Oat mill, 70 jobs, almost went south

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This article was published 03/10/2019 (2526 days ago), so information in it may no longer be current.

A $94-million oat processing plant, which will create 70 jobs inside the Perimeter Highway, nearly ended up in the United States, said the head of the locally owned food giant Paterson GlobalFoods.

After a news conference to announce the project, president and CEO Andrew Paterson said that if the province hadn’t agreed to tax increment financing (TIF), the plant would have gone south of the border instead of in the RM of Rosser.

“We approached the government and I told them I felt a duty as a citizen of the province of Manitoba to give Manitoba the opportunity to have this particular plant,” said Paterson. He applauded Premier Brian Pallister and Agriculture Minister Ralph Eichler, who were at the news conference, for taking him up on it.

“Without support of the TIF program it would be built in North Dakota,” said Paterson.

TIF legislation allows the province to use the incremental education-related property taxes created by the new development to invest back into the project for a limited amount of time.

Pallister thanked Paterson for investing in Manitoba and creating jobs that keep young people from having to leave the province.

The construction of O Foods Ltd. will begin in the next few months and take 16 months. The oat mill will be in Centreport and Paterson’s fertilizer plant and inland grain terminal. It’s a good location with good logistics, said the head of the company.

“We have serviced farmers in this region since 1908,” said Paterson. “They’re the reason for our business. They’re our customers and they’re great people. We have three railways that come in here.”

The mill will process 250,000 tonnes of raw oats from Western Canada and is situated on Manitoba’s largest private rail siding with room for 260 rail cars serviced by CP Rail, CN and Burlington Northern Santa Fe rail companies.

“There are many trains that go out of here with oats in it. The reason why we’re here is because it makes it more economical for buyers to take the hull off of oats because, basically, it’s fluff and they can get full weights in rail cars. We think the processing part of the business is where it needs to be. Margins in the grainhandling business have gotten very narrow as they have on the farm,” Paterson said.

He said it’s getting tougher for Canadian farmers and companies such as his to turn a profit.

“We’re a Canadian company. We compete against foreign companies and we actually now compete against the government of Saudi Arabia.”

The Saudis acquired a major stake in the former Canadian Wheat Board to form Global Grain Group, known as “G3” in 2015.

“It’s difficult for a private company to compete against the likes of a foreign government and that’s what we do,” said Paterson, who produced copies of a memo from the Kingdom of Saudi Arabia to Crown Prince Mohammad bin Salman and all Saudi government ministries and agencies.

According to the Government of Canada translation bureau, the letter dated Aug. 6, 2018, is in response to Canada calling for the release of jailed civil society activists. The “Supreme Orders” advise all Saudi agencies and branches to “make sure you do not commit to any new commercial transactions with Canadian companies” and to try and put an end to existing ones.

Canadian farmers are part owners of the company, said Paterson, who noted a Conservative government paved the way for G3 with the dissolution of the Canadian Wheat Board. He wants to know how Canadian farmers feel about G3’s directive not to do business with Canadian companies.

“The farmers need a reckoning for their investment,” said Paterson. “There’s no public accounting for their investment.”

carol.sanders@freepress.mb.ca