SWIFT CURRENT, Sask. – It seems logical to process durum that’s grown on the Prairies, on the Prairies. But few processing companies have set up shop near the source.
Now Pasta D’Aurum (Canada) Ltd. is building its business here with what it calls “a logical move to be in Swift Current.”
Raising the money necessary to build a $60 million plant proved a challenge, but a company official says it is now achievable.
An offering memorandum is due out this week. It is designed to generate $1 million in capital that will finance an $8 million share offering which will further leverage financing already committed on the $51 million balance.
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Michael Bagley and Al Smith, both key players in the company, sit in the boardroom of their new main street office surrounded by plant plans, scale drawings and giant photographs of equipment they plan to have installed in the facility.
Bagley comes to the project with a background in developing and operating food-related companies in the United States. Smith has seen the local potential for pasta come and go before, but said this venture feels different.
Research complete
Bagley, the operations manager, said the new company has done its homework.
Pasta D’Aurum, unlike past failed ventures, has done the research and made the connections necessary to open the doors, he said. All that remains is the commitment from the community via the share offering.
“The level of commitment by the community is high and we are ahead of schedule in raising the necessary funds,” said Bagley, of the initial 57 shareholders.
“I wish selling tractors was as easy as selling these shares. We have been running just to keep up with it,” added Smith, a local farm equipment dealer and farmer. Smith, like Bagley, is optimistic about the company’s potential.
Unlike previous attempts to set up pasta plants in southwestern Saskatchewan, Pasta D’Aurum officials are working on signing contracts with buyers for one year of production before the plant even opens.
Also, Pasta D’Aurum is not dependent on government money or loan guarantees to build the plant.
Grain freight subsidies that made it more profitable for farmers to ship grain for overseas markets ended last year. That should spark more farmers to find local markets for their grain.
The plant is expected to produce 45 million kilograms of pasta annually and an additional 45 million kg of semolina flour for sale to other manufacturers and distributors.
“We are taking advantage of a demand for private label products and those companies’ recent increases in market share,” said Bagley.
Private label companies contract out the production of their products, eliminating the need for retail marketing by the production company.
“There has been interest in having us produce pasta for companies as far afield as Italy and from all over North America,” said Smith.
Planned to be built on 27 acres of land in Swift Current, the plant is expected to use seven million bushels of durum wheat annually and will be licensed to purchase direct from farmers.
Employment created
Creating 70 new jobs, the impact on the community of 16,000 could be significant, said Smith.
The city has one of the lowest rental vacancy rates on the Prairies and Smith feels this will create opportunities for home builders, as well as the spinoffs from the plant construction.
Pasta D’Aurum plans to break ground this May or early June with completion of the facility due in the spring of 1999.
