Mike Jubinville from Pro Farmer Canada reported yesterday that interest from farmers in building a producer-owned nitrogen fertilizer plant is gaining momentum. Farmers of North America (FNA) has created a standalone business called FNA Fertilizer Limited Partnership, for producers interested in investing in the plant.
"We're facilitating an opportunity for farmers to invest in fertilizer manufacturing," explains spokesperson Bob Friesen. "This is about getting farmers into the value chain, and sharing in some of the profits that we know are to be had."
Producers are currently invited to invest seed capital in the project. "Our target is to sell a thousand seed capital units at $1,000 a piece, so that comes to about a million dollars," says Friesen. The seed capital will be used to complete the required legal, engineering and environmental work.
BMO Capital Markets has been retained to serve as the strategic advisor for development of the plant. Work is underway on developing an equity investment package for farmers.
Friesen notes they will also have to choose a plant operator. "FNA FLP is not an expert operator, and that will be an important piece of the puzzle. With a great deal of experience in similar projects, BMO will help us find the right partner on the right terms," Friesen said.
FNA would like to begin raising equity capital this fall. The plant could be operational by 2016 or 2017.