Canada’s transportation quagmire has bogged down to the point where special crop firms are choosing to expand south of the border, says Pulse Canada.
Greg Cherewyk, the group’s director of market development, told the standing Senate committee on transport and communications that according to Murad Al-Katib, president of Saskcan Pulse Trading, Canada has become the world’s least preferred supplier of pulses and special crops because of its unreliable transportation system.
“It is also worth noting this same gentleman’s company has had to make a decision to expand and develop its next processing plant in North Dakota,” Cherewyk told the senators.
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“The comment he made to me is that 95 jobs are going to North Dakota instead of Canada because of the transportation system. He gets more reliable transportation in the United States.”
Saskcan Pulse isn’t a run-of-the-mill processor. The Regina firm is part of Arbel Pulse, Grain, Industry and Trade S.A., one of the world’s largest splitters and exporters of lentils. Saskcan’s president is also president of the Canadian Special Crops Association and vice-chair of Pulse Canada.
Al-Katib said Saskcan has made no formal announcement on the North Dakota project but acknowledged he is strongly considering the American state as a location for what would be the firm’s fourth pulse processing plant, adding to existing assets in Regina, Rosetown and Aberdeen, Sask.
While transportation isn’t the only consideration for expanding south of the border, it is certainly one of the key factors pushing the company in that direction, especially in light of the recently resolved strike at Canadian National Railway.
“In the past nine months we have had two major labour disruptions that have crippled ag processors’ ability to bring our product to market,” he said.
Al-Katib said the Port of Vancouver was a disaster before the strike and is even worse now, which is why Saskcan isn’t the only Canadian special crop firm eyeing alternative transportation routes through ports in Seattle, New Orleans and the Gulf of Mexico.
“In a general sense transportation is affecting our industry’s ability to recover returns from our invested capital. This is something that all levels of government need to take seriously.”
Product that should take 40 days to get to market is taking up to 70 days because of chronic rail problems, labour disruptions, transloading issues and overall system congestion. It’s why customers prefer buying lentils from Australia and Syria despite having access to better quality product in Canada.
Al-Katib said his company can’t ignore North Dakota’s explosion in pulse crop acreage or its access to more efficient transportation routes. He wouldn’t provide details on the proposed splitting and cleaning plant but indicated an announcement is possible in two to three weeks.
Meanwhile, a competing firm is proceeding with an expansion project in Saskatchewan.
Simpson Seeds is building a pulse splitting plant next to its two lentil processing facilities in Moose Jaw. Construction should be complete by the end of this year with product rolling out of the plant by early 2008.
The splitting facility will be able to operate in a variety of prairie weather conditions and will process red and green lentils along with chickpeas.
Company manager Tyler Simpson said he understands Saskcan’s frustrations with the transportation system, but for Simpson Seeds it made more sense to build on its existing site.
“We felt that being in the heart of production was something that was more important,” he said.
As well, Simpson is encouraged by talk of an inland container port that may be built in Regina, Saskatoon or Moose Jaw.
“I think that would obviously help,” he said.
