London Inc. Weekly

London Inc. Weekly: A summary of regional business news from the past week

Photo: Vessl Prosthetics co-founders Oleksiy Zaika and Sydney Robinson

Weekly Regional Business Intelligence

Written by Kieran Delamont, Associate Editor, London Inc.

Mayor focuses on lingering core issues, taxes in annual State of the City address

Addressing more than 1,000 attendees at the annual London Chamber of Commerce event on Thursday morning, Mayor Josh Morgan used the State of the City address to unveil a new incentive program aimed at reversing the trend on downtown commercial vacancies. Morgan said the program, which still lacks details, would be modeled on the city’s office-to-residential conversion incentive program and would provide financial assistance to help cover startup and renovation costs for eligible businesses that are looking to re-activate vacant commercial units. “We are keenly aware that there is too much vacant commercial space downtown,” Morgan said. The announcement came in addition to other downtown-focused references in his address, which touched on plans to increase police presence in the core, as well as “more announcements” related to the residential conversion projects. “I am very optimistic. The day I can walk into a new business that was a beneficiary of that program that wasn’t there before, I’m going to be a pretty happy mayor.”

The upshot: The expansion of the incentive program to focus on commercial units will hopefully bring some relief to the downtown core, although its office-to-residential predecessor has been slow to get uptake from developers (although the mayor did tease more announcements in the coming weeks on that front). Elsewhere in the speech there was additional news to chew on, including promising statistics on crime ― the mayor noted that the drop in crime severity London saw last year was the largest in Canada ― and a pledge his use of strong mayor powers to limit next year’s property increase to five per cent. That will likely be one of the biggest talking points coming out of the mayor’s address, in part because he was frank about the fact that it would mean making cuts elsewhere. On this point, he raised an issue that many other mayors are talking about ― the funding formula for municipalities in Canada, saying that what was needed was “a new deal for London,” adding that “we cannot build a 21st century city on a 19th century funding formula.” And following a tradition that the event also include the unveiling of a new-to-town business, the mayor announced that B.C.-based snack foods manufacturer Inno Foods would be opening a 90-employee plant at Innovation Park in the near future.

Watch address: London Chamber of Commerce

Vessl Prosthetics successfully completes first funding round

A local startup specializing in prosthetics systems has raised enough money to push ahead with the development of its new prosthetic technology. Vessl Prosthetics, co-founded by Oleksiy Zaika and Sydney Robinson (pictured) and operating out of the BioNext Incubator at Western University, said the money raised in their pre-seed funding round will allow them to “accelerate the development of its cutting-edge prosthetic devices, advancing the company’s mission to empower amputees to live fuller, more independent lives.” Vessl’s marquee technology is its Isoform prosthetic socket, a technology designed to solve the issue of poor prosthetic socket fit, particularly for the lower limbs.

The upshot: The technology that Vessl is working on has apparently shown a lot of promise for amputees, who often struggle with the issue of fitting their prosthetics due to the natural expanding and shrinking of human limbs over the course of the day. “The socket we’re designing has inner panels that allow for expansion and constriction around the limb,” Robinson told the University of Waterloo a couple years ago. “Our socket will allow for gradual and continuous constriction onto the limb to maintain a snug fit.” Robinson said the successful completion of its first funding round (the amount has not been disclosed) will allow the fledgling business to go from promising tech to marketable product. “We built the car and now we actually have to drive it,” Robinson told Communitech. “This fundraise lets us ramp up our scale and move onto things like hiring, buying, expanding operations and marketing. The fundraise ultimately brings us to market to expand our manufacturing team, sales team and everything we need to do for that.”

Read more: Vessl | Communitech

Will Vianode plant land in SWO?

Could Southwestern Ontario be set to land another major investment in the EV supply chain? It’s being mooted as a possibility. Vianode, a Norwegian company, recently signed a deal with General Motors to supply synthetic graphite for GM’s Ultium batteries, which they produce at the CAMI plant in Ingersoll. The company has not announced anything specifically, but they have several job ads posted for an “exciting new large-scale plant in Canada,” and created a Toronto-based subsidiary company (Vianode Canada) last year — leading many observers to conclude that the plant will likely be located in Ontario. “We are in advanced negotiations, and we hope to be able to announce the site within a couple of months,” Vianode’s CEO, Burkhard Straube, told The Globe and Mail last week. “What I can say is the site is in the proximity of the U.S.-Canadian automotive cluster.” Little has been confirmed, and few people are speculating as to the specific location of the plant, but this will be one to watch over the next couple of months and could very well lead to another big industrial catch for the region.

The upshot: There’s just that pesky matter of the looming tariff war to think about. There are few industries that are as integrated across national borders like the North American automotive industry, so if tariffs are slapped on Canadian exports, automotive experts say it will devastate the auto industries of all three North American countries. The EV supply chain is no exception, so it might not be a surprise if Vianode hedges a bit on announcing anything concrete, while the chaos of potential tariffs works itself out. “The entire EV ecosystem depends upon the import of one critical mineral,” Straube told Reuters. “What General Motors wants and we want is a resilient supply chain for North America.” All that said, with potential elections provincially and federally on the horizon, it may not be all that surprising to see various government officials itching to announce a major new plant in the near future ― so this is one to keep an eye on.

Read more: GM Authority | The Globe and Mail

Two planned plants pull out of city

While Vianode raises the exciting prospect of a new industrial facility coming to the region, there was some bad news this week, as two planned facilities announced they were scrapping their plants in London. The first was Anvo Pharma, which has halted work on its plant on Bonder Road (pictured), according to local MP Peter Fragistkatos, who told The London Free Press that Anvo “made a business decision to go in a different direction.” The second was the China-based Maple Armor Group, an alarm systems manufacturer, which had planned to expand into Ontario after it bought 14 acres of land in Innovation Park last August. In its case, they specifically cited the tariff threat and are holding off on expanding into the U.S. market. “There’s too much uncertainty,” said the company’s operations advisor Harry Yang. “If we were to build a bigger plant here, we would need to sell into the U.S. It’s too chaotic right now. It’s better for us to take a safe approach.”

The upshot: Even just the threat of tariffs is enough to scuttle things here. “There’s a high level of concern,” the manager of the London Region Manufacturing Council, Jason Bates, told the Free Press. “The unknown is scary in business and there are no answers out there right now.” Kapil Lakhotia, CEO of the LEDC, called Maple Armor’s departure “a lost opportunity.” In the case of Anvo Pharma, a lot of that expansion was being financed by a $4-million loan from the federal government; Anvo Pharma said they will be repaying the loan starting in March, and the partially-finished building was listed for sale in December.

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