Directwest May 2021 LB
Features

Field of Dreams: How Inland Ports will Shape the Future of Trade in Saskatchewan

AGT Food and Ingredients, Regina
AGT Food and Ingredients, Regina

Recent private investment into inland ports in Saskatchewan suggests they have a critical role to play in a prosperous future for the province. With nations worldwide questioning global supply chains, and concern about food security rising, inland ports coupled with value-added agriculture show a lot of promise. With luck, the province’s economy will be the beneficiary.

“For years, those of us using containers saw empty containers on rail going back to the ports.” says Murad Al-Katib, CEO of AGT Food and Ingredients and investor in Chuka Creek Business Park. “Asian goods would come into Prince Rupert, and through Vancouver, they would then go into the Midwest [where] they would be offloaded. And the empties would go right by our door again, and never stop here. So, we had all this grain and opportunity, and no containers.”

AGT Food and Ingredients, Regina

AGT Food and Ingredients, Regina

AGT’s investment in Chuka Creek, coupled with the Global Transportation Hub and Regina Bypass, has changed that.

“We were able to create what we will consider in the future to be a massive flow of empty equipment that was never destined for Saskatchewan to stop here.”

As grain production increases thanks to new technologies and advances in agronomy, and potential for further growth with the Saskatchewan Government’s proposed irrigation project, the promise for value-added agriculture exports improves significantly. Tack on clean fuel production from canola, and you have a generational project in the making.

“What we’re creating here is … capacity for the future,” explains Al-Katib. And that capacity is essential for what he calls Saskatchewan’s “trade imperative.”

Saskatchewan has “1.1 million people [with] a productive capacity to produce 35 billion in goods,” says Al-Katib. “We’re never going to eat all the lentils, durum wheat, and canola. And so we’ve got to get that out to markets.”

Saskatchewan being the world’s largest exporter of each of these commodities is one thing, but it’s about time we add value before they go to market, Al-Katib suggests. “They’re assets. Let’s monetize them,” he said.

Al-Katib is no stranger to taking a vision of the future and making it a reality. What started 18 years ago in his basement is today one of the “largest suppliers of value-added pulses, staple foods and food ingredients in the world,” and has revenues around $2 billion, 40 locations, and delivers to over 120 countries.

“We kind of prove that you can originate raw material here,” says Al-Katib. “You can transform it, … containerize it, [and] ship it to 100 countries around the world,” Inland ports support this kind of thinking.

Twelve minutes drive southeast of Saskatoon, parked at the confluence of a potash mine, one of the world’s most extensive canola processing facilities, two railways, and three major highways, another inland port development is underway. Set against the golden crew cuts of recently harvested crops, accented by the sky’s bright blue hues and wisps of white, is Saskatoon Transportation Link (STL).

With an aggregate of assets visible only to a few, five Saskatchewan developers purchased over 800 acres earmarked for industrial development next to three major highways and Canada’s two primary rail lines. Coupled with the robust infrastructure a mine brings with it, the development also boasts proximity to city amenities, low land prices, potable water, and a forward-looking municipality looking to grow alongside the industrial park.

The park’s “dual access” to CP and CN rail also represents “pure negotiating power for the people that don’t have leverage,” says STL Director, Laurie Bradley.

Without multiple locations or significant volume, smaller exporters struggle to negotiate competitive freight rates with a single rail line. STL helps level the playing field. The site also promises investment potential in value-added agriculture, plant-based proteins, and clean fuels, such as ethanol.

“Along with improved crop yields, this region has just touched the tip of the iceberg when it comes to food processing,” says Hilary Klassen, STL site administrator. “In the coming decades, Canada will see a massive shift from exporting raw materials to processing, refining and adding value in Canada prior to exportation.”

Creating space and capacity for exports and value-add production is vital to economic growth in the region. Klassen suggests provides a solution. “We anticipate as added rail storage becomes available with this project,” says Klassen. “The site will be a key infrastructure location to improve the efficiency of rail exports heading east or west to global markets.” The recent rebuilding of the rail line to Hudson’s Bay and the proposed rail link from Alberta to Alaska further confirm this development’s strategic advantage.

And the recent global wave of economic shutdowns highlighted the precarious nature of the world’s supply chain – especially around food security. So, while inland ports mean jobs and wealth for Saskatchewan, they also mean more robust food supplies – plant-protein, in particular – for the world.

“We’re going to see a recasting of supply chains in North America,” says Al-Katib. “[this] is a generational opportunity for this country.”