BUSINESS
C4
THURSDAY, MARCH 19, 2015
Saputo to upgrade downtown plant BY HARLEY RICHARDS ADVOCATE BUSINESS EDITOR Saputo Dairy Products Canada is preparing to modify its downtown plant. On Wednesday, the dairy processor received site development approval from Red Deer’s municipal planning commission for a number of additions to its longtime facilities at 5410 Gaetz Ave. These include a 7,080-square-foot warehouse, a 2,200-square-foot waste water storage area, a 1,700-square-foot equipment cleaning room and a 540-square foot silo access corridor. Saputo also plans to build three new 75-foot (23-metre) silos, and to demolish 16,644 square feet of an existing 21,800-square-foot warehouse on the west side of its property. The land falls within Red Deer’s Railyards district, which under the city’s Greater Downtown Action Plan is slated to become a distinctive urban neighbourhood with residential and commercial development. The commission heard that Saputo’s plans are supported by the Greater Downtown Action Plan Steering Committee, and that notifications sent out to 62 nearby landowners prompted no objections. Two years ago, Saputo received development approval for a new 21,075-square-foot building on the site, with that structure to measure nearly 30 feet (nine metres) in height and have a 75-foot (23-metre) tower on top. A 3,250-square-foot addition to the existing plant was also proposed, as was demolition of the old warehouse. The commission was told on Wednesday that due to “economic constraints” that work was never undertaken. Dianne Wyntjes said the new plan will result in a “less industrial look” than its predecessor, and result in a better fit for the Railyards. Mayor Tara Veer agreed. “I think this application not only accommodates business expansion, it transitions us into a more commercial aesthetic.” Saputo’s plant received previous additions in 2008
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BRIEF Home sales continue to lag behind 2014 pace Home sales in Red Deer and the surrounding area continue to lag behind last year’s pace. The Central Alberta Realtors Association reported on Wednesday that 263 homes were sold through the Multiple Listing Service in February. That marked an 11.1 per cent decline from the same month in 2014. Two months into 2015, total residential sales for the year are down 16.5 per cent from the same period last year. However, sales activity across Alberta was 27.1 per cent lower in February than for the same month in 2014, the association pointed out. The average selling price of homes in the Red Deer area last month was $304,572, down 3.3 per cent from a year earlier. The month did produce a 21.8 per cent jump in new residential listings, as compared with February 2014, to 692. Active residential listings as of the end of this February numbered 2,223, up 5.3 per cent. At the current rate of sales, these listings would sustain the market for 8.5 months. That compares with 7.1 months at this time last year.
Feds watching housing market carefully, but no plan to cool it down: Harper MISSISSAUGA, Ont. — Prime Minister Stephen Harper says the federal government is keeping a careful watch on borrowing and lending tied to the country’s hot housing market. But Harper says Ottawa has no immediate plans to take action to cool it down, like it has in the past. Responding to a question in Mississauga, Ont., he said debt-servicing costs are falling and default rates remain extremely low. Harper made the remarks at a time when big banks and other lenders are cutting mortgage rates to kick off the spring real-estate season. They also come amid concerns Canadians have piled on too much debt and worries that housing markets in Toronto and Vancouver have become overheated. Harper says he’s not “unconcerned” about the housing-market situation, but he believes Canada’s financial institutions remain very strong.
Whitecap Resources buying light-oil producer Beaumont Energy for $587.5M CALGARY — Whitecap Resources Inc. (TSX:WCP) has signed a deal to acquire privately held Beaumont Energy Inc. in a stock-and-cash deal valued at $587.5 million including debt. Under the agreement, Beaumont shareholders can receive $5.62 in cash or 0.40 of a Whitecap common share for each Beaumont share they hold. The cash available under the deal is capped at $103.4 million. Whitecap will also assume about $70.5 million in Beaumont debt. Beaumont has operations primarily in the Kerrobert area of west-central Saskatchewan, located nearby Whitecap’s existing operations. Whitecap said the deal will be partially funded with a $110-million bought deal equity financing. The company has signed a deal with a syndicate of underwriters to issue 8.149 million subscription receipts at a price of $13.50 each. Shares in Whitecap, which announced the deal after the close of markets, were up 57 cents at $13.93 on the Toronto Stock Exchange on Wednesday.
