Regina — Farmers of North America (FNA) will be breaking ground at Belle Plaine, Sask., for its farmer-owned nitrogen plant.
“For strategic reasons it’s a very good site,” FNA spokesperson Bob Friesen said in an interview here Wednesday at Canada’s Farm Progress Show.
The Belle Plaine site, about 40 km west of Regina, has access to both national railways, road infrastructure in place, and ample water and natural gas, he added.
In its release, the farm supply buying organization estimated it’ll need 1,900 workers to build its plant and 170 to operate it.
Friesen said FNA hopes to have the $1.7 billion plant, dubbed Project N, running by 2017. The latest announcement is “another stake in the ground to move us forward,” he said.
Saskatoon-based FNA has been on the road promoting farmer investment in Project N since 2012, but hadn’t yet said where in Western Canada it plans to build it, until now. [Related story]
So far 2,500 farmers have invested $9 million in the project, said Terry Drabiuk, FNA’s vice-president of operations. The company wants 80 per cent of the needed investment committed before the shovel hits the dirt.
FNA has a potential agreement with an offtake partner to pick up the balance of the needed investment, Friesen added.
The project will give farmers a chance to “own a piece of the action” from the manufacturing to the farm gate, he said.
The cash cost of producing urea is $135 a tonne, he said, and with urea prices pushing $800 per tonne this spring, “there’s quite a manufacturing market there to capture.”
Drabiuk said FNA doesn’t want to destroy the fertilizer market, but instead wants to offer as many dividends as possible to investors.
“Farmers in this area pay the highest price for their fertilizer, yet this is the lowest-cost area of production,” he said. Natural gas pricing in Western Canada also gives the company a cost advantage, he added.
Belle Plaine is already home to one of the world’s biggest N fertilizer plants, the former Saskferco facility which since 2008 has been owned by Norwegian fertilizer firm Yara International.
Ohio-based liquid fertilizer maker Nachurs also operates a plant at Belle Plaine through its Nachurs Alpine Solutions arm. The town is also home to Terra Grain Fuels, which there operates what’s billed as the biggest wheat-based ethanol plant in North America.
“The types of industries that are already located in the Regina-Moose Jaw corridor make it a logical place to locate,” Friesen said in FNA’s release.