December 12, 2000

PORTAGE LA PRAIRIE--Premier Gary Doer and Agriculture and Food Minister Rosann Wowchuk joined in the announcement of the first phase of J.R. Simplot Company’s new potato processing plant near Portage la Prairie which will see an initial company investment of $120 million.

Subsequent phases will result in a total investment of $150 million into the french fry and other potato product facility, the creation of over 230 direct jobs in the first phase and an estimated total of 514 indirect and farm gate jobs. During the construction period, the plant is expected to generate 1,600 direct and indirect jobs.

The plant will also be the first potato plant in Canada to use an environmentally friendly biogas recovery and reuse system, which will significantly reduce greenhouse gas emissions from the facility.

"Following the necessary full environmental process and construction, we expect the plant’s processing volume to start at 55 million pounds of potatoes, growing to an initial capacity of 300 million pounds. By the completion of the second phase of this plant, Manitoba will be the potato capital of Canada," said Doer. "This excellent announcement continues us on a path of leading in economic development in every region of the province, while ensuring development is environmentally responsible."

"This is a great day for Manitoba’s agriculture sector and for the province as a whole as we enter a new era of economic activity in the Portage region," he said.

"The decision by Simplot to construct a new potato processing plant here will help in our efforts to diversify Manitoba’s farm economy by providing expanded markets for high value products," said Wowchuk. "Despite common challenges we face, our agricultural community overall is vibrant and strong. And the future continues to look brighter every day."

Doer and Wowchuk thanked Rick Fisch, senior vice-president, J.R. Simplot Company, Portage la Prairie Mayor Ian MacKenzie and reeve of the Rural Municipality of Portage, Jim Knight, for their work to help make today’s major announcement a reality.

"The project is contingent upon the proposal meeting environmental standards and being subjected to the full public hearing process by the Clean Environment Commission, which is in contrast to previous projects impacting on the Assiniboine River," said Doer. "I strongly believe that assuring strong environmental standards at the front end of major economic initiatives means long-term environmental and economic sustainability for our futures and our children’s futures."

Upon successful completion of the environmental process, construction will begin during 2001 with production slated to begin in 2002. A significant portion of the product will be shipped by rail to North American markets.

Wowchuk pointed to increased potato and seed potato production as key parts of the province’s strategic diversification strategy in agriculture, noting that at current prices and average yields, an acre planted to potatoes yields total revenue of at least $1,400, while that same acre of wheat yields gross revenues of about $150. "This low price for grain crops represents a net loss for most prairie producers during this period of unfortunate and high subsidies by our U.S. and European trading partners."

In addition to expanded seed potato production in other regions of the province, a portion of the plant's byproducts could be used to feed up to 25,000 head of cattle, which will contribute significantly to expanding the province's feedlot industry.

"You can see the potential for increasing the value of our farm production with this kind of diversification," said Wowchuk.

In addition to the hundreds of direct and indirect jobs being created by this project, an estimated $75 million over 10 years in additional tax revenue for the province will be generated. As well, over the next 10-year period, it is estimated that the Manitoba economy will grow by over $650 million as a result of this project.

New infrastructure requirements for the plant total $21 million on-site and $15.45 million for off-site upgrades. The provincial government will be investing a total of $8.65 million in new water and sewage infrastructure, most of which will be off-site. The province’s capital investment will be made over the next two years and be more than recovered through taxation revenue during the same two-year period. As well, a total of $5.65 million will be invested by municipal sources with Simplot contributing the majority towards the total infrastructure costs, in addition to plant construction itself.

The province will also collaborate with the company on training and recruitment programs to ensure that those who most need the jobs have a fair shot at them.

Doer noted the strengthening of the rural Manitoba economy with recent announcements such as the expanded Nexen operation in Brandon, the new Albchem plant near Virden and this new Simplot facility, totalling over $200 million in new private investment in southwest Manitoba announced within the past two weeks.

"Manitoba’s advantages are shining brightly and attracting new and innovative private investments every day," added Doer.

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