Foray into bulk fertilizer pleases Federated Co-op

FCL sees more opportunities in the future after opening two prairie terminals to provide retail stores with product

HANLEY, Sask. — It recently opened and a giant fertilizer terminal is already being eyed for growth.

Located in Hanley, the 96,000 sq. foot facility is one of two terminals commissioned by Federated Co-operatives Ltd. as part of a $75 million initiative to provide Co-op Agro Centres and prairie producers with crop nutrition products.

“We’re constantly growing in the ag sector….This spot was built, as was our sister site in Brandon, they are both built to be expanded if the demand requires it, and we’re very optimistic that that might be an opportunity for us,” FCL chief executive officer Scott Banda said Sept. 5 during the facility’s grand opening.

Added Dan Mulder, the company’s director of fertilizer: “If the Co-ops keep on doing what they’ve done the last two years … I’ll be going to the senior leadership team at Federated and saying that, ‘hey, this growth is warranting a look to see if it makes sense to expand this terminal and the Brandon terminal.… There’s 77 Co-op retail outlets that are in the fertilizer business and we have approximately another equal amount that are in the Co-op input business selling seed and crop protection product but not currently selling fertilizer. So we see huge opportunity for growth in the fertilizer segment.”

The Hanley terminal has been operating since April. It has the capacity to store 45,000 tonnes of dry bulk fertilizer and can stock the four major primary nutrients: nitrogen, phosphate, potash and sulfur.

It has a declining weight, continuous flow blending system capable of mixing in micronutrient products as well as nitrogen stabilizers and conditioning products.

“If you have some dusty products, you’ll be able to get the dust down so that when it gets delivered to the retailer, to the farmer, they’ll get good quality product,” said Mulder.

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Both terminals can load a super B trailer of blended fertilizer in 10 minutes and dispense up to 400 tonnes of straight fertilizer in an hour.

“That is super fast,” he said.

“Some competitors would take 30 minutes up to one hour to load out so this is state of the art.”

Rail access is also capable of accepting unit trains that can bring product in from around the world, which Mulder said is strategic for the co-operative retail system.

Construction of both facilities was announced last year and completed on schedule and on budget. The terminals were built identically, except Brandon’s 27,500 tonne storage shed is half of Hanley’s capacity.

The Hanley operation employs five full-time workers, and Brandon has four.

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Mulder said the Hanley terminal will service Saskatchewan and parts of Alberta, while Brandon will look after Manitoba into areas of Saskatchewan.

“A lot depends on how we buy the product and how far we can reach, but typically speaking, we can ship about 300 kilometres in a concentric circle around each of the terminals,” he said.

Banda said the addition of centralized fertilizer distribution fills the gap in the Co-operative Retailing System’s value added chain, which also provides producers with fuel, animal feed, crop inputs, grain handling equipment, general merchandise and food.

“The ag space is one of the pieces of the economy that we believe will always be here. People have to eat. We have the land here in Western Canada, so we see an opportunity to grow in agriculture, but as we all know, it’s a very competitive space,” he said.

“A number of other competitors see that as well. We believe we have a real opportunity here because of our local presence. We have retail Co-ops that are embedded in communities all across Western Canada … and the fertilizer piece was the one that was missing for us to really focus on that to provide the complete package.”

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