Plant announcements build local economy
A lot of eyebrows were raised when the Province of Saskatchewan and Cargill teamed up to build the Saskferco nitrogen fertilizer plant at Belle Plaine in 1984.
The $435 million investment with the Conservative government footing 49 per cent of the bill caused more raised eyebrows.
When Yara, owner since 2008, announced the other day it will more than double production at the plant, it was just another solid good news business story of the day.
Back in the 1980s, a million dollar investment in Saskatchewan was a pretty big deal — not just because dollars were worth more then either. Business just wasn’t making big investments in Saskatchewan. To get the plant here, the Saskatchewan government had to buy into the deal.
That is no longer the case. Saskatchewan resources and the global need for them have caused a blizzard of investments from all over the world to fill market needs around the globe
Yara paid $1.6 billion — a 267 per cent gain on the province’s investment — for the plant in 2008. Now, the Norwegianbased Yara will basically build a new plant beside the existing facility at Belle Plaine.
The Saskferco plant was state of the art 22 years ago when it was built. It used one-quarter less natural gas than older competing plants in Canada. No doubt the Yara expansion will take the technological efficiencies even further.
Currently Yara produces 1.1 million tonnes annually of urea fertilizer. The expansion will increase production by 1.3 million tonnes.
The Yara announcement is a mixed bag for Moose Jaw. Hundreds of construction jobs will be created in the years until 2016 when the production starts and dozens of new jobs will be created.
That is great news for the local and provincial economy, but presents a challenge to local business. Where will these people stay? The city rental vacancy rate is at a low now and the expanding supply of new residential lots can’t keep up with demand from builders. As someone said recently, those are nice problems to have, given our slow-growth-no-growth past.
Another announcement reflected the strength of the agricultural sector in this part of Saskatchewan. The announcement teaming up Agrocorp International of Asia, McDougall Acres and other investors in a major pulse processing plant in Moose Jaw indicates just how the agricultural processing industry holds opportunities.
While the new plant on the CNR line in Moose Jaw will have capacity to handle pulse crops, canola and the former wheat board crops like wheat will be part of the operation here.
Construction will be completed later this year on the high throughout processor that will employ up to 20 people.
Agrocorp is a $1 billion annual operation with connections around the world. To have the company invest here is a true catch.
And this investment builds on the grain industry infrastructure in Moose Jaw, long known for its role in the grain business.
Ron Walter can be reached at firstname.lastname@example.org