Development work toward a major new nitrogen fertilizer plant in Quebec is on hold while its partners seek more investors to climb on board.
IFFCO — the Indian Farmers Fertilizer Co-operative, one of India’s largest fertilizer makers — and Quebec agrifood co-operative giant La Coop federee said Tuesday they’ve suspended preparation of “preliminary plans and specifications to establish project costs” and will also put off signing an EPC (engineering, procurement, construction) contract for their proposed urea production plant.
IFFCO and La Coop said in 2012 they planned to start construction work at Becancour, Que., across the St. Lawrence River from Trois-Rivieres, in two years’ time, and to start urea production in 2017.
However, the partners also said in 2012 that target would depend on their raising the remaining 45 per cent of what was then the $1.2 billion capital cost of the plant — and on the outcome of a feasibility study.
“As construction costs are now estimated to be in excess of $2 billion, this suspension will allow the shareholders to review the global strategy of financing, construction and execution,” IFFCO and La Coop said Tuesday in a release.
The partners on Tuesday described the suspension as an “essential strategic pause for a major industrial project,” emphasizing the move was “not an abandon.”
Calling their proposal “one of the largest industrial projects in Quebec in the last 25 years,” the partners said their focus in coming months will be put “on the search for new partners.”
“The project now requires a new approach to ensure its realisation and viability,” the companies said.
“I have seen for myself that there is interest in the project in the region,” Manish Gupta, CEO of IFFCO’s Canadian arm, said in the companies’ release. “We have gone through numerous steps at a fast pace to date, and now we need to refocus the project to ensure its viability in the medium and long term.”
A pause, the companies said, “will ease the pressure imposed on both agricultural co-operatives by a tight schedule and the various fluctuations in current commodities markets. Both will also be in a better position to make business choices by means of more thorough analyses and projections.”
The “current state” of the fertilizer market and of other similar projects in North America will allow the two co-ops to take the pause “without interfering with the project’s positioning,” they said.
In a separate release Wednesday, Quebec’s provincial opposition Parti Quebecois described the Becancour project as “on ice,” noting the Becancour area is waiting for the project’s 1,500 construction jobs and the plant’s longer-term 250 jobs.
Pierre Karl Peladeau, the PQ’s economy critic, urged the provincial Liberal government to “immediately” work with IFFCO and La Coop to move the project forward. — AGCanada.com Network