The company cited inflation as part of the reason
By Diego Flammini
Plans on a multimillion-dollar canola crush facility in Northgate, Sask., are on hold.
Ceres Global Ag Corp announced it will not move forward with the project, estimated to cost about $350 million.
The current financial climate makes it difficult for the company to proceed with construction.
Ceres cited “inflationary pressures resulting in higher costs than initially projected and shifting macroeconomic conditions” in a June 24 press release.
As a result of cancelling an equipment design and supply contract, Ceres estimates its penalties will range between $25 and $30 million.
The company originally announced plans for the project in May 2021.
The facility would’ve had the capacity to process 1.1 million metric tons of canola and refine over 500,000 metric tons of canola oil annually. It would’ve also created 50 Saskatchewan jobs.
Despite the setback, the provincial government is confident it can attract more investment.
“Saskatchewan has seen strong economic growth and job creation recently, is leading the nation in several economic indicators, and has welcomed over $14 billion in investments announced across a range of sectors,” a statement from Trade Minister Jeremy Harrison’s office said. “
Saskatchewan remains one of the top locations in the world to do business and we remain focused on ensuring we have a strong, competitive business environment to continue this economic momentum. This includes recent enhancements to the Saskatchewan Value-Added Agriculture Incentive to remain a leader in agriculture production and processing as we work to achieve our Growth Plan goals."
Ceres committed to exploring ways to pursue a canola crush project, “but there is no guarantee that such a project will come to fruition or would be similar to the previously announced project.”