“Good news all around.”
That’s how Chris Vervaet, executive director of the Canadian Oilseed Processors Association (COPA), responded when asked about Ceres Global Ag Corp.’s plans to build a 1.1-million-tonne canola-crushing plant at Northgate, Sask.
Earlier this year two other companies announced they will build new plants, and a third announced it was doubling capacity of an existing facility.
“The significant expansion of crush capacity… it’s just good news,” Vervaet said in an interview May 27. “It continues to underscore… the confidence that companies have in the ability to crush canola in Canada and to our investment in Canada.”
Canada’s canola-crushing capacity of 11 million tonnes will jump by 5.7 million tonnes, or almost 52 per cent, to 16.7 million if all the announced expansion occurs.
Vervaet said he’s confident Canada produces enough raw canola seed to meet the growing demand from domestic processors.
Now Canada’s crushers can process about half of the country’s annual canola production. After the new plants start operating they could crush 75 per cent of it. Canola production is expected to increase as well.
If more canola seed is processed domestically that could free up some grain export capacity at Vancouver, say some industry observers.
“We need to keep in mind that meal will have to find a home,” Vervaet said. “That might be moved through greater volumes off the West Coast.”
Much of the expanded crush capacity aims to meet growing biodiesel needs here, but that’s not all the value it will create.
“This isn’t just a fuel North America plays when it comes to the increased capacity of canola crushing,” he said. “There’s still a very important food aspect and canola oil does move off the West Coast. There’s still room to move product, even though it’s in a value-added format, it could still very much move to international markets in greater volumes.”
April 26 Viterra announced it’s going to build the world’s biggest canola-crushing plant with 2.5 million tonnes of capacity at Regina, Sask.
Four days earlier Cargill announced plans to build a one-million-tonne canola crusher, also at Regina.
A month before that Richardson International said it will double the capacity of its crushing plant at Yorkton, Sask. to 2.2 million tonnes annually.