SASKATOON – Farmers in west-central Saskatchewan could soon have another buyer for their grain.
North West Terminal Ltd. (NWT) has begun selling shares to raise money for a new inland terminal at Unity, about 200 kilometres west of Saskatoon.
If the share offering is successful, the terminal could be buying 100,000 to 150,000 tonnes of grain next winter, said Bob Cumming, chair of NWT’s board, which is made up of eight local farmers.
That will mean some intense competition with grain handlers already operating at Unity. Saskatchewan Wheat Pool will open a new high throughput elevator there in the fall and Cargill Ltd. also has a facility.
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“The competition in this area will be really tough and that’s a plus from the farmers’ point of view,” said Cumming.
“I really feel grain companies and farmers have got a little complacent over the years and I think it’s good to see a group of people get together … to get a little more control of their own future.”
UGG a major shareholder
Details of NWT’s share offering were released at a public meeting in Unity Feb. 29, where it was also announced that United Grain Growers will be a major shareholder and operating partner in the project.
The shares, priced at $100 each with a minimum purchase of 25 shares, will be for sale until July 29. Twenty-six sales people are on the road, with eight or nine public meetings also scheduled.
The size of the terminal will depend on how much money is raised.
- If the minimum 17,500 shares are sold, raising $1.75 million, and at least 350,000 bushels of condominium storage space is sold for another $700,000, the terminal will have a storage capacity of 350,000 bu.
- If the maximum 40,000 shares are sold, raising $4 million, the terminal will have a capacity of 650,000 bu. In that case, it will be built regardless of how much private storage space is sold.
UGG has agreed in principle to invest at least $250,000 and loan up to $1 million to North West. UGG will assist in designing the terminal and provide training and marketing advice. All of NWT’s board grains will be consigned to UGG terminals in return for a fee and UGG will have first right of refusal to buy NWT’s non-board grains.
While the official closing date of the offering is July 29, Cumming said the realities of farming dictate that the sooner shares can be sold, the better.
“We’d like to get as much done as we can by the end of April or the first of May,” he said. “I know it will slow down then so we’re really pushing it.”
The proposed terminal will be able to clean all grains to export standards, thus reducing transportation costs and providing screenings for sale to local feed markets.
