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Scoular buying into Prairie grain handling

Will own grain terminal in new SE Sask. commodity hub

Omaha's Scoular Co. plans to bankroll and operate a new grain handling facility in Saskatchewan's southeast corner for quick access to U.S. and Mexican processors.

Scoular was announced Tuesday as the funding partner, owner and operator for the grain handling portion of a new, $90 million commodity logistics hub to be built on the North Dakota border at Northgate, Sask., about 60 km southeast of Estevan.

The hub, a project of Toronto-based Ceres Global Ag Corp., is to be built on 1,500 acres connecting to BNSF Railway's U.S. network at Northgate with two rail loops, each with 120-car spots.

One of the two rail loops at Northgate will serve the Scoular grain handling and shipping facility. The second will be devoted to transloading and shipping oil from the province's southeastern oil patch.

Ceres' plan also includes a logistics centre to unload "imported equipment and materials for Saskatchewan's booming resource economy."

The Scoular facility is expected to have capacity to handle up to 40 million bushels of grain per year, while the oil transloading site will have capacity for 70,000 barrels per day, once both facilities are fully built out over a three-year period, Ceres said. The finished facility is expected to employ over 30 people.

Construction is expected to begin this spring, pending permits and approvals, with "initial grain and oil shipments" expected later in the year, Ceres said.

The new hub "will help ease the bottleneck of getting commodities -- especially grain and oil -- out of Saskatchewan and will provide a new and competitive option for shippers and exporters," Ceres Global president Michael Detlefsen said in a release Tuesday.

Ceres, he said, "is delighted to have Scoular as a partner on this project, and to be introducing a new, major buyer of grain to the Canadian market."

Last summer's deregulation of Canada's single marketing desk for Prairie wheat and barley wasn't specifically mentioned in the release as a motivation for the new grain facility.

However, Scoular's chief operating officer Bob Ludington said in Tuesday's release that "the Saskatchewan farmer is poised for much greater participation in an expanding and highly competitive global market."

The grain facility, he said, "gives high-quality Canadian wheat direct line access to U.S. and Mexican flour millers, and will open extensive new markets for Canadian canola."

The Northgate hub, he added, "will serve to shrink the distance between Canadian supply and global demand, expanding the marketing options for area producers tremendously."

"Procurement"

Privately-held Scoular, which runs 60 grain handling facilities across North America, has been active in Prairie grain merchandising through its Calgary office since 1996.

Scoular also sources crops in Ontario through a third-party terminal at Vanastra, about 70 km north of London.

Publicly-traded Ceres Global owns 14 grain storage facilities in Minnesota, North Dakota, Wyoming, and New York, plus a 25 per cent stake in the Stewart Southern Railway, a 130-km shortline running mainly oil northwest from Stoughton, Sask. to just outside Regina.

Ceres is also active in Canadian grain handling through its 2.3 million-bushel capacity terminal at Port Colborne, Ont. -- better known as the former Robin Hood Flour mill, which its Riverland Ag grain subsidiary bought from Cargill's Horizon Milling in 2009.

Riverland Ag, Ceres said, will be "a major customer of the (Northgate) grain facility, and will work closely with Scoular on the procurement of certain grains."

Related story:
Large oat supplies in storage may limit prices,
Oct. 1, 2010


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