Tobacco Plant Now High Tech

Source from:  oug Hallett, Guelph Jim Estill (Jan 12, 2007)  01/15/2007

The Imperial Tobacco property is set to become the largest Canadian locale of a U.S.-based wholesale computer distributor, after Linamar Corp. bought it and then decided it wasn't suitable for an advanced manufacturing technology centre. Synnex Canada Ltd. plans to relocate its 130-employee Guelph area operation to the Imperial property and also close its Toronto warehouse, creating 250 extra jobs in Guelph, Synnex Canada CEO Jim Estill said Thursday. These jobs will be offered to employees in the Toronto warehouse, "but I don't expect many of them will want to move," Estill said by phone from a consumer electronics show in Las Vegas. The Imperial plant will be used for warehousing and light manufacturing of computer equipment, he said. It will also do customer service for Synnex for all of North America on some product lines. The number of employees now doing this work in Guelph will likely rise from the current 15 to about 60, he said. The two-level, 619,000-sq.-ft. plant on 30 acres at 107 Woodlawn Rd. will now be Synnex Canada's biggest location, he said. Currently, Synnex's biggest locale is in a Toronto office tower, which will remain in use. "We are a growing company, so I am not at all concerned that we will fill it," Estill said of the sprawling former cigarette manufacturing plant. "This is a very good news story for Guelph," although it's not good news for his Toronto employees who will lose their jobs, said Estill, who started a similar company called EMJ Data Systems in Guelph in 1979 and sold it to Synnex in 2004. After selling EMJ, he stayed on as CEO of Synnex Canada, working out of 70,000-sq-ft. offices on County Road 124 just outside the city. The Toronto warehouse that will close is 140,000 square feet, and Synnex also rents perhaps 50,000 square feet of temporary warehouse space in Toronto. In addition to the 250 extra jobs being created in Guelph, Synnex plans to hire about 100 students to help it set up its operations in the Woodlawn plant this summer, he said. On Tuesday, Linamar announced that it had bought the property from Imperial and had entered into an agreement to resell it to Synnex, which had been one of the unsuccessful bidders for the property. The identity of the buyer of the property wasn't disclosed when news of the sale broke last week. Linamar said it is looking at other sites in Guelph for an advanced manufacturing technology centre after buying the Imperial property and then deciding it wasn't suitable. "The (Imperial) building layout and structure would have required modification, and we felt that we could find another site that would better accommodate our needs," Jim Jarrell, Linamar's president and chief operating officer, told the Tribune on Wednesday. As an alternative to the Imperial site, "we have space in some of our existing facilities that we are going to reassess in order to find the best location suited for the new centre," Jarrell said in an e-mail while out of town on business. "We are also looking at opportunities in Guelph outside of" existing Linamar plants for the new technology centre, he added. The technology centre, which is to be dedicated to innovation in the engineering and production of automotive powertrains, was a big part of a deal announced with great fanfare at a news conference in Guelph featuring Premier Dalton McGuinty last May. The government announced it would invest $44.5 million to help establish the centre, support research and development, and invest in skills training for workers, while Linamar would invest more than $1 billion as part of the five-year deal to create 3,000 new jobs. Linamar entered the bidding process for the Linamar property "in an attempt to secure a potential site for its future research and development centre last summer," the company said in a news release Tuesday. It said that as the successful bidder, Linamar moved forward with the purchase, but "toward the end of 2006 and into 2007 determined that this was not the ideal site" to house the new centre. Linamar then entered into an arrangement with Synnex to buy the "surplus property" when the original purchase deal closes. "Linamar has a firm deal with Imperial Tobacco and, of course, intends to fully honour that deal and purchase the property," Jarrell said in the release. "However, after reassessing our business needs, and given Synnex's previous interest in the property, we decided to make an arrangement whereby Synnex would ultimately become the owner of the property once our sale with Imperial Tobacco closed. "This solution will be a great one for all involved and ensure the property remains used, viable and vital in the City of Guelph." Enditem