North America’s oldest city is the focus of economic activity in the province and has boosted employment
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erched
on the most easterly point of the continent is St.
John’s – North America’s oldest city, an economic
driving-force and capital of Newfoundland and Labrador.
“The city is the focal point for economic activity in the province
and that is not going to change,” says mayor Andy Wells,
now in his second term of office.
The mayor, a black belt in Tae Kwon Do, is known for pushing aggressively
for jobs. The unemployment rate – at eight per cent – is the
lowest in the province, but further targets lie ahead. “I would
like to see a five per cent rate – that would be a significant
achievement,” Mr Wells says.
A thriving business community has developed, centred around the port and the offshore oil and gas industry. St. John’s recently became a world energy city – a partnership of 11 energy cities that allows the exchange of petroleum industry knowledge and economic and infrastructure development strategies. “We are an energy capital because of our offshore developments and these will increase over time. Energy is one of our major specialisations, but we are also building a centre of ocean excellence,” says Mr Wells.
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| On the ocean wave: a thriving business community has developed, based around the port |
Last
year oil activity in St. John's metropolitan area directly accounted
for about 14.9 per cent of GDP, up from
8.4 per cent in 1998, with direct oil industry employment reaching an
estimated 1,400 people, or 1.6 per cent of the area's employment total.
Labour incomes from these jobs was over £32 million. This year
and beyond the oil industry's share of the economy is expected to grow
as activity and production expands.
Fortis
Properties Corporation has capitalised on St. John’s economic resurgence
over the last decade. Revenues at the power and real estate conglomerate
nearly doubled to £30.6 million in 2001, from £17.11 million
in 1999.
Company president John Walker says: “We are always watching the
market with an eye to potential acquisitions. We do the research, we
watch for underperforming properties in good locations, and then, if
the opportunity presents itself, we go for it.”
Fortis has also contributed to St. John’s position as an energy city. The company owns three electric utilities, including one that supplies power to the island of Newfoundland, and operates 24 small hydroelectric generating plants.
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| Knock-on effect: growth in offshore oil and gas has created opportunities in the hi-tech sector |
In
turn, growth in the energy sector created opportunities in the city’s
hi-tech business for ConPro Group, which won its first break with a
contract to build part of the offshore drilling station in the Hibernia
oil field.
ConPro president, Fraser Edison, says: “The oil industry was an
area we wanted to take advantage of, but we also knew that there were
lots of other opportunities out there. We have the connections and the
financial wherewithal to buy into companies and develop synergies.”
In
April last year ConPro acquired a controlling interest in Rutter Technologies,
who produce one of the world’s most advanced voyage data-recorders
(VDR), the equivalent of the black box fitted in all aircraft. VDRs
are about to become mandatory in ships under the authority of the International
Maritime Organisation “We are looking around now to see which other
companies we may be able to buy,” says Mr Edison.
Significant improvements have been made to St. John’s infrastructure,
particularly relating to shipping and the offshore energy industry.
The White Rose oil field, currently under development, will be serviced
from St. John’s Port, which has been run as a commercial concern
since 1999.
President
and chief executive officer of St. John’s Port Authority, Sean
Hanrahan, explains: “We have embarked on a £9.68 million
capital plan, which will be completed in 2003.”
A state-of-the-art pier is just being completed. “Our port facilities
are probably the best in Eastern Canada,” says Mr Hanrahan. “I
would like to see the consolidation of the oil and gas industry here
in the port of St. John’s. My other goal is the development of
a tourism product,” he adds.
A. Harvey & Company, which has the supply-base contract for the
three offshore oil fields in the province, is based at the port. It
is one of the province’s oldest companies, having been in business
for 137 years.
Executive vice-president, Robert Patten, says: “We have always been involved in marine activity in the port and in Newfoundland.” Over the past 20 years, the company has expanded and diversified by opening a cold tidewater storage-facility at Argentia in southeastern Newfoundland. It responded to the collapse in cod fisheries by becoming a major transshipment facility for fish from foreign vessels destined for European and Far Eastern markets. It is also a major soft-drink bottler in the province.
One
of the company’s subsidiaries, set up in partnership with three
other firms, is Oceanex – now a separate business and recognised
as an innovative leader in transport. As the major terminal operator,
it generates just under two-thirds of the port’s annual income.
Oceanex’s main business involves transporting almost anything that
goes in and out of Newfoundland and Labrador. Vice-president for marketing
and sales, Stephen Snow, says: “We move everything from foodstuffs
and clothing to pharmaceuticals. We carry all the newly-manufactured
vehicles into the province, with the exception of the Chrysler Corporation.
“We
are very lean, quite creative and we have some excellent partners here
in the province, and this has enabled us to get where we are,”
he adds.
The firm has just signed a 15-year lease with the port. Mr Snow looks
to the future with confidence as he sees the potential of the province’s
energy and mining sectors supporting the economy.
“There is a sustained business base in the province. We have the
offshore industry and on the horizon is the Voisey’s Bay mining
development. This is good news for the province and the city, and certainly
for the shareholders of this company.”
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