Quebec - A Leading Investment Location for the Chemical Sector

The Québec economy is undergoing massive changes. Québec companies, flexible, innovative and focused on international markets are quickly integrating with the new economy based on knowledge and innovation. Not only do our companies receive increasing recognition abroad, but our economy, which is very favorable to the business world, is attracting an increasing number of investors.

Yes, Québec holds a strong hand enabling it to play with panache on the global economic stage.

Outstanding Industrial Growth

• The chemicals industry is one of our largest manufacturing sectors, exporting over US$2 billion annually (Statistic Canada 2002)
• Close integration of refinery and petrochemical activities, with companies such as Shell Canada, Ultramar Diamond Shamrock, Petromont (polyethylene) and Basell (polypropylene)
• Excellent availability of venture capital: in 2002, 50% of the venture capital administered in Canada (US$7.2 billion) came from Québec-based funds
• Québec's chemical industry accounts for 22% of the value of Canada's chemical manufacturing

Opportunities for the Chemicals Sector

• The Interquisa Canada PTA project started production in September 2003, representing opportunities for a PET plant project
• The stability of energy cost in Québec is a key advantage when considering chlorine petrochemical products like EDC-VCM-PVC
• Enhanced access to feedstock from eastern Canada (Sable Island) in the near future will boost petrochemical resources in Québec

Major Companies Invest With Us

• Shell Chemicals Canada and SGF Chimie is currently building the world's first commercial-scale PTT plant in the Montréal area, worth US$100 million
• Interquisa Canada: recently invested US$460 million for the construction of a plant to produce purified terephtalic acid (PTA) in east Montréal
• Coastal Corporation: partnership worth over US$140 million with SGF for the start-up of Coastal's paraxylene plant in east Montréal
• Borden Chemical: a US$25 million Urea Formaldehyde Resin plant in Saint-Romuald, Québec

A Skilled Labour Force

• At comparable skill levels, the least expensive labour force in North America (Deloitte & Touche)
• Labour costs in the chemical industry are 22.7% lower than the U.S. average (KPMG 2004) Québec's labour force has a lower turnover rate than that of the U.S.

Market Access/Transportation

• One of the world's most extensive shipping networks and a sophisticated telecommunications infrastructure
• Montréal is a key transfer point for transatlantic cargo, handling an average 20 million tons a year
• From Northern Europe and the Mediterranean, Montréal provides the shortest and most direct access to key markets in North America

Business Climate

• Lowest effective corporate income tax rate in North America (31.02% in 2003)
• Investissement Québec offers financial assistance incentives, enhancing profitability and competitiveness
• Equity partnerships are available for investments looking to access North American markets

Cost Advantages

• 6.1% operating cost advantage over the U.S. average in chemical specialty products manufacturing (KPMG, 2004)
• Construction costs of a petrochemical plant in Montréal are lower than in the U.S. Gulf Coast or Chicago (Fluor Daniel)
• Electrical energy is very low cost, abundant, secure and clean (95% hydroelectricity)

Technology Infrastructure

• Montréal ranks 11 th in North America in terms of number of high technology jobs (E&B Data, 2002)
• High tech exports represent a growing percentage of international business (25.8% in 2002)
• Québec is at the heart of the Internet economy with 122 000 professionals in the IT industry

Research and Development

• The chemicals industry benefits from one of the most generous R&D tax incentives in North America
• The industry has access to a network of almost 50 R&D institutions renowned for solid expertise in chemistry and related fields
• The Québec government has developed an "industrial-research" connection program to facilitate integration with the R&D community

Quality of Life

• Québec's universal education system is one of the most modern in the industrialized world
• Canada ranks third in the world on the Human Development Index (U.N.)
• Québec ranks in the "top ten" within industrialized countries in terms of the health of its population

Clément Drolet, Director, chemical industries and metallurgy
E-mail: clement.drolet@mic.gouv.gc.ca
Tel.: (418) 691-5698, ext. 4872

Martin Roberge, Industrial Development Advisor
E-mail: martin.roberge@mic.gouv.gc.ca
Tel.: (418) 691-5698, ext. 4461

Québec Department of Economical and Regional Development
Web site: www.mderr.gouv.gc.ca