A well-known southwestern Saskatchewan company making portable belt conveyors for the grain, seed and fertilizer markets plans to retrofit a recycled paper processor's building as its new and expanded factory.

Batco Manufacturing, the founding company of grain handling equipment maker Ag Growth International (AGI), plans to spend $8.7 million to buy and renovate the former UFR Urban Forest Recyclers plant in its home town of Swift Current, Sask.

The UFR plant, which had made recycled-paper products such as bulk egg trays and fruit packaging trays, would give Batco about 114,000 square feet of manufacturing space, up from 33,500 today.

Batco, which started in 1992 as a two-wheel hand cart manufacturer, shifted to conveyors and has boosted its sales "exponentially," to the point where it has maxed out its current plant capacity, Winnipeg-based AGI said.

AGI, in the former UFR plant, would set up a new powder coat paint line and new "lean processes" for Batco, both expected to "increase quality and productivity with the potential to double capacity," the company said in a release.

"We believe that there is opportunity for significant growth in the farm and custom conveying market for seed, fertilizer and grain handling," said Gary Anderson, CEO of AGI, which shifted from an income trust to a publicly-traded corporation in 2009.

"The investment in a larger facility will enable AGI to capitalize on the growth potential with current products and increase our capability to bring innovative belt conveying technology to the market."

Batco's belt conveyors are designed mostly for pulse crop, corn, bean and seed plant applications and are meant as a safer handling method for more "delicate" specialty crops, seeds and other commodities, which are known to be "very susceptible to impact damage caused by conventional grain-handling systems."

The project costs would be funded from the sales of Batco's current plant and of other AGI-owned properties "not currently in use," the parent company said last week.

Batco, which employs over 70 people at Swift Current, said its move to the new plant would be staged to ensure "no interruption in Batco sales" on the way toward full operation at the new site in the fourth quarter of this year.

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Ag Growth buys Kansas conveyor maker, Dec. 23, 2010