SASKATOON and REGINA, SK, Jan. 17, 2022 /CNW/ - Federated Co-operative Limited (FCL) is pleased to announce they have signed a memorandum of understanding to form a joint venture (JV) partnership with AGT Food and Ingredients Inc. (AGT Foods). The newly formed JV will look to construct a $360 million canola crush facility. The partnership with AGT is a 51%-49% split, with FCL holding the majority ownership stake. The canola crush facility will supply approximately 50% of the feedstock required for a 15,000-barrel-per-day renewable diesel plant, with the remainder of the supply contracted from other canola crush facilities.
"We are so pleased to have AGT as a partner. Murad and his team are already playing an instrumental role in Saskatchewan agriculture and will bring a great deal of expertise to this venture," said Scott Banda, CEO of FCL. "We are excited to realize the vision we share to bring value-added opportunities to the agriculture sector in both farm-to-tank and farm-to-fork opportunities that will benefit the communities we serve."
"I applaud the leadership Scott and the team at FCL have shown in working together to pursue this exciting opportunity," said Murad Al-Katib, President and CEO of AGT Foods. "Agriculture is at the forefront of many global challenges and is providing societal solutions to global protein requirements, food and renewable fuel supplies. This project demonstrates Saskatchewan's leadership in plant-based Foods, Fuels and Feeds and brings together two Saskatchewan companies with the shared goals of decarbonizing our economy and adding value to Western Canadian crop production. We believe that AGT's capabilities in grain logistics and plant protein ingredients combined with FCL's strong history in energy and farm inputs creates a powerful partnership that will benefit the communities in which we operate."
The canola crush plant is part of a $2 billion investment FCL is making in the construction of an Integrated Agriculture Complex (IAC). Today's announcement builds on the company's recent announcement that FCL is advancing plans to construct a renewable diesel facility in the Regina area. The IAC will include the recently announced renewable diesel plant and canola crushing plant that will produce the feedstock for the plant-based fuels produced at the renewable diesel facility.
"This historic announcement is about the future of our business. We know the synergies between transportation fuel production and agriculture will play a vital role in Western Canada's transition to the low carbon economy," said Banda. "We believe our Co-op Retailing System is well-positioned to integrate and capture the full agricultural value-chain in the production of fuel and value-added products. We are excited about the opportunities that the IAC will provide for Co-op, the City of Regina and all of Western Canada."
The projects that comprise the IAC will provide significant economic opportunities locally and across Western Canada. The construction phase of the IAC will create an estimated 2,750 jobs and, once complete, could potentially create up to 300 permanent jobs. In terms of economic impact, the gross economic output of the complex will be an estimated $4.5 billion. This estimate includes all economic realizations associated with the facility. The IAC investments are subject to continued due diligence as well as environmental, regulatory and board approvals.
"Our government is grateful FCL and AGT Foods are moving forward with this significant investment that will create thousands of jobs and expand value-added processing in Saskatchewan," said Premier Scott Moe. "The new Integrated Agriculture Complex will provide additional momentum to Saskatchewan's growing economy. With this project, more than $12 billion of capital investment has been announced for the province in the last year, including about $2 billion to build four new canola crush plants. FCL's new renewable diesel facility will reinforce Saskatchewan's reputation as one of the most sustainable producers of energy in the world. This project is a win for the economy, a win for workers, families and communities, and a win for the environment."
"This is a very exciting announcement, and I am pleased to see FCL and AGT Foods continuing to invest in our city and our province," Mayor of Regina, Sandra Masters said. "This investment will provide Regina and area with new value-added opportunities, assist the city's long-term sustainability goals, and reinforce Regina's position a global leader in agriculture."
The IAC ultimately creates opportunities for both local Co-ops and agricultural producers. Through the integration of agriculture with plant-based fuel production, FCL is providing farmers with another marketing opportunity for their crops and local Co-ops with another opportunity to build even stronger relationships with producers. From seed to tank, Co-op and AGT will be able to provide farmers with options for their products at all levels of the agricultural value chain.
About Federated Co-operatives Limited and the Co-operative Retailing System
Federated Co-operatives Limited (FCL), based in Saskatoon, is focused on providing more than 160 local Co-ops across Western Canada with strategy and leadership, wholesaling, manufacturing, logistics, operational support, business-enabling services and marketing support. Together FCL and those local co-operatives form the Co-operative Retailing System (CRS). The CRS serves our members and communities with products and services that help build, feed and fuel individuals and communities from Vancouver Island to northwestern Ontario. Our total workforce of 24,000 employees serve 1.9 million active individual members and many more non-member customers at 1,500 retail locations in more than 620 communities. We are a different kind of business – we are locally invested, community-minded and offer lifetime membership benefits including patronage refunds, quality products, quality service and fair prices. More information is available at www.fcl.crs and www.co-op.crs.
About AGT Food and Ingredients Inc.
AGT Food and Ingredients Inc. (AGT Foods), majority owned by Fairfax Financial Holdings Limited, is a Saskatchewan-based global leader in plant based proteins and value-added processing of pulses, grains, staple foods and ingredients for export and domestic markets. AGT Foods was founded on the principle 'From Producer to the World', buying pulses, grains, oilseeds and specialty crops from farmers around its facilities in Canada, Turkey, the U.S., Australia, China and South Africa and processing and exporting its pulses, milled durum wheat and canola products, pulse ingredient flours, starches, fibres, proteins and extruded products and retail packaged foods to customers in over 120 countries around the world. AGT Foods operates a strong network of grain origination, processing facilities and a short line rail system in the heart of Saskatchewan's canola, pulses and wheat growing areas. More information is available at www.agtfoods.com.
SOURCE Federated Co-operatives Limited
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
