Ocean Spray details $90M cranberry operation for Rogersville, N.B.
Last Updated: Wednesday, January 14, 2009 | 1:29 PM ET
CBC News
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N.B. Premier Shawn Graham, right, speaks with Ocean Spray officials prior to the company discussing its plan for the cranberry industry in Rogersville. (CBC)Ocean Spray outlined its plans to invest $90 million in Rogersville, N.B., on Tuesday night in a highly anticipated meeting in the village north of Moncton.
People in the community of 1,100 people began lining up an hour before the world's largest cranberry co-operative started detailing plans for a massive investment in the area.
'We desperately need more fruit.'— Paul Stajduhar, Ocean Spray representative
Paul Stajduhar, the Massachusetts-based company's vice-president of strategic and business development, told the packed legion hall that Ocean Spray plans to eventually develop more than 3,200 hectares of farmland as part of a $90-million investment that will create 100 jobs.
He said the demand for cranberries is outpacing Ocean Spray's ability to turn out the fruit from bogs already in production. The company will be leasing the necessary land from the provincial government for the new operation.
"The entire industry is 850 million pounds. In this decade alone, Ocean Spray has generated new demand for 150 million cranberries," Stajduhar said. "Hopefully that gives you an idea of why we need more fruit. We desperately need more fruit."
The company produces two-thirds of the world's supply of cranberries. But Stajduhar told the crowd that the company's cranberry growers realized that they could not meet the global thirst for the berry.
"They made the decision that as individuals they could not expand cranberry production to the extent that the Ocean Spray needed. So they made the choice to act collectively, for the first time in our history, to invest in cranberry bogs," he said.
"Traditionally, they owned their bogs individually and as a collective owned the factories and the brand. So they made the choice to collectively own cranberry bogs."
That prompted a worldwide search for the best spot to invest in new cranberry bogs and Stajduhar said that search led the company to Rogersville.
The company is looking at a business plan that will see the production come in over several phases.
Smaller plot
Ocean Spray submitted an environmental impact assessment registration for the project on Dec. 18 with the Department of Environment.
If the company receives environmental approval in March, it will seek to get 141 hectares growing first. Stajduhar said Ocean Spray wants to work out any initial problems on the smaller plot of land.
"We will face those issues as well. The measure of our success is going to be how quickly whatever problems may emerge and get 350 very productive acres in the ground and then move on from there," he said.
Once the first 141 hectares are in the ground, the company will look to expand to just less than 770 hectares of cranberry bogs on the 3,200 hectares that are leased from the province.
Ocean Spray is welcoming local producers into the co-operative as well. If the project goes forward, it will be at least three years before the first cranberries are harvested from the bogs around Rogersville. Once in production, the bogs will be able to produce berries for 100 years.
Most people like Eloi Maillet came out to the public meeting to hear about the jobs. He pressed Stajduhar on whether the jobs would be full time or simply more seasonal employment. The company official told Maillet that many of the jobs will be full time.
Premier to set up skills registry in area
Premier Shawn Graham made a surprise appearance at the Rogersville event. With so much of the discussion revolving around jobs, Graham told the crowd that the province will set up a registry of people's skills in the area to make it easier for the company to find workers.
All this demand for cranberries prompts farmers such as Gilles Martin to wonder if there's room for him in this business.
"I'm just wondering if people like myself and I know many others are interested in building their cranberry bog on their property," Martin said.
Stajduhar said Ocean Spray welcomes new farmers, who would get a share of the profits by joining the co-op.
The introduction of Ocean Spray to the province would be a significant boost to the New Brunswick industry. There are 21 cranberry operators in the province working on 210 hectares of farmland. In 2007, the cranberry industry produced 3.1 million kilograms of product worth $3.8 million in farmgate earnings. The industry is predicting that both the production and value also grew in 2008.
Ocean Spray lease will add to N.B. coffers
Not only will local farmers and companies enjoy the direct investment and spinoffs from Ocean Spray's potential investment in Rogersville. The New Brunswick government also stands to benefit thanks to the lease arrangement that would kick in.
The fee schedule posted on the Department of Agriculture and Aquaculture's website for leasing land to be used for cranberry production varies depending on the future use for the public property and how long it is in use.
For supporting land, such as drainage areas, reservoirs, tail water ponds, lakes or buffer zones, companies must pay $5 per hectare. For productive land, cranberry producers must pay $5 per hectare for the first three years and work up to $200 per hectare by the seventh year.
Based on the fee schedule, the plan to get 141 hectares running first would cost the company $705 annually for the first three years. If Ocean Spray put the planned 770 hectares into operation with the 2,428 hectares of supporting land as discussed on Tuesday night, by the lease's seventh year the province would be earning $154,000 for the productive land and $12,140 for the supporting property.
That money would flow into the province's general revenue account.
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