yogurt. The Carrefour Group has worked for more than forty years to establish its position as the daily partner of millions of customers in Europe, Asia and Latin America. Today, the Carrefour Group operates 12,000 stores in 29 countries.

KPMG’s bi-annual Competitive Alternatives study measures 27 key cost components--including labour, benefits, business facilities, taxes and utilities – as applied to business operations in industrialized countries. The 2006 edition of the study includes a comprehensive analysis of 128 cities in nine countries -- Canada, France, Germany, Italy, Japan, the Netherlands, Singapore, the United Kingdom and the United States. The study’s basis for comparison is the after-tax cost of start-up and operation for 17 different types of business, over a 10-year planning horizon. The following bar chart illustrates the competitiveness of Canadian cities relative to locations in United States.

FIP Associates can produce a variety of bar charts and financial spreadsheets on investment scenarios on request.

The relatively low price of world-market raw sugar available in Canada, in comparison to U.S. prices, has long been a factor in the development of the Canadian foodprocessing industry. The Federal, Provincial and Municipal governments have a variety of incentive packages for the industry as well as technical assistance available from the different research establishments related to that industry. Paul Desbiens, President of FIP Associates is ready to help you: • Locate possible investment sites; • Identify governmental assistance programs applicable to your project; • Introduce you to key federal, provincial or municipal contacts; • Provide available data on human resources, industrial parks, and other useful data. Please contact me at: (613)824-3582 E-mail: [email protected]