Company says rail, road and utility strengths made Regina a good home for new facility; construction to start next year
Regina is poised to become the new hot spot for Canada’s canola crush sector.
Cargill and Viterra have both announced plans to build large facilities in the city that will be operational by 2024.
Cargill intends to break ground on its $350 million plant early next year.
“Regina fits really well with our footprint,” said Cargill Canada president Jeff Vassart.
That footprint is made up of existing plants in Clavet, Sask., and Camrose, Alta. The Clavet plant can process 1.5 million tonnes of seed annually, while the Camrose facility consumes one million tonnes.
The company has a “few parcels” of land around Regina and will finalize the location of the plant in the coming weeks.
Regina’s rail, road and utilities infrastructure and skilled workforce made it a logical place to build.
So logical that competing grain company Viterra also announced plans to build what will be the world’s largest crush plant in the same city, capable of processing 2.5 million tonnes of canola annually.
The Cargill plant will be similar in design to its Camrose facility. It will have the capacity to process one million tonnes of canola annually when it is commissioned.
The Regina investment represents a natural progression for the company. The Clavet plant opened in 1996 and was expanded in 2009. The Camrose plant was commissioned in 2015.
The canola drawing area for the new plant is expected to include farms in southern Saskatchewan and southwest Manitoba.
Vassart believes there will be enough canola to satisfy all the new domestic demand, including the doubling of the Richardson International plant in Yorkton, as long as farmers are given the right tools to increase production.
Cargill is a firm believer in the Canola Council of Canada’s target of having 26 million tonnes of production by 2025, up from 18.7 million tonnes last year.
Chris Vervaet, executive director of the Canadian Oilseed Processors Association, shares that view.
“I’m certainly optimistic that we will continue to see a supply response from canola farmers in Canada,” he said.
Vassart said Cargill works with food customers all over the world and continues to see strong demand for canola oil, which is a healthy and sustainable product.
That sustainability aspect also fits in nicely with the emerging renewable diesel industry, which is exploding in the United States.
On the meal side, he expects continued robust demand from the U.S. dairy industry but is also anticipating growth in overseas markets.
“There’s going to have to be exports given the amount of meal that’s going to be produced, so those international markets become really important for us,” he said.
Cargill announced it will also be modernizing its plants in Camrose and Clavet over the next 12 months to increase processing capacity and “broaden capabilities” at both locations.
“Through these projects, we’re committed to providing a better, more efficient customer experience across our network, making it easier to do business with Cargill,” said Vassart.
The Regina plant is expected to create 50 permanent full-time jobs in addition to hundreds of jobs during the construction phase, which is welcome news for a city emerging from a global pandemic.
“Agriculture can play a really strong role to help our economy recover,” said Vassart.
But the city may be losing out on another large project.
Federated Co-operatives Limited recently announced plans to build a renewable diesel refinery that would produce one billion litres of the fuel annually.
Company executives said the plan was to build the $2 billion megaproject in Regina adjacent to its existing refinery. They said the project would include an “ag complex.”
But FCL’s officials said the Regina project is now in jeopardy and may have to be relocated because the city agreed to an option to sell that land to Viterra for its crush plant.
FCL says it is continuing to evaluate its potential renewable fuels investment and is evaluating “all options” on the feedstock side, including building its own crush plant or sourcing oil from existing or planned facilities.