Parmalat getting land to expand Winnipeg milk plant

Dairy giant Parmalat plans to expand its Winnipeg milk operations and has been cleared to buy the acres to do so.

While the Italian company’s Toronto-based Canadian arm has so far been quiet about its plans, Winnipeg’s city council on Wednesday voted to approve the sale of about 15 acres to Parmalat just south of the city’s St. Boniface Industrial Park.

The new site will be in the same neighbourhood where the ill-fated OlyWest joint venture had previously planned to build a pork slaughter and processing plant in 2005, a proposal long since scuttled.

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In a committee report this week, city officials said they “became aware” in discussions with the provincial agriculture ministry late last year that Parmalat is looking for a “suitable new location” to invest $50 million in a new fluid milk processing plant and new processing equipment.

The new plant, city officials said, “will result in an increase of (Parmalat’s) production of fluid milk in Manitoba.”

Parmalat’s current Winnipeg plant, which it acquired when it took over Beatrice Foods in 1997, is in a century-old building in a residential area of St. Boniface, not far from the city’s downtown and hemmed in on all sides, about seven km west of the proposed new space.

The province “is pleased to have worked closely with Parmalat to strengthen their production here in Manitoba with a significant new processing plant,” provincial Agriculture Minister Ron Kostyshyn said in a city release Tuesday.

Parmalat, which operates 17 plants across Canada — also including cheese and creamery facilities in Manitoba, at Grunthal and St. Claude respectively — “has become a global leader in food production, working closely with the Dairy Farmers of Manitoba,” Kostyshyn said.

An increase in processing capacity in Manitoba, he said, “will strengthen the provincial economy and bring good jobs to our province.”

“I am very pleased that the proposed agreement with Parmalat sets their business up for success right here in Winnipeg, and that Parmalat will lead development in the industrial park as the catalyst to attract further industrial business to set up as we partner to service the area,” Winnipeg Mayor Brian Bowman said in the same release.

Servicing costs for the site are expected to run to about $8.2 million, the city said, of which $2.59 million will be offset by the sale proceeds paid by Parmalat.

An agreement, reached in principle with the company and province, would see the city front-end the province’s $2 million share of the remaining $5.61 million in servicing costs, while Parmalat contributes $1.5 million.

The city said it would recoup its investment in servicing the site through municipal and business taxes over about two decades, perhaps sooner if other new projects follow nearby.

City hall observers have noted approval for the Parmalat land deal appears to have moved forward at a relatively fast clip. City officials said the company “has imposed critical timelines to commence construction of its new facility, in order to meet its production demands.”

A deal for a new site for Parmalat “benefits the city in many ways,” officials said, “including but not limited to the removal of an industrial operation, and reduced noise levels from within an existing residential area.”

A new Parmalat site would also increase the “marketability” of the balance of the city-owned lands in the former OlyWest area, city hall said, noting “at least five (other) potential purchasers” are already interested in specific sites there.

Servicing work to be done will include both a “temporary and permanent” road to the site, drainage, street lighting, extension of electrical and natural gas service, water mains, wastewater sewers, a wastewater lift station and “partial construction” of a storm water retention basin.

Parmalat has already engaged Winnipeg-based Manshield Construction for development of its new site, including site prep work, city hall said. –– Network

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