May 25, 2021

By Lynda Kiernan, Global AgInvesting Media

There’s a gold rush underway in Saskatchewan – however, this gold is the golden fields of canola – and it may be due to climbing demand for biofuel, and environmental pressure. 

In little more than a month, three major companies have announced plans to build massive canola crushing plants in the province through projects that carry a combined value of more than $1 billion.

Viterra

After weeks of circulating rumors, Viterra and the government of Saskatchewan announced plans to build the largest canola crushing facility in the world in Regina, Saskatchewan – a location chosen for its consistent and expanding access to canola seed and its access to both CN and CP railways and the Regina bypass.

Engineering is underway and preliminary work is being done with construction slated to begin in early 2022, according to Kyle Jeworski, CEO, Viterra North America.

This facility, which will have a capacity of 2.5 million tons, will dwarf Viterra’s largest crushing facility in Eastern Canada today, which has a capacity of 1.1 million tons – and if viewed as its own market, would be larger than what Japan or Mexico buy from Canada in any given average year.

The project is projected to employ 1,000 people during construction and 100 full-time once operational. It also aligns with the Government of Saskatchewan’s Growth Plan outlining a goal to crush 75 percent of the canola produced in the province. The plan also aims to increase its value of exports by 50 percent and increase agricultural value-added revenue by $10 billion.

The exact cost for this project was not disclosed, however, Regina’s city council discussed a project worth $800 million when examining the company’s land purchase.

Cargill

Within days of Viterra’s announcement, Cargill  also announced its plans to invest $350 million to construct its own canola crushing facility in Regina.

The new project will have a similar design as Cargill’s existing facility in Camrose, Alberta (which will also be updated along with the Clavet, Saskatchewan facility over the next 12 months), and is expected to be operational by early 2024.

“We are confident in the continued growth and competitiveness of the canola processing industry and look forward to helping farmers access increasing market demand,” said Jeff Vassart, president, Cargill Canada. “Through these projects, we’re committed to providing a better, more efficient customer experience across our network, making it easier to do business with Cargill.”

The state-of-the-art crushing site is expected to provide a consistent and fast point of delivery for farmers and end users, and will have an annual production capacity of 1 million tons. During the construction phase the project will generate 1 million hours of employment, and when fully online, will add approximately 50 full-time jobs.

This project, along with the Camrose and Clavet upgrades, are in line with Cargill’s work to modernize and expand its capacity across its North American oilseed network – and follows upon the company’s announcement that it was investing $475 million to fund a series of other projects across its U.S. soy processing facilities.

“Saskatchewan is a leader in agriculture production and through investments such as this we are growing our capacity to process these products at home,” said Premier Scott Moe. “We welcome this significant investment and look forward to working with Cargill to add value to the canola our producers grow, create local jobs and support Saskatchewan’s economic growth.”

Ceres Global 

Not to be outdone, Ceres Global, an agriculture, energy, and industrial products merchandising and supply chain company, is the most recent player to throw its hat in the ring, announcing its plans to build a $350 million canola crushing plant in Northgate, Saskatchewan.

“This is an exciting time for Ceres Global as we position ourselves to take advantage of the unprecedented demand for oilseed crush in North America,” said Robert Day, president and CEO, Ceres. “While there are multiple drivers contributing to this demand, the most important is the movement towards green energy and the need for vegetable oil as feedstock for the production of renewable diesel.”

Richard Gray, a professor with the Department of Agricultural and Resource Economics at the University of Saskatchewan, told the CBC that there are international environmental and political pressures driving these projects as well, noting that companies in Europe are turning away from soybeans or palm oil for biodiesel due to deforestation connected with their production.

Agreeing with this view was Jum Titsworth, director of agricultural development with BNSF Railway, who said, “Demand for renewable diesel feedstocks is rapidly growing. The BNSF network is ideally suited to supply the production, processing and distribution of these feedstocks.”

Titsworth continued, “A crush plant at Northgate, Saskatchewan will provide an important source of canola oil to meet the growing demand. Northgate has a unique location, both in Canada’s canola growing region and with direct rail access to the major renewable diesel and food processing markets via BNSF’s network. This allows Ceres-produced canola oil to have an advantage in this rapidly growing marketplace. That same network also results in advantaged animal feed market access for canola meal. BNSF is excited to add this facility to its growing customer investments in the renewable diesel market.”

Expected to come online in 2024, this facility will have the capacity to process 1.1 million tons of canola, and to refine 500,000 tons of canola oil for both food and fuel, per year. The site also includes a 2.7 million bushels shuttle loading grain elevator and two 120-car loop tracks, giving it “construction-ready” infrastructure, shortening the lead-time for completion of the project.

“We have been analyzing canola crush at Northgate for several years as its location along the Canada-U.S. border is ideally located to originate canola seed from our farmer partners,” said Day, “and with a direct connection to BNSF Railway, it provides the most efficient access to the U.S. market and U.S. ports.”

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan@globalaginvesting.com.