Canola drives growth at port facilities
Canola is Canada’s other major oil export, and Vancouver has just seen its capacity to ship a lot more of it rise within a surging tide of agricultural exports flowing through Port Metro Vancouver.
West Coast Reduction Ltd. last week finished a $ 9.5 million expansion ($ 2.8 million of that from Transport Canada’s Asia- Pacific Gateway infrastructure fund) of the rail unloading and handling facilities at its port storage and export facility aimed at increasing its export output by at least 25 per cent.
“The 25- per- cent number is a conservative number,” said Ridley Beswick, West Coast’s chief financial officer. “We see the expansion taking us from 700,000 tonnes ( output per year) to somewhere between one and 1.1 million tonnes.”
Most of that oil, and most of the growth, will be canola, crushed from the seeds of the yellow- flowering prairie field crop, which will be pumped onto ocean- going tankers to mainly Asian markets.
What’s driving West Coast Reduction, which also operates the biggest independent animal rendering plant in Western Canada, is the expectation by the Canola Council of Canada that the country’s canola processing capacity will double by 2025, claiming a bigger share in Canada’s expanding exports of food and agricultural products, which, by the count of Export Development Canada, totalled $ 56.3 billion in 2014.
Most of those shipments went to Canada’s biggest trading partner, the U. S. ($ 29.4 billion in 2014), but steadily increasing amounts are going to emerging markets in Asia ($ 8.5 billion in 2014).
Physically, West Coast Reduction expanded its capacity to accept 24 tank cars per rail delivery ( up from 16), improved pumphouses, increased its on- site pipeline capacity to deliver oil to its waterside berth and installed new headers that deliver product to ships.
B. C. grows only about one per cent of the country’s total canola- seed output, but overall Canada produces about three million tonnes per year of canola, and exports in the order of 2.5 million tonnes. Exports to China within the last five years have ranged from a low of 440,000 tonnes in 2009 to a high of one million tonnes in 2012.
“In particular, there is strong demand from Asia Pacific markets,” Beswick said, with West Coast Reduction serving as the conduit for about 65 per cent of Canada’s exports for a variety of producers, including agri- business giants Cargill and Richardson International Ltd.
West Coast Reduction’s project appears small, however, in comparison with some of the other facility expansions in Port Metro Vancouver, starting with Richardson International’s $ 120- million effort to increase storage to raise its throughput capacity to five million tonnes per year.
“We’re seeing growth ( in exports) as a result of investments that have been made ( in facilities),” said Doug Mills, senior account representative for trade development at Port Metro Vancouver.
In 2014, Port Metro Vancouver reported that its terminals handled a record 19.6 million tonnes of grain, seeds and other crops, a 22- per- cent increase from 16 million tonnes in 2013.
“We’ve had two record years,” Mills said, “and the indications we’re hearing are that this isn’t so much a blip as it is they’re claiming this is a new normal.”
Not that the port expects such banner years every year, Mills said. The previous two years were aided by a 2013 bumper crop on the Prairies.
However, the economic trend they’re feeding is growth of the middle class in emerging Asian markets.