By Pat Rediger
There’s an adage that you shouldn’t underestimate the impact that a small group of people can have, and you’ll find the truth of that statement in northwestern Saskatchewan. A group of farmers in the area came together to eventually form one of the largest inland grain terminals in the province, including an ownership stake in a grain port terminal and an ethanol plant.
North West Terminal (NWT) is a farmer-owned grain terminal located about a kilometre east of Unity between the main CP and CN rail lines. About 600 area farmers incorporated the business in order to bring competition to the region through better prices and improved service. They began with a 32,000-tonne plant processing about 200,000 tonnes, and today the company has approximately 1,000 shareholders, a 63,000-tonne plant, processes about 500,000 tonnes, and has annual sales of approximately $150 million a year.
“This success can be attributed to the expansions that we have done over the years that have increased our processing capacity, our storage capacity, our rail siding and our marketing,” said company CEO Jason Skinner.
“We’ve also purchased one of the port terminals in Vancouver through our investment in Alliance Grain Terminal Ltd. It’s these types of expansions that have allowed us to grow the business and continue to meet the needs of our customers in this region.”
True to the company’s motto, Building Our Future, NWT’s growth has resulted from a dedicated strategy to increase capacity. The first major enhancement took place in 1997 with the installation of a high capacity grain dryer. Over the years, other additions were made, including expanding the rail-car loading facilities from 52 to 150 car spots; adding 1.1 million bushels of storage; adding new high-speed cleaner machines; installing a density separator for removing ergot, midge and fusarium in wheat; and adding two colour sorters.
Most of the company’s main markets have remained the same over the years, but its customer base has diversified. Most of its products are shipped through its Vancouver terminal to places in Latin America and Asia.
“Our customers will change based on the quality of grains from year to year,” explained Skinner. “So one year you might find most of our grain ending up in markets in Asia like Japan, and another year you will find it in a different country.”
NWT representatives travel to various countries each year to strengthen business relationships and ensure that they are meeting their needs. The company also participates in international trade missions organized by the Saskatchewan Trade and Export Partnership (STEP) to investigate new market opportunities. Recently, the company returned from a trade mission to Japan and South Korea that was designed to create new opportunities due to the recent free trade agreement between Canada and 10 Asian Pacific countries called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
“Hopefully this will open up some new opportunities. We’ve had success in the past by participating in trade missions and we’ve developed new customers, so we find them very good for business,” said Skinner.
One of the most significant highlights for the company since its inception has been the creation of the wholly-owned subsidiary North West Bio-Energy Ltd (NWB) in 2007. NWB is located adjacent to the inland terminal and produces ethanol for fuel, industrial and potable markets as well as a high protein feed supplement.
Skinner said that the expansion was a natural outcome for the company. “We want to continue to expand our export business, but we also want to add value to products that are produced by local farmers. So we look for opportunities to add more value-added to production, and building the ethanol plant was a way to meet this objective.”
The plant’s markets depend on the type of ethanol produced. High-quality industrial grades can be custom-blended at the plant and usually end up with customers in Canada and the United States. Fuel ethanol is manufactured from local feed crops to produce a high-quality, clean-burning, renewable energy that typically remains in Saskatchewan. NWT can produce 20 million litres of neutral grain spirits (NGS) annually, otherwise known as beverage alcohol, which is sold in Canada, US, Africa and Oceania. The final product the plant produces is dried distillers grain with solubles (DDGS), a nutrient- rich feed source that is sold mainly to livestock producers in Alberta and Saskatchewan.
As the company has grown, Skinner said the number of producers the facility contracts has significantly increased. Although most of its producers are located within a 50-km radius, they have customers that are situated more than 150 km away.
NWT has been recognized as an industry leader in Saskatchewan, and is one of the province’s top 100 businesses as listed in SaskBusiness magazine. Although the company continues to lead, Skinner said that there are challenges ahead.
“We have a lot of regulations in our country and that has certainly challenged the industry as well as farmers,” he said. “There are other challenges like freight logistics. There are obviously challenges for the railways going through the mountains and on the freight side having grain compete with other commodities such as oil and potash. The carbon tax is also going to be an issue especially for industries that use natural gas.”
To meet these challenges, NWT is embarking upon new expansion plans. Skinner said the company is expanding its rail siding and creating a loop track that will enable NWT to more efficiently load grain cars. That project is expected to be completed over the next several years.