BUSINESS

Development of Quebec fertilizer plant suspended as new financial partners sought

12/16/2014 10:46 EST | Updated 02/15/2015 05:59 EST
MONTREAL - Developers of a large fertilizer plant in Quebec announced Tuesday the suspension of work on the project as they seek new financial partners.

Partners Indian Farmers Fertiliser Co-operative (IFFCO) and Quebec agricultural co-operative La Coop federee say they need extra time because the project's costs have nearly doubled in two years to more than $2 billion, from $1.2 billion.

The delay was announced about three months after the planned start of operations was put off by one year to 2018.

The co-operatives denied the "strategic pause" signified an abandonment of one of Quebec's largest industrial projects in the last 25 years.

"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," stated IFFCO Canada chief executive Manish Gupta.

The partners say they remain convinced of the fertilizer project's value because of its location in Becancour, access to port and rail services and competitive natural gas prices. It says the current state of the market and other similar projects in North America ensures the delay won't interfere with the project's positioning.

The Quebec government has supported the project by investing $5 million through Investissement Quebec for a feasibility study.

The plant is expected to create hundreds of jobs during construction and more than 200 jobs during operation.

IFFCO is one of the world's largest fertilizer co-operatives with more than US$5 billion of annual sales.