Worth investment | Richardson Oilseed says growing international demand has spurred expansion
Richardson Oilseed Ltd. plans to double capacity of its canola processing plant in Lethbridge, raising its daily handling to at least 2,400 tonnes per day.
Senior vice-president Pat Van Osch said March 20 that the company will use what it learned in building its facility in Yorkton, Sask., to increase efficiency and automation at its older plant in southern Alberta.
“Our operating costs in Yorkton, as an example, are quite a bit lower than what they are in Lethbridge,” he said.
“We plan to kind of mirror the two and capture as much of that spread as we can.”
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The news was greeted with enthusiasm at the Alberta Canola Producers Commission.
“It’s a fabulous thing for the first day of spring,” said general manager Ward Toma.
“There’s lots of volume out there and there’s lots of demand internationally for the product, and I think that’s why Richardsons is moving on this. Every other facility in the Prairies has been upgraded or expanded, so that says one thing: the companies have decided the industry is worth investing in.”
Van Osch said Richardsons is in-volved in preliminary engineering work, after which it will tender contracts for construction. That is expected to start in early 2014 with targeted completion near the end of 2015.
He said a projected reduction in canola acres for the 2013-14 crop year is not a concern, considering long-term prospects, and the company is confident it can source enough seed for its two plants.
“Acres are going to be down, but there’s still talk of 20 million acres in Western Canada, which is a significant amount of acres relative to where we were two or three years ago.
“Going forward, are there more acres? That, I guess, will be determined. Can you get to 30 million acres? Probably not, but where your growth can still come from is in production per acre, both seed production per acre and oil content of the seed.”
Toma also said supply is not likely to be an issue. Average canola yields on the Prairies have risen by 10 bushels per acre over the past 10 years, he added, and demand for product continues to grow.
Richardson has acquired additional land in Lethbridge to the north of its current site and is studying street and rail spur operations to address potential traffic congestion issues in the city’s busy industrial area.
A $15 million expansion to the plant’s packaging, blending and storage facilities last year increased its footprint by 40 percent, and the next one will add another 25 percent to the footprint, Van Osch said.
Staff increases are unlikely because additional automation and use of new technology in the expansion are expected to improve efficiency.
Richardson is also in the process of expanding its Yorkton plant to in-crease crushing capacity by 25 percent, which will allow volumes of 3,000 tonnes per day.
Van Osch said the two plants are well positioned.
“Lethbridge is well located to service the western U.S., Western Canada and export markets, given its location,” he said. “The Yorkton facility is well positioned to service the rest of North America and also is competitive into the export market.”
