New grain terminal will be a basis booster predicts GFO chair

Tuesday, October 13, 2015

by JIM ALGIE

A two-year $50 million-plus grain-handling project in Hamilton by the company that took over former Canadian Wheat Board operations should speed exports of Ontario grain and oilseeds while strengthening regional markets, Grain Farmers of Ontario Chair Mark Brock said in an interview, Wednesday.

Construction began recently on a new, 50,000 tonne-capacity Lake Ontario terminal for grains and oilseeds at Pier 26 in Hamilton, Winnipeg-based G3 Canada Limited announced, Tuesday. The project is to be completed by harvest in 2017.

When they begin receiving crops, the new facilities should strengthen the basis for Ontario grains, GFO’s Brock said.

photo: Mark Brock

“I think the big thing for us, if you look at it strictly from the producer level, any new opportunities like this one help to move our product at a hopefully quicker pace which helps to keep our basis level strengthened,” Brock said. “This is great news for the Ontario grain industry because it just increases competition within the province, and that translates usually into higher prices for producers.”

For the port of Hamilton, G3’s announcement represents yet another expansion of agricultural business in shipping facilities once dominated by steel. A background report posted on the Port of Hamilton website claims major agricultural investments over the past five years make it “an essential link in the region’s agricultural economy.” A port directory lists five agriculture-related firms, including three major commodity traders: Parrish & Heimbecker, Limited, Richardson International Limited and Bunge North America.

Bunge and the Saudi-based SALIC Canada Ltd. acquired assets of the former Canadian Wheat Board to create G3 (Global Grain Group) in a controversial deal that closed finally, July 31. At the time the deal closed, G3 Chief Executive Officer Karl Gerrand described the company’s intention to build a “coast to coast grain-handling enterprise.” In a statement announcing the Hamilton project, Gerrand said it responds to recent export growth in Ontario’s grain industry.

“We look forward to expanding our relationship with farmers in the province,” Gerrand said. He said the company seeks to become the grain marketing “partner of choice” for Ontario growers.

Gerrand claimed the company has designed a new terminal that will meet the truck handling speed of “any competing terminal in Ontario.” Located just off the Queen Elizabeth Way, the new terminal will load lake vessels for transport to existing G3 export facilities in the St. Lawrence River.

A G3 spokesman declined to provide exact capital costs for the Hamilton project although he did say “the amount is north of $50 million.” Asked in emailed questions if the Hamilton project represents eastward expansion of former wheat board activity, G3 communications manager Richard Martin declined to make the wheat board link.

“G3 Canada is a new business,” Martin said. “This project is an important part of establishing our coast to coast Canadian presence,” he added.

Port of Hamilton agricultural business has grown dramatically in recent years both in total volume and as a proportion of total cargo. A January, Hamilton Spectator report showed 2.01 million tonnes of agricultural commodities moved through the port in 2014, about 19 per cent of the port’s total volume of 10.5 million tonnes that year.

Parrish & Heimbecker completed new grain handling facilities in Hamilton recently and acquired additional facilities as recently as 2012. Richardson completed a 15,000 million tonne expansion of existing grain storage in 2008.

The growth of agricultural trade through Hamilton also represents a plus for Ontario grain and oilseeds growers, GFO’s Brock said.

“In lieu of struggling steel commodities they’ve seized the opportunity for agricultural commodities,” Brock said of recent developments in Hamilton. “They’re not only exporting the raw product, but also importing some of the fertilizer inputs we needs,” he said.

“You create new opportunities and it just takes the pressure off everybody else,” Brock said. BF