An expansion-minded inertnational pulse packing and export firm has pledged up to $50 million for a new Saskatchewan plant to process pulse crops for flours and food ingredients and durum into semolina for pasta.
Alliance Grain Traders (AGT) on Friday announced construction work on the plant is to begin in 2012 in the Global Transportation Hub (GTH), a new Regina industrial development devoted to transportation and logistics facilities needing central road, rail and intermodal access.
The AGT complex is planned as a milling facility to process durum for the production of its Arbella pasta brand in Canada, and to process pulse crops into pulse flours, starches, proteins and fibres.
AGT expects its distribution centre, to be built at the same site, will capitalize on the availability of ocean containers, trucks and intermodal container units at the Global Transportation Hub for domestic and export shipments. Canadian Pacific Railway has previously announced it will build a new intermodal facility at the GTH.
Upon the completion of the new plant, expected in mid-2012, the AGT facility is expected to generate 60 full-time jobs, the federal government noted in a separate release Friday.
“We have always been focused on creating value through origin-based processing, locating our processing facilities where high-quality crops are grown,” AGT CEO Murad Al-Katib said in the company’s release.
“We seek to create value for our farmer suppliers and our shareholders by shipping finished food products and not just the raw basic commodities to markets around the world.”
Arbella pasta, for instance, is a brand owned by the Arbel Group, an AGT subsidiary based in Turkey, where the company’s pasta is currently produced.
Canada, Al-Katib said Friday, is a “dominant world supplier of durum wheat and pulses. With our strong Canadian base built over the past decade, Western Canada was a logical choice for our new processing complex.”
Furthermore, he said, the GTH “will provide a competitive freight advantage for us that makes this a sensible investment.”
The Regina facility is expected to “solidify” AGT’s pasta milling capacity in Canada and move the company “further up the value chain in our pulses platform,” AGT chairman Huseyin Arslan said in the same release.
Nowhere in its release did AGT, which runs 12 pulse processing plants in Western Canada, mention or suggest the impending end of the Canadian Wheat Board’s single marketing desk for Prairie wheat, barley and durum as an incentive for the durum processing portion of its facility.
However, Prime Minister Stephen Harper and federal Agriculture Minister Gerry Ritz, both present Friday at AGT’s announcement in Regina, drew that connection in a separate release.
“This significant investment in Regina is positive proof that the government’s commitment to opening Canada’s grain markets is attracting investors that are generating new jobs and economic growth,” Harper said.
AGT’s announcement, the government said, builds on “economic opportunities created by the government’s commitment to end the single-desk wheat marketing system” through the planned passage of legislation expected to come into force in August 2012.
Pro-deregulation groups including the Canadian Federation of Independent Business, Grain Growers of Canada, Western Canadian Wheat Growers Association, Western Barley Growers Association and Alberta Barley Commission all issued statements Friday hailing AGT’s announcement as clear proof that an open marketing system will encourage further-processing of board crops on the Prairies.
“I’m already planning to increase my durum acres next year,” said Wheat Growers past president Cherilyn Nagel, a grain grower near Mossbank, Sask., about 70 km southwest of Moose Jaw.
The Wheat Growers also hailed the plant as “good news for Canadian consumers looking to buy Canadian.”
Right now, the group said, there are “few pasta plants on the Prairies and none of any significant size. North Dakota, on the other hand, is home to five pasta plants, including one plant that produces almost as much pasta as all of Canada.”
A pro-single-desk group, the Canadian Wheat Board Alliance, scoffed at the pro-deregulation sentiment, alleging previous plans to process pasta on the Prairies “could not get financing because the economics of processing durum wheat into pasta favours plants closer to major population areas.”
“While it is convenient for Harper and Ritz to hide behind this announcement, it makes me wonder how much federal incentive money has been promised to this company to construct and operate this plant,” CWBA chair Bill Gehl, a grower near Regina, said Friday.
Harper’s and Ritz’s presence at AGT’s announcement, however, did not come with any funding pledges for the facility. The government’s release specifically states the AGT project “will be funded through a $50 million private investment.”