Food is the new steel at Hamilton’s Lake Ontario ports
Amid a rout in global steel markets, the port that serves Canada’s steel town has found a new focus: food.
“Agriculture is the new steel,” says Ian Hamilton, vice-president with the Hamilton Port Authority, which owns or manages 600 acres of land at the western tip of Lake Ontario.
Mr. Hamilton (yes, that’s his name) is overstating things: He knows grain terminals and large crops will never replace the thousands of steel-industry jobs Hamilton has lost.
But there’s a new optimism at the port, driven by the construction of a third grain terminal, a new flour mill and the recent arrival of a handful of agri-food companies, including a sugar refinery and two craft breweries.
In the past five years, the number of agri-food companies at the port has grown to about 14 amid more than $200-million of investments.
Elsie Lynch, co-owner of port restaurant Two Cougars and a Cafe, has seen this shift firsthand.
“We used to get business from this side,” said Ms. Lynch, waving a hand toward the steel mills, “now we get it from this side.” She is pointing at the north end of the port. That’s where the food companies are clustered, occupying the piers, sheds and warehouses that used to be home to steel makers and metal recyclers.
“Business is still good,” said Ms. Lynch, glancing at a dining room that is three-quarters full late in the morning. Diners wear ball caps and coveralls, and no one seems fussed by the sign at the door that reads No muddy boots.
Since 2009, the amount of grain and fertilizer moving through the Port of Hamilton has more than doubled to 1.7 million tonnes in 2015, making up the volume lost to the steel industry, the port says. Agriculture now accounts for about 18 per cent of the port’s volume.
Meanwhile, steel-related shipments – iron ore, coal and coke – account for 60 per cent of volumes, down from 74 per cent in 2009.
The Hamilton waterfront is famous for the blackened lands and smog-belching steel mills that serve the once-mighty Ontario manufacturing sector. Ore and coal still arrive by ship from the mines of eastern Quebec, but Hamilton’s steel output has plunged amid slumping global demand and cheaper supplies from China.
Stelco, now known as U.S. Steel Canada, is in bankruptcy protection and has halted steel production. Next door is ArcelorMittal Dofasco, which churns out a yearly 4.5 million tonnes of steel and employs 5,400, even as its parent posts an $8-billion (U.S.) loss amid falling prices.
“We need two things in Hamilton: We need jobs and we need [tax] revenue. It’s been very difficult [since Stelco fell into bankruptcy],” said entrepreneur Ron Foxcroft, owner of Fluke Transport, which moved its main operations to the port six years ago. Fluke now rents 400,000 square feet in warehouse space from the port and operates 500 trailers that carry consumer goods – no steel, no auto parts.
Despite the troubles in the steel business, it remains the port’s biggest industry and its biggest revenue generator. But agriculture is the port’s fastest-growing business and has become the second-largest, measured by cargo tonnage and revenue.
For growers, the rise of a new agri-food hub offers new markets for their crops. “Investments in agriculture, particularly grains, are always something we support and are pleased to see,” says Barry Senft, head of Grain Farmers of Ontario, which represents the corn and soybean growers that dominate the farmland in Southwestern Ontario.
McKeil Marine Ltd., which has operated tug boats in the harbour for decades, is among the shipowners adding ships to move grain. The booming agriculture business at the port has helped the company thrive in a tough economic climate, said Blair McKeil, son of the company’s founder.
In 2007, the year the failed Stelco was bought by U.S. Steel, the port’s leaders took a hard look at its list of tenants, which was dominated by steel makers and related businesses. The port began approaching agricultural companies – grain shippers and fertilizer distributors – and pitching the port’s strong points: access to the St. Lawrence Seaway and two major railroads, the nearby system of highways and the U.S. border.
“It’s a great location,” said Derek Jamieson, president of P&H Milling Group, the Parrish & Heimbecker subsidiary building a $45-million (Canadian) flour mill that will process Western Canadian wheat for Ontario bakeries.
“Once you start to get known as a hub, they come to you,” the port’s Mr. Hamilton said, seated in a corner office at its waterfront headquarters. “We’re squeezing people in now.”
On this day, shipping on the seaway is closed for the season and the only ships in sight are the ones tied up at the piers. But on the piers, pile-driving is under way at P&H’s flour mill and the concrete silos have begun taking shape at G3 Canada Ltd.’s grain terminal.
Karl Gerrand, chief executive officer of G3, which took control of the former Canada Wheat Board last year, said the Winnipeg-based company picked Hamilton as the place to build a new terminal partly because the rail access will allow the company to buy and ship farmers’ crops year round. The terminal, due to be open by next year, gives the company its first footprint in the Southern Ontario crop market, home to the country’s biggest growers of corn and soybean. The site also completes the G3’s eastern supply chain, which feeds its terminals in Trois-Rivières before reaching overseas buyers.
“Hamilton’s really important for us,” Mr. Gerrand said by phone.
To make room for more tenants, the port is eyeing the 800 acres owned by U.S. Steel Canada. The land would require a major cleanup after more than a century of steel making, but the port is accustomed to making contaminated land suitable for other uses, said Bruce Wood, the port’s chief executive officer.
“It’s not a pretty site, but that’s what we do,” Mr. Wood said.
Article courtesy of Globe & Mail