There is an old adage for Stock Market investment; buy on the rumour, sell on the news. The majority of my previous blogs deal with the potential large scale investments that will, if they all succeed, herald a new beginning for Prince Rupert.
This blog serves as a brief summary of the facts as they stand today.
1. Prince Rupert Port Authority. Prince Rupert's new port has been a great success. In 2009, whilst every port on the West Coast of Continental North America lost volume, Prince Rupert increased theirs by 45%. The owners, Maher Terminals are already planning an expansion programme that should begin in 2011. The port has two major advantages; 38 hours closer sailing time to Asia and the third deepest natural harbour in the World.
2. Canpotex. Canpotex, a multi-billion dollar company that exports potash around the World, is considering locating a new export facility in Prince Rupert. If they choose Prince Rupert the immediate benefit to the local economy will be in construction but the real benefit is the long term employment once the site is operational. It is felt that if Canpotex chooses Prince Rupert other companies will follow.
3. Watson Island Pulp Mill. The Pulp Mill has not been operational for ten years. The City of Prince Rupert now own it and have put it up for sale for $13M. They have had six bids and are in the process of deciding which one to accept.
4. Buyer's market. Prince Rupert is still a buyer's market for Real Estate but signs are that this is changing. The amount of property on the market has decreased markedly in the last four months due to two significant factors;
the speculation has resulted in the renovation properties up to $100,000 being bought by Flippers; people are waiting for the announcements regarding these investments to be confirmed before listing their properties in order to realise a better sale price.
Conclusion: There is a best case, medium case and worst case scenario;
Best Case: All of the potential investments happen and the local Real Estate market booms.
Medium Case: Only one of the investments happen and the local Real Estate market increases substantially from its low.
Worst Case: None of the investments happen and Prince Rupert carries on as it presently is.
Opinion: There is too much interest from too many major players for Prince Rupert not to have a bright future. The fact is that if we can attract one big name the rest will assuredly follow.
Monday, February 15, 2010
Multi-Billion Dollar company looks to invest in Prince Rupert
Canpotex – The story so far
Who are Canpotex? Canpotex is the marketing arm of the three largest potash producers in Canada – Agrium, Mosaic and The Potash Corporation of Saskatchewan.
What is potash? Potash is a naturally occurring mineral that is primarily used in fertilizers.
What is the market? Huge. The worth of these three companies is measured in the Billions. Asia and particularly China is a massive importer of potash.
What has Canpotex got to do with Prince Rupert? The Asian market for potash is already large but is forecast to expand as the Chinese economy continues to grow. Potash is used to grow food so demand is always in existence. Canpotex has plans to expand its West Coast shipping capacity to meet this demand. They have been looking at two possible solutions;expanding an existing site in Vancouver or building a new terminal in Prince Rupert.
Why would Canpotex choose Prince Rupert over Vancouver? Surely expanding the existing site in Vancouver would be cheaper than constructing a new facility in Prince Rupert? According to Canpotex, the costs of expansion in Vancouver are roughly the same as the costs of building a brand new facility in Prince Rupert. Prince Rupert has several advantages over Vancouver:
1. Prince Rupert is 38 hours closer sailing to Asia than any other West Coast port in continental North America.
2. Prince Rupert has a very skilled and very loyal work force. My opinion is that labour can be sourced in Rupert that would stay with Canpotex for a long time. In Vancouver the job market is much larger so workers tend to change jobs more often. I believe that the benefits of worker loyalty will form a significant part of Canpotex’s decision making process.
3. Prince Rupert’s pool of skilled workers is already high, however the recent closure of the Eurocan Pulp Mill in Kitimat has put an additional 500 skilled workers into the local area jobs marketplace.
4. A public meeting was held at the local theatre six months ago where representatives from Canpotex, CN Rail and Prince Rupert Port Authority answered questions about the proposed site in Prince Rupert. The capacity of the theatre is 700. 700 people showed up with an overwhelming show of support for the project. The citizens of Prince Rupert are firmly behind this project and will do all they can to ensure its success.
5. An understanding has been reached between Canpotex, Provincial and Federal Government and First Nations that resolves all land issues enabling Canpotex to proceed with the project in Prince Rupert.
The original timetable discussed at the public meeting gave a date of December 2009 as when an announcement would be made regarding the location of the new facility. This announcement has been delayed, probably due to the volatility of the post-recession world economy.
Conclusion: The introduction of a large operation like Canpotex to Prince Rupert will be a massive boost to our city. Not only will there be an influx of jobs as a direct result of their entry into Prince Rupert