Frank Gatto has a tough sell ahead of him.
He has to convince growers around Lake Diefenbaker, Sask., to grow potatoes again.
Gatto is the president of an Alberta-based potato packer that purchased one of the main assets of the failed Lake Diefenbaker Potato Corporation. He needs more people to grow potatoes in that area to make the fresh pack plant viable.
“We would really like them to forget what has happened in the past and try potato production as part of their farming operation and we’ll do just fine,” said Gatto, who runs Pak-Wel Produce, Canada’s largest supplier of fresh table potatoes.
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“We know the first year we’re going to be groveling and begging the growers to haul to us.”
Pak-Wel bought the facility for $1 million in a complex deal involving Sask Water, one of three secured creditors from the LDPC debacle. The original cost of the structure was about $2 million.
Sask Water minister Maynard Sonntag said the move ensures the long-term viability of the potato industry in the province.
“I’m optimistic, as I was from the beginning, that we can redevelop and restructure this so that there will be a solid industry. I’m extremely pleased.”
Neil Thompson is the president of Riverhurst Agricultural Products, a seed potato production company in Riverhurst, Sask. He’s also pleased to see Pak-Wel moving in.
“I think everybody is looking forward to it. Pak-Wel has a good reputation. It’s been a solid Alberta company for a lot of years.”
But he doesn’t think it is going to have much success convincing people who rented land to LDPC to grow their own spuds.
“Not in the short term. I think there’s some guys still licking some wounds. (Pak-Wel) will have to prove themselves, there’s no doubt about it.”
He believes Pak-Wel is moving into Saskatchewan because it is worried about two new french fry plants in Alberta gobbling up potato production there.
Perfect bargain
Gatto said the Lucky Lake facility was a good fit at a great price. Pak-Wel’s Vauxhall, Alta., potato packing plant is operating at capacity. He said the company wanted to expand into another province so all its eggs weren’t in one basket.
The fresh pack plant, which cleans, sorts and packages potatoes for retail and wholesale markets, has the capacity to process 60,000 tonnes of potatoes a year. But Gatto said there is no way the firm could source that many spuds, since there are only 4,000 seeded acres in the province now that LDPC has gone bankrupt. He has no intention of flooding the market with fresh potatoes.
“We have to be very careful at all times that we don’t do this because we’re going to make a lot of enemies if we do and then we’re just going to repeat Lake Diefenbaker’s mistakes.”
Most of Saskatchewan’s production is potatoes used for seed. The fresh pack facility provides an outlet for seed potatoes that don’t meet specifications. But Gatto would like to see some people grow table potatoes.
Thompson said he’d consider that if the price was right. One advantage is that he may be able to direct-haul potatoes from his field to the plant and save on storage costs.
Gatto said the fresh pack plant will be in operation this winter and will prosper as long as Sask Water continues promoting the industry.
“If they do that we have absolutely no intentions on pulling the plug on this thing.”
