La Coop fédérée and IFFCO on Dec. 16 announced a “strategic pause” in their plans for a urea plant in Bécancour, Quebec. They are suspending the preparation of preliminary plans and specifications to establish project costs and the signing of an EPC contract (engineering/procurement/construction). They report that construction costs are now estimated to be in excess of C$2 billion, and this suspension will allow the shareholders to review the global strategy of financing, construction and execution.
They say the project now requires a new approach to ensure its realization and viability and in no way is an abandonment of the project.
In coming months, the focus will be put on the search for new partners.
"I have seen for myself that there is interest in the project in the region. We have gone through numerous steps at a fast pace to date, and now we need to refocus the project to ensure its viability in the medium- and long-term," declared Manish Gupta, CEO of IFFCO Canada and IFFCO’s representative on the board.
"Our cooperative values lead us to work in a transparent and rigorous manner, in a perspective of achieving long-term results. We believe that our future fertilizer plant at Bécancour answers a need in the market and that’s why we are moving forward to bring in new partners who will ensure the project’s success," said Gaétan Desroches, CEO of La Coop fédérée. "We recognize and salute the collaboration of all representatives of the government of Québec involved in this project, who have strived to contribute to its optimal development," added IFFCO Canada Director General, Claude Lafleur.
La Coop fédérée and IFFCO said they remain convinced of the value of the project’s major assets, including the quality of the future site in the Bécancour Industrial Park, the strategic access to port and rail facilities, and the favorable context of the North American energy sector with its access to natural gas at a competitive price. Lastly, they said the current state of the market and other similar projects in North America allows IFFCO Canada to take this pause without interfering with the project’s positioning.