Protein Industries Canada aims to make the prairies a hotbed of agricultural innovation.
PIC was founded by a group of partners, including Ag-West Bio in Saskatoon, in response to a $950 million federal funding announcement for supercluster initiatives through Innovation, Science and Economic Development Canada (ISED). PIC’s goal is to move Canada to second place in global agricultural exports and fifth in agri-food exports, while developing a new range of plant-derived foods, ingredients and feedstuffs of superior quality to command market premiums.
Out of over 50 applications, nine supercluster proposals were shortlisted in October; up to six winners will be announced early this year. The federal investment into superclusters, innovation hubs home to strong industrial clusters, is the first of its kind in Canada. Superclusters are aimed at producing a high level of job creation, revenue growth and expanded exports. The pan-prairie PIC expects to generate $10 to $15 billion towards the GDP.
Wilf Keller, the president and CEO of Ag-West Bio, is optimistic about PIC’s chances of securing a federal investment, thanks to a report outlining agriculture’s untapped economic benefits. “In the past, agriculture was never a high-profile industry in the federal government,” says Keller. But then, the government recruited Dominic Barton, the global managing partner of McKinsey & Company, to become the chair of the Canadian Minister of Finance’s Advisory Council on Economic Growth.
Last February, after extensive analysis, he released what’s often referred to as The Barton Report. The report identified the growth potential and opportunity for export improvement in Canadian agriculture, due to expanding global populations, a rising protein demand in Asia and the need for trusted markets. “So, we thought, ‘if he said that, we may actually have a chance with the supercluster,’” explains Keller.
Keller, along with a dozen others, met with Barton in Toronto last April. “Our thoughts were strengthened with the fact that he said, ‘yes, adding value to Canadian crops makes a lot of sense.’”
Canada is a global player in oil seed and pulse crops; PIC will aim at increasing the protein content of these crops to move Canada up the ladder. Canada mainly sells the seeds from these crops and has a minimal share in the plant-based protein market, worth $13-billion world-wide. PIC will give the country a competitive edge in that market. “The world’s in an era now where people are conscious of protein…and I think there’s an emerging shortage of protein in terms of human food, livestock food, aquaculture, even pet food. There’s a demand for protein and Canada could be a supplier, but we’d like to supply it in a different way than just seeds going out on a boat,” says Keller.
PIC aims to grow three areas of business on the prairies: manufacturing of crop proteins, use of these proteins in value-added food products, pet and livestock food, and ramping up exports of bulk ingredients.
The economic argument for a pan-prairie supercluster is strong. The current export market of agri-food products is worth $50 billion. The Barton Report proposed that number could grow to $75 billion by tapping into agricultural production, of which PIC expects to contribute up to $15 billion.
The Prairies, home to 85 per cent of Canada’s arable land, will be the hub for the supercluster. PIC has partnerships at universities and companies in Guelph, Quebec and B.C., along with the support of organizations and individuals from across Canada. Saskatoon, Winnipeg and Edmonton all have cutting-edge agricultural research and innovation facilities. “We really have an innovation backbone of organizations that do food processing research. Where we spend a lot of energy on production research can feed into these areas,” says Keller.
The next step is lining up companies developing new food products and helping start-ups grow. Keller believes the time is right for PIC. He points to James Cameron and Suzy Amis Cameron’s investment in Verdient Foods Inc., a pea-processing facility outside Saskatoon, and the French company, Roquette, which is building a $400 million pea, oat and flax processing plant in Manitoba.
PIC has raised $300 million and has asked for an additional $300 million. Work has begun on a venture capital fund to help small companies running in parallel to that $600 million. If the federal supercluster proposal is not successful, Keller says private backing, along with established government funding, may be enough.
“It will require visionary management and very aggressive work to make this happen,” says Keller. The $700 million PIC package is expected become a global magnet for investments by large European companies.
“It could be transformational for Western Canada,” says Keller.