Interest-free loans for three firms

February 08, 2010

Posted By ERIC BUNNELL, Times-Journal


They're already in the tallest building in the world -- now, Reaction Distributing Inc., St. Thomas, is looking to new frontiers.
The Woodworth Avenue company manufactures solid-waste compactors and balers for commercial and industrial customers, including the 160-storey Burj Khalifa skyscraper which opened in January in Dubai.

And Reaction now is one of three local employers which received job-creating support Monday from the federal government in the form of interest-free loans announced by Gary Goodyear, Tory Cambridge MP and minister of state for the Federal Economic Development Agency for Southern Ontario.

"This is quite exciting -- when I got the phone call last week . . . I was about two feet off the ground," Reaction owner Larry Vine said as he welcomed visitors yesterday to his plant.

The company is receiving a $397,936 loan which Vine said is half the investment Reaction will make in plant modernization and to seek additional export markets including the U.S. and Mexico.

Six jobs will be created. With sales last year of $4 million, its best year ever, Reaction currently has a workforce of 20.

But Goodyear said federal support for Reaction goes beyond creating just six jobs.

"(It) not only helps those folks who will be hired, it also has direct stimulus to the town."

In an interview, he also said that putting money into old-economy, heavy manufacturing still is a good investment in the future.

"If we can diversify and improve their efficiencies, get them to use new technologies to produce their products in a less-expensive way, stabilize their jobs so they can retain and perhaps retrain their employees on how to use a new software, or a new piece of equipment, then what we're really doing is transitioning traditional manufacturing sectors into the new economy.

"They're becoming more efficient, and that allows them to compete."

Nearby, a new, hydraulic brake press stood waiting to be plugged in. It is replacing a vintage, 1949 mechanical press -- and will reduce material prep time by as much as 75%.

Vine said it also will eliminate a source of noise which landed Reaction last year in court facing provincial environmental charges to which the company pleaded guilty and agreed to buy two neighbouring houses.

Although Reaction disputes the facts, Vine said Reaction chose to limit its costs.

"Why fight it? Why would I spend a half-million dollars fighting it? I already spent $300,000 on lawyers as it was."

Also receiving federal money yesterday: GCW Custom Kitchens Inc., $170,578 to buy new machinery to increase efficiency, and Zimmer Air Services Inc., $85,251 for the helicopter training school's St. Thomas operations.

GCW general manager Ron DeWeger said the company, which will invest a matching amount, isn't waiting to start shopping.

"We're going to look at some (machinery) today."

GCW expects to create an additional position.

Established under the federal government's Economic Action Plan, the Federal Economic Development Agency for Southern Ontario is investing $1 billion over five years in its area.

Yesterday's announcement was greeted by Elgin-Middlesex-London Conservative MP Joe Preston, who said that as economic recovery begins to take hold, federal support is all the more important in the battered region.

"As the economy begins to rebound -- and we see signs that it is -- we need to do all we can to support that momentum."

Goodyear said the three projects are among 60 that the Tories currently are supporting in the first year of the southern Ontario initiative, with $63 million of the program's $100 million first year funding.

He credited the Tories' Economic Action Plan for at least a part of the recovery.

"The good news is the economy appears to be on the road to recovery thanks to these efforts."

Goodyear noted that with the latest support, the federal government in recent months has committed $7.4 million in local economic development and infrastructure projects.