Wednesday 10 October 2012

Investment of $1.2 billion to La Coop fédérée and IFFCO Canada

The Quebec government will support the Becancour region with an investment in a $1.2 billion fertilizer production facility in the form of government grants, government loans, and government funding.

The Coop fédérée and IFFCO will be partners in the project. These large agricultural cooperatives are included in the $1.2 billion investment.

Established in 1975, IFFCO is a United Arab Emirates based business, which manufactures and markets agricultural value-added goods. IFFCO operates under the following business segments: Fast Moving Consumer Goods (FMCG), Commodities, Oils and Fats, Frozen Foods, and Institutional Services. IFFCO also provides related derivatives and intermediates associated with these business segments.

IFFCO is set to invest between $100 million to $200 million in the project.

U.S. Awasthi, managing director and CEO for IFFCO, said that after examining 50 potential sites, Becancour was chosen because of the accessibility of natural gas needed in the production of urea, the essential product used in nitrogen fertilizer. He added that Becancour, located in central Quebec’s agricultural heartland, also provides the proximity of a port on the St. Lawrence River. It also offers access to railway and major road transportation networks to facilitate distribution of the fertilizer in Quebec, eastern Canada and the northeastern United States.

Founded in 1922, La Coop fédérée is the biggest agri-food enterprise in Quebec and ranks among the 100 biggest cooperatives and mutual in the world. It is owned by its’ more than 90,000 members grouped in 103 cooperatives spread through several provinces of Canada. The Coop federee is present throughout the agri-food chain and, as a wholesaler, provides agricultural producers with the goods and services necessary to operate their farm businesses.

According to CBC news, The Coop federee will act as co-investor in this transaction and will distribute the product in its vast network of more than 175 stores across several regions of Canada. "We are very proud that IFFCO has chosen to call on the Coop federee's recognized expertise. Together, we will be able to extend, even more spectacularly, the principles of shared benefits that drive the cooperative movement. When the product is launched, all Québec and Canadian agricultural producers will benefit. This project will allow Quebec and Canada to consolidate even further their role as leaders in agriculture and foodstuff production," added Denis Richard, President of the Coop federee.

“The new factory will produce urea, a necessary composite for fertilizer.”

“Urea requires a large quantity of natural gas to be produced and Becancour is located near a pipeline.”

This Government supported program will demonstrate that government grants and government loans can be used to partner with private businesses and achieve success that will have a broad impact on local and regional economies.

More than 500 workers will be hired to help build the factory. With the completion of the factory, the facility will employ 200 people.

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