With its unique blend of location, openness and innovation, Canada is ideally placed to create supply chains that are both efficient and resilient
Whether it’s the blockage of the Suez Canal by an immobilised supertanker or shortages in vaccines and personal protective equipment associated with the Covid-19 pandemic, the events of 2020 and 2021 have been seen by many as evidence of the fragility of supply chains and of the need for a reset in the way the world does business – towards more resilient regional and local networks.
The world’s tenth largest economy by GDP, Canada looks well set to benefit from this changing landscape. Much of its industrial capacity is ideally located to profit from the country’s close links to its largest export partner, the US; and Canada also enjoys strong links to the European, Asian and Australasian economies through favourable trading agreements with more than 50 countries.
Source: theworldcounts.com
The economic contribution of the North American continent
According to a recent KPMG study, three sectors of the Canadian economy offer notable opportunities for supply chain development and investment: clean tech, advanced manufacturing and agribusiness. “Each of these sectors have long contributed to Canada’s economic success,” the report says. “But [Canada’s] advantages in these supply chains stem from a combination of existing assets and emerging competitive strengths.”
Agribusiness in Canada, the world’s seventh largest food exporter, is proving especially attractive to investors. The country’s agriculture and agri-food industries employ 2.3m people, generate more than C$112bn annually and are associated with integrated, "farm-to-fork" supply chains and high levels of food quality and safety. "With the access and proximity to global markets, Canada is well placed for shortening supply chains, as they are moved close to end consumers. Post-pandemic, investments in Canadian agribusiness will be able to leverage these national strengths", reports KPMG.
Source: Government of Canada, 2018
Canada’s agri-food industries
In 2019, Charoen Pokphand Foods (CPF) purchased HyLife for C$498m (US$372m), which made the Thai food conglomerate a majority owner of Canada’s leading producer and global exporter of pork products alongside its Japanese partner, Itochu Corp. While providing CPF and Hylife with access to both the North American and Asian pork markets, the move also means that fresh Canadian pork can now reach Japan and the world’s largest pork market, China, in peak condition.
Owing to a growing demand for plant-based proteins among increasingly health-conscious consumers, Canada’s protein industry has recorded strong growth, with a compound annual growth rate (CAGR) of 23.7 per cent between 2018 and 2020 and forecasted at 13.3 per cent between 2021 and 2027. Plant protein consumption in the country looks set to increase from US$502.4m in 2020 to US$1.3bn by 2027. Valued at C$18.5bn in 2019, the industry is predicted to be worth C$40.6bn by 2025.
[Canada’s] advantages in these supply chains stem from a combination of existing assets and emerging competitive strengths.
Key players in the sector include France-based Roquette, which opened the world’s largest pea protein processing facility just outside Portage la Prairie, Manitoba. The global agri-commodities supply chain solution provider, Agrocorp Processing, also decided to locate two agri-food processing plants in Moose Jaw and Cut Knife, Saskatchewan. Headquartered in Singapore, Agrocorp operates in 20 countries and shipped around 10m tonnes of product in 2019.
“Saskatchewan is the pea and lentil capital of North America and therefore it’s very important for us to have a significant presence here, to allow us to funnel as much of that product as possible into our customer base,” says Agrocorp’s Head of Business Development, Vishal Vijay, describing the increase in capacity at the company’s state-of-the-art Moose Jaw facility from 3,000 tonnes in 2013 to 13,000 tonnes in 2020. “Saskatchewan has some strong advantages in allowing us to set up an integrated supply chain here, because of its access to land, its access to product and access to a talented labour pool. If you’re looking to process peas and lentils, Saskatchewan is definitely the place to do it.”
Source: GlobeNewswire
Value of the protein industry in Canada
With its access to raw materials and global markets, its well-established and efficient logistics infrastructure and highly educated workforce, low taxes and associated costs, Canada is a compelling investment opportunity for companies that are looking to secure their supply chains across the world.
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