Article
Cargill Crushing Plant Will Keep Canola Processing Local
May 10, 2022 3 Minute Read
Saskatchewan is crushing it right now.
As the war in Ukraine jeopardizes global food supplies and stokes food security concerns, CBRE’s Michael Bratvold and team just finalized a deal securing 247 acres of land just outside Regina for Minnesota-based food giant Cargill Inc., where it plans to construct a $350 Million dollar canola processing facility—or crusher.
This will be the fifth such processing facility to be built in Saskatchewan in recent years in response to surging demand for canola oil and meal. It is the result of a significant push by the province to keep the production of grains and pulses local, versus sending them elsewhere for processing. This $2 billion capital investment will increase in the province’s production capacity by 62%.
Bratvold, CBRE’s Managing Director for Saskatchewan, believes the $39 million Cargill deal will end up being the biggest industrial land sale in the province this year. “It’s a big vote of confidence for our province’s agri-food sector.”
Canola Country
Canola, or “yellow gold” as it's known in Saskatchewan, represents the number one source of crop revenue for farmers in Saskatchewan and about one quarter of all crop revenue in Canada.
“The percentage of canola being produced and exported from our province is astounding,” he says. “We’re clearly the world leader in this.” Canadian canola, on top of being used for food production, is also used in biofuel production, because it’s a low-carbon, sustainable and renewable resource – and it’s in abundant supply.
“But just like good Westerners we seem to export our resources without doing any part of the processing,” Bratvold adds. “So the Cargill facility is part of a wider effort to change things so that we’re not just a resource-based economy, but we also can process and gain some of that value right here in the province without shipping it out to be refined elsewhere.”
Saskatchewan Premier Scott Moe, in unveiling plans for the Cargill crushing plant last year, noted that the facility will help his province in “growing our capacity to process (canola) products at home.”
Prairies Hub
The site, purchased by Cargill from the Province of Saskatchewan, is located at Regina's Global Transportation Hub (GTH), an 1,870-acre self-governing and fully serviced industrial park with direct access to the Canadian Pacific mainline and the Trans-Canada Highway.
Cargill plans to begin construction later this year on the canola crusher facility, which will be modelled on Cargill’s existing facility in Camrose, AB. The plan is for the plant to be operational by 2024. The Regina crusher is expected to have an annual production capacity of one million metric tonnes and will offer a consistent point of delivery for farmers and end users.
The province went out of its way to incentivize Cargill to locate at the GTH, according to Bratvold. “There was a real push when we entered the market; it was quite clear the province wanted us to end up there.” And the feeling was mutual. “We did our due diligence and looked at a number of other options,” Bratvold says, “but it was clear that the GTH was the logical place for us.”
Food Security
In the same way that the pandemic highlighted the need for domestic production of vaccines and PPE, the war in Ukraine, a major producer of cereals, has brought the issue of domestic agricultural security into sharp relief.
“It has had a real impact on pricing here and demand for a lot of our agricultural product,” says Bratvold. “We’ve always been a big producer of cereals and pulse, but there has definitely been a push in recent years toward not just growing it and shipping it but growing it and then processing it and benefitting from that value-add.
“As uncertainty increases on a number of fronts, keeping things local has never been more essential.”
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