New mill, more wheat

Wednesday, December 9, 2015

by SUSAN MANN

Ontario’s largest flour miller will be buying more wheat from the province’s farmers once its new 10,000 square-foot mill is constructed next year on a pier in Hamilton Harbour.

P & H Milling Group, a division of Parrish and Heimbecker Limited, is building the wheat mill on Pier 10 in the harbour and it will be accessible by rail, trucks and vessels. Derek Jamieson, president and chief operating officer of P & H Milling Group, says the new mill will have seven storeys.

The site of the new mill’s construction already has a P & H grain terminal, he notes.

Construction will start in early 2016 with the building slated to be completed and in production by November 2016. It will have state-of-the-art equipment and additional grain and flour storage. It’s the first mill being built in Ontario in 75 years.

The mill is estimated to cost $45 million to build, he says. The company’s portion of the construction costs is $40 million, while the province is giving P & H Milling Group a $5 million grant for its construction through a section of the Jobs and Prosperity Fund called the Food and Beverage Growth Fund.

The company is building the mill “because we need more capacity,” Jamieson says. “Our existing three mills are pretty busy as it is.” The current mills in Ontario are in Acton, Hanover and Cambridge. The company also has mills in other provinces.

The provincial government’s investment will enable the company to create 16 new jobs and retain more than 200 jobs in the province, according to an Ontario agriculture ministry press release.

Once the mill is built, the company will be able to process 25 per cent more grain and increase its intake of Ontario wheat by more than 10 per cent annually, the release says.

Jamieson says he can’t reveal how much wheat the company currently buys from farmers because “that’s commercially sensitive.”

UPDATE Dec. 10 2015: Mark Brock, Grain Farmers of Ontario chair, says any time a buyer increases the amount purchased or "we have someone increase usage of our wheat it goes right down to the price and we get a better price as producers. It's always great if we can create new market opportunities and have increased usage. That's a great positive for us as producers." END OF UPDATE

Norm Beal, CEO of Food and Beverage Ontario, an industry association, says Parrish and Heimbecker Limited has operations across Canada, including several in Ontario, and “the fact that they continue to invest in Ontario is important.”

The Jobs and Prosperity Fund is providing $2.7 billion over 10 years to enhance productivity, bolster innovation and grow Ontario’s exports, the ministry’s release says. The Food and Beverage Growth Fund section supports food, beverage and bio-product manufacturing projects that help create jobs, increase domestic and export market access and enhance innovation and productivity.

Beal says the provincial investment in the new P& H Milling Group’s mill is exactly why the Jobs and Prosperity Fund was set up. The fund attracts new investment and retains existing investment in the province, he notes.

“This goes to show these private company and government partnerships can work in a very effective way,” Beal adds. “When you look across the broad spectrum of places to invest, Ontario is a good and important place for the food and beverage processing sector to invest in. We’ve got clean water, we’ve got a great health care system, and there are many advantages to investing here.”

Last week, Ontario Auditor General Bonnie Lysyk leveled some criticisms in her 2015 annual report of government economic development programs. She said there is no government measurement of whether the $1.45 billion given to businesses from 2004 to May 31, 2015 as either loans or grants actually strengthens the economy or made recipients more competitive. She added that there is no government plan in place to measure the outcome of future economic development and employment programs like the Jobs and Prosperity Fund.

But Beal says he doesn’t buy those criticisms. The reporting requirements and the criteria to qualify for funding through the Jobs and Prosperity Fund are very strict and detailed, he notes.  Based on his experience, he says “when you apply for these economic development program funds, the process is extremely rigorous.”

Ontario has the largest food processing sector in Canada with 3,300 businesses employing more than 95,000 people in the province. BF