Belle Plaine official site for $1.76B fertilizer plant

REGINA — A four-year-old dream to build a farmerowned nitrogen fertilizer plant “somewhere in Western Canada” now has an official site for the proposed $1.76-billion project — Belle Plaine — right in the middle of the Regina-Moose Jaw industrial corridor.

Farmers of North America (FNA) Fertilizer Limited Partnership, which was formed in 2010 with the objective of building a nitrogen fertilizer plant in Western Canada — where fertilizer prices are the highest in the continent, but production costs the lowest — made the announcement at Canada’s Farm Progress Show (CFPS) here Wednesday.

“This is about farmer-investors owning a plant that produces a product that they themselves create a growing need for,’’ said Bob Friesen, former president of the Canadian Federation of Agriculture and spokesman for FNA Fertilizer LP. “(This is about) farmer-investors getting their annual nitrogen needs at discounted prices, as well as a robust investment return at the end of the year. This is about farmer-investors capturing the manufacturing margin of nitrogen fertilizer.’’

Friesen said Belle Plaine is an ideal site for an industrial project of this type. “It’s got access to both national railways, it’s got access to water supply, natural gas and road infrastructure. And we also believe that ... we will have the labour pool that we need.”

Friesen added the types of industries already located in the Regina-Moose Jaw corridor make it a logical place to locate the FNA plant.

One of those industries is the Yara nitrogen fertilizer plant, which has the lowest production costs of any fertilizer plant on the continent. But Friesen said locating the plant about two kilometres north of the Yara plant is not an attempt to steal market share from the Norwegian company, which purchased the Saskferco plant for $1.6 billion about five years ago.

Friesen said North America is 7.6 million tonnes short of nitrogen fertilizer production, so there’s room for more nitrogen fertilizer plants. “It doesn’t really matter where the other fertilizer plants are. The key is Western Canada is the lowest cost place to produce nitrogen fertilizer.”

Yet western Canadian farmers pay the highest prices for nitrogen fertilizer in the continent. That’s the main reason Saskatoonbased FNA, which has about 10,000 members in Canada, is attempting to raise seed money in Western Canada for the $1.76-billion plant.

Thus far, about 2,400 farm- ers have contributed about $8 million in “seed capital units’’ of $1,000, up to a maximum of $10,000. The seed capital is being used to fund engineering and environmental studies, financial modelling and other preconstruction work.

“The $1.7 billion is a daunting number when you look at it in aggregate,’’ Friesen admitted. “However, when you break it down on a per-tonne basis or per-acre basis, the amount of investment required from farmers is quite manageable.’’

And FNA has other partners to raise capital when the equity financing phase of the project begins. The project is expected to create 1,900 construction jobs and 170 permanent positions when the plant is in fullproduction at one million tonnes of ammonia equivalent per year.

“We are hoping to go into production in 2017.”