Cargill is moving its Saskatchewan feed processing operations out of Swift Current and into new digs in North Battleford, Sask., about 300 kilometres away.
Ron Meijer, director of corporate affairs for Cargill’s Canadian operations, confirmed last week that the company is selling its Swift Current feed plant and will move its feed processing operations to a North Battleford feed mill owned by the University of Saskatchewan.
The U of S recently acquired the North Battleford mill from Stomp Pork Farm Ltd., a Saskatchewan hog production company that was facing bankruptcy and forced to sell some of its assets to satisfy creditors.
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The university plans to establish a national feed research centre at the plant and will perform a multimillion-dollar renovation this summer.
When renovations are complete in late 2010, the mill will have a research milling component and a commercial feed processing component.
The agreement with Cargill will allow the company to use the mill’s commercial processing capacity.
“The primary function of the plant is as a research facility, but it also has an industrial production component and Cargill has partnered with the university to produce commercial feed out of the (commercial side of the) facility,” Meijer said.
“The key distinction here is that the research activities and the commercial processing component will be distinctly separate activities …. There is no overlap between the research and the commercial entity.”
Meijer did not provide financial details of the 10-year agreement, but he confirmed Cargill has also been contracted to conduct repairs and routine maintenance at the mill.
The university will conduct publicly funded feed research at the plant and offer feed research services to private sector companies on a contract basis.
Meijer said Cargill will not have preferential access to publicly funded research findings, nor will it have access to research conducted for private sector companies.
Nonetheless, the deal will allow Cargill to capitalize on key synergies, Meijer said.
“We’ve got an opportunity here to team up with a world class university to develop a world class research facility,” he said.
“This is an evolutionary step for our business. It takes us to the next stage in our commitment to being the partner of choice (for users of livestock feed).”
The sale of Cargill’s Swift Current mill to New Generation Pork Finishing Inc. of Hamiota, Man., is expected to close May 15.
Cargill employs 15 people at the Swift Current plant. They will likely be offered positions at the North Battleford operation, Meijer added.
Bernard Laarveld, a U of S feed researcher who spearheaded the national feed research centre at North Battleford, said the new facility will deliver far-reaching benefits for Canadian feed and livestock producers.
The plant will research, develop and commercialize new, high-value animal feed from low value feed crops and industrial byproducts such as dried distillers grains and canola meal.
In 2007, Cargill announced plans to build a second canola crushing facility in Clavet, Sask., 160 km east of North Battleford.
The Clavet facility was expected to double Cargill’s canola processing capacity in Saskatchewan to 1.5 million tonnes per year.
