Saskferco Products Inc. has begun an $84 million expansion that will increase production but will not likely result in cheaper fertilizer for farmers.
Ten years after a 50 percent production increase, the Belle Plaine, Sask., plant will see urea production increase by more than 400 tonnes per day, or 14 percent. Ammonia production will go up 200 tonnes per day, or 11 percent.
The expansion will be completed during the planned shutdown in June 2009. It won’t result in new permanent jobs, although the economic spinoff from the construction will be significant.
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Bruce Hope, vice-president of manufacturing, said the expansion is small in terms of the entire western Canadian market but is “an investment we think will pay.”
He said although changes in supply should lower prices, that’s not likely. Prices are set by worldwide supply and demand and North America is a net importer of nitrogen.
Some say western Canadian farmers should pay less for fertilizer because it’s manufactured here. But Hope said significant transportation and natural gas costs figure into the pricing.
“The farther you come north, the higher the price seems to be,” he said.
If anything, he said, prices in Western Canada are lower than they would otherwise be if the product had to travel further.
Saskferco, a joint venture of Mosaic Co. and the Saskatchewan government, has operated for 15 years.
This will be its third expansion, after a 1997 increase in urea production and the 2004 construction of a urea ammonium nitrate (UAN) solution fertilizer facility.
The plant’s daily production is 2,850 tonnes of urea, 1,860 tonnes of anhydrous ammonia and 670 tonnes of UAN at 28-0-0.
