Quebec composites firm sets up NH foothold for Buy America

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Deflex Composite Inc. Deflex Composite Inc. makes large exterior parts for transportation vehicles including those used in public transit.

A Quebec plastic composites producer is locating an operation in northern New Hampshire to take advantage of the U.S. Buy America Act.

Deflex Composite Inc. decided to set up a satellite plant in Berlin, N.H., about 164 miles from its Saint-Victor, Quebec, headquarters. The firm is leasing a 9,600-square-foot facility where 10 employees hired this year will make front and rear bumpers for Volvo buses.

The Buy America Act stipulates that companies in federal contracts must source most of the labor and manufacturing within the United States. U.S. municipal bus fleets often rely partially on federal funding for their purchases.

Deflex is a small part of Quebec's large composites manufacturing sector that grew up with Bombardier and other OEMs making transportation vehicles like subway cars and airplanes, as well as snowmobiles and other power sports products. New Hampshire shares a border with Quebec and many of its residents have family roots in Quebec.

"Proximity was a big factor for Deflex," explained Benoit Lamontagne, an official with New Hampshire's Division of Economic Development. Deflex employees can reside in Quebec and work in the nearby state, he said in a phone interview.

Lamontagne and colleagues held a seminar in Montreal a few months ago to highlight advantages of locating a business in New Hampshire and they received a lot of interest. The state has several advantages compared with other U.S. states, according to Lamontagne.

New Hampshire doesn't collect sales tax, has no personal income tax and no machinery or inventory taxes, Lamontagne explained. Manufacturing wages can be lower than in some states because a worker's disposable income would be comparable because of the lower tax burden.

Lamontagne said composites production is growing in his state. Several large aerospace firms have set up businesses in the state. And Canadian companies involved in federal contracts could expand into New Hampshire to meet Buy America obligations.

"A lot of Quebec companies are involved in subway train projects," stated Lamontagne. "They need a physical presence in the United States."

Federally subsidized transportation contracts can last as long as 15 years, making U.S. production economically viable.

Deflex will receive financial assistance from New Hampshire for training. The company also qualifies for loans guaranteed by the state.

Lamontagne said the educational environment in New Hampshire also supports the composites sector. Great Bay Community College with two campuses in the state specializes in composites.