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Photo by JEFF STOKOE/Advocate staff
Saputo Dairy Products Canada has received development approval to upgrade its plant on Gaetz Avenue in downtown Red Deer. and 2011. Its landmark brick Alpha smokestack dates back to 1936, when Central Alberta Dairy Pool built a plant there. That smokestack has been declared by the city to have a historical significance that warrants preservation. The city’s Planning Department said the design, colours and materials to be used in the additions
currently proposed should complement the historic character of the plant. Based in Canada, Saputo operates a number of plants worldwide. It produces cheese, milk, cream, cultured products and dairy ingredients, marketing these under a variety of brand names. hrichards@reddeeradvocate.com
Rough week for the oilpatch as three companies announce job cuts BY THE CANADIAN PRESS CALGARY — It’s been a rough week for many in the oilpatch. Talisman Energy Inc. (TSX:TLM), ConocoPhillips Canada and Nexen Energy ULC have all announced job cuts this week. Talisman, which is set to be taken over by Spain’s Repsol SA in the coming months, is reducing its workforce by 10 to 15 per cent, mostly at its Calgary head office. That amounts to between 150 and 200 jobs — both contractors and employees. “We’ve reduced our 2015 capital spending program. With that comes reduced activities across our business and frankly, just not enough work to support a number of the people that would be impacted,” spokesman Brent Anderson said. Meanwhile, ConocoPhillips Canada — a division of the Houston-based energy giant — is cutting seven per cent of its Canadian workforce, or around 200 jobs, spokeswoman Kristen Ashcroft said. “As you know, we’re in a challenged economic environment. We’ve had to make some tough decisions, which staff were informed of today.” Unlike the Talisman cuts, the ConocoPhillips staff
reductions affect only employees, primarily at the company’s Calgary office. The cuts follow an announcement earlier this week by Nexen Energy that it was cutting 400 jobs including 340 positions in North America and 60 in the United Kingdom. “While regrettable, these organizational changes are necessary to align the company with our reduced capital spending program. We take these decisions seriously, and all impacted employees have been treated fairly and with respect,” Nexen CEO Fang Zhi said. Despite the cuts, Nexen said it’s compliant with the commitments it made to the federal government when CNOOC’s controversial $15.1-billion takeover of the company was approved. Industry Canada said it’s reviewing the announcement to ensure compliance with the Investment Canada Act. There have been widespread spending cuts across the oilpatch since oil prices began their dramatic decline late last year. The U.S. benchmark is sitting below US$43 a barrel — a steep drop from the $107 level it hit last June. Other firms to have announced layoffs in recent months include Suncor Energy Inc. (TSX:SU), Shell Canada Ltd. and Cenovus Energy Inc. (TSX:CVE).
Oil companies come forward despite turmoil 2015 RED DEER OIL & GAS EXPO BY HARLEY RICHARDS ADVOCATE BUSINESS EDITOR It’s not the economic backdrop that Dwayne McArthur wanted in the months leading up to the 2015 Red Deer Oil & Gas Expo. But the organizer of the show, which will take place Sept. 17 to 19 at Westerner Park, said many energy companies are stepping forward despite the turmoil caused by low oil and gas prices. “We expected, because of the price of oil, that there would be companies that say, ‘It’s just not in our budget this year.’ And that has happened.” But, added McArthur, many others are booking space at the Expo — which returns to Red Deer after its inaugural event in 2013. They appear intent on ramping up their marketing efforts, particularly given the relatively small cost of renting a booth at the show. “If you have marketing people and sales people who are on salary anyway, they may as well be at the show,” he said. In fact, some prospective exhibitors told him two years ago that they were too busy to take part in the 2013 Expo. McArthur said some big multi-nationals have had to bow out because their budgets have been curtailed by decision-makers in places like Houston, Tex. “What I have found is the Red Deer companies, the Edmonton companies and the Calgary companies — the companies that are aggressive about marketing and serious about not going into this downward spiral — are saying, ‘We can’t not be there. We’re
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Harley Richards, Business Editor, 403-314-4337 E-mail hrichards@reddeeradvocate.com
still going to market; we’re still going to advertise.’” Those companies that do attend this year will discover some changes from 2013. Key among these is the fact the Red Deer Oil & Gas Expo has expanded from a Wednesday-Thursday event to one running from Thursday to Saturday. This was in response to a survey of exhibitors and attendees who suggested weekend hours would allow more people from outside Central Alberta to take part. Another change for 2015 is about a one-third increase in the number of booths available. This is being accomplished by expanding the outside exhibit area and dividing many of the larger indoor spaces into smaller ones. The beer gardens are being moved from the second level of the Prairie Pavilion to the Chalet. And a meet-and-greet social is planned for exhibitors on Wednesday night at the new Microtel by Wyndham hotel in Gasoline Alley. An oil and gas job fair was going to be added to this year’s Expo, but may not proceed if the industry job market doesn’t improve, said McArthur. “If we don’t have enough interest, what we’ll do is we’ll put a sign up that says that the job fair was postponed from this year until 2017.” McArthur said he’s boosted promotion of the 2015 Red Deer Oil & Gas Expo, and expects another successful event. “I don’t believe that there’s anybody in the Edmonton-Calgary corridor that is not going to know that there’s an oil and gas expo in Red Deer in September.” hrichards@reddeeradvocate.com
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