Big investments in crop processing are laying the groundwork for a world-class food manufacturing sector on the Prairies.
By Joanne Paulson.
Just west of the small Manitoba city of Portage la Prairie, the darkness of a winter night comes alight with the glow of a changing future. The site of a new, $400-million pea processing plant is being prepared for spring construction, and locals can’t help but be awestruck by the bustle of activity.
“Particularly after sundown, it gets really exciting here, because all the site lights come on and you say, ‘hey, there’s lots happening in that field,’” quips Vern May, executive director of Portage Regional Economic Development — the entity responsible for attracting new business to the area. “As soon as the spring thaw happens, things will be going at a pretty aggressive pace.”
The facility belongs to the French company Roquette and, until the $460 million announcement by Simplot on February 15 to double the size of its Portage la Prairie potato plant, represented the largest single private sector investment in the province’s history. It’s a move that has shifted many eyes directly onto the community, with a sense of interest and wonder as to how a region of only 20,000 people could secure such as a massive deal. Well, deals.
“When you talk to people in the foreign direct investment industry, they say this is what foreign investors are looking for: To be in the cluster, to be near an international airport, all of these things that — when we look at Portage la Prairie — we’re not,” admits May. “We’re not Toronto, Montreal, or Vancouver.”
That, however, didn’t stop the city from beating out a half-dozen other potential Canadian jurisdictions, as well as North Dakota, to land the Roquette expansion.
“Manitoba offers an environment that perfectly fits with Roquette’s strategic ambitions,” says Martin Fregeau, managing director with Roquette Canada Ltd. “It has a well-educated and professional workforce. It has strong logistics, with Winnipeg being the major Canadian hub, providing ready access to multi-modal transportation links throughout North America and beyond. And it has reliable, competitive, and sustainable hydroelectric energy.
“When you combine that with the business-friendly spirit and support we’ve received from the province and the local administration, it was clear that Portage la Prairie is a perfect location to develop a food business.”
While Roquette does operate two locations in the United States already (Illinois and Iowa), this venture is its first into the Canadian marketplace — and the first outside of France to process peas. It only makes sense. After all, Canada does account for roughly 30 per cent of the global pea production each year.
But, as with most investment attraction efforts, location alone is seldom enough. It takes a multi-faceted team of stakeholders from both the public and private sectors to pull all the necessary pieces together. In the case of Roquette, World Trade Centre Winnipeg and Manitoba Agriculture were two of the early champions to get the ball rolling.
Those relationships aren’t stagnant, either. They must also grow and evolve over time to develop the right supply chain components and labour pool to sustain a project of this magnitude. At a vendor information forum held this past November, 200 companies filled the room to hear about potential supplier opportunities.
“There has been active engagement from groups like the Manitoba Pulse Growers Association,” notes May. “They’ve actually started some test crops this year. I think there will be an increase in pea acres locally and I expect they’ll be looking at importing from Saskatchewan, too. It just illustrates how an investment like this — although every municipality is trying to get it — how wide-reaching the economic impact is.”
Once completed, the plant will extract protein from peas for use in a range of food products, such as pasta, bread, sports bars, and soups. The construction phase alone is expected to create 350 jobs, and approximately 150 jobs are on the docket for when operations are officially commissioned.
Connecting the corridor
Roquette’s decision to invest in Manitoba is representative of a broader push to advance pulse processing and exports on the Canadian Prairies.
Several initiatives are burbling or underway to create a higher level of value-added opportunity for agricultural commodities, including the concept of the Protein Highway. This idea — an informal alliance of western provinces and northern American states, most of which have the capacity to grow dryland crops rich in proteins — was launched in September 2016 to help identify how to position the crop processing cluster as an economic engine.
Wilf Keller, CEO of Ag-West Bio Inc., a Saskatoon-based catalyst organization mandated to advance agri-products development, has helped lead the conversation from day one. In fact, he was a driving force behind the submission of a massive proposal to the Government of Canada’s supercluster initiative, which was one of five selected for funding in February. The result was $150 million in seed capital and the establishment of Protein Industries Canada — an umbrella organization bringing together 120 post-secondary institutions, research facilities, manufacturers, and other public assets to create an ‘ecosystem’ for collaboration. The proteins supercluster is expected to create 4,500 jobs across the Prairies and add $4.5 billion to the gross domestic product over the next decade.
“This framework has more structure, a defined set of goals and so forth, where the Protein Highway is more of a think-tank discussion initiative that will hopefully result in resources,” explains Keller. “If the Americans come up with a similar thing to a supercluster, we can really make it run.”
Even Hollywood is beginning to get excited about the possibilities.
This past fall, movie producer James Cameron (of Titanic and Avatar fame) came to Saskatchewan to unveil their latest undertaking, Verdient — a new organic pea processing facility located in Vanscoy, just west of Saskatoon.
Cameron, a vegan who has recently become heavily involved in processing healthy food, along with his wife, Suzy, also signed a $500,000 agreement with the Saskatchewan Food Development Centre to further the creation of foods and ingredients from Prairie plant sources. Soon thereafter, in January, that centre opened the doors to its 43,000-square-foot expansion, dubbed the Agri-Food Innovation Centre.
Keller says it’s all part of a big vision to realize the potential of Canada’s food manufacturing industry. He points to a report by McKinsey & Company’s Dominic Barton, who was brought into Ottawa two years ago to advise on economic development.
“He put down a challenge and said that Canadian exports of agri-food are in the range of $50 billion, and that our target should be $75 billion,” says Keller. “That’s a 50 per cent increase; and it’s not likely we can get there just by selling a commodity. We need to add value.”
Keller believes Protein Industries Canada could move the needle by $10 billion or more. Approximately 85 per cent of that would come from growth in pulses and canola exports, and the rest would centre around flax, oats, quinoa, and other crops.
“It’s an important signal to indicate we on the Prairies are a good source of protein crops that are fairly produced, comparatively speaking, and in a sustainable manner,” he adds. “We have lower disease loads and are in a good position to produce them as raw material or feedstock to add value.”
Achieving that mark would also mean a spike in jobs and revenues for companies like Roquette and Verdient.
Roquette’s Fregeau agrees that the Manitoba plant is a positive step in that direction, and will help his company expand deeper in global food, nutrition, health, and other specialty markets.
If one thing is certain, it is that demand isn’t disappearing anytime soon. Between now and 2050, the world will need to produce more food than in the previous 10,000 years combined, and with more specialization to accommodate for increased regional preference.
“If you’re in India, Pakistan, and Turkey, it’s lentils. If you’re in New York: Enriched pastas, breads, and alternate meat products. In Europe, they may want a vegan burger. They all derive from pulses,” Keller exclaims. “You have the human need, and then pet foods, too. This is big business.”
And it’s starting to land here.
Back in Portage la Prairie, Vern May thinks the time is now right to step up our collective game.
“Manitoba and Saskatchewan are chronically underrated in terms of being able to attract industry like this,” he says. “People forget about us in the middle. We’re historically too humble. We’ve adopted a little bit of that Alberta attitude, and we’re becoming more aggressive with our own marketing. That’s what we need to do.
“The potential is huge. Other countries need what we can produce, and that is why we’re seeing a lot of international interest on the Prairies. That’s exciting not just for us, but for Canada overall in terms of foreign investment.”
Portage la Prairie: Island on the Prairies
By Vern May
Optimally situated at the midway point of the Trans-Canada highway, Portage la Prairie has a long history in the food processing industry. But it wasn’t until the 2017 announcement that Roquette had selected the region as the site for the world’s largest pea protein processing facility that the manufacturing sector has truly taken interest in Portage’s investment advantage.
Once home to Campbell’s Soup, which operated here until 1990, Portage has been home to potato processing for the local McCain plant since 1979. Simplot established their potato operation here in 2001. Other food production includes smaller-scale operations by Nutri Pea, Prairie Quinoa, Best Cooking Pulses, The Better Hemp Company, and Canadian Prairie Garden Purees.
The location’s strategic advantage includes its proximity to an R-TAC-rated highway, its connectivity to both national railways, plentiful access to water, and its rural setting within a comfortable commute from the provincial capital and an international airport. Combined with Manitoba’s attractive utility rates and a large footprint of available land already zoned for industry, it won’t surprise many to learn that investment interest is high in the area.
In 2017, Portage la Prairie closed the year with a sum of $493 million in new investment. Roquette factored largely to that total; however, interest in residential and commercial development has also seen an encouraging climb. Many projects are expected to break ground in 2018. Of that investment, it is interesting to note that close to $23 million reflects re-investment by existing merchants in expansion and diversification of their holdings. This encompasses an estimated $8 million proposed from Portage Consumers Co-op to create a retail neighborhood adjacent to their existing food store and gas bar operations.
A unique element of Portage’s economy that is often overlooked is the city and municipal relationship with the local First Nations. Long Plain First Nation, whose reserve lands sit 20 kilometres southwest of the city, has secured designated land that borders on the city limits to develop the Keeshkeemaquah urban reserve. Through the settlement of recent treaty land entitlements, the land’s Arrowhead Development Corporation has been heavily invested in development. This includes housing and commercial projects in excess of $13 million with an eye on expanding into the hospitality industry in the near future.
As Roquette has inspired the world to learn more about Manitoba’s ‘Island on the Prairies,’ the future is looking bright for Portage la Prairie.
Vern May is the executive director of Portage Regional Economic Development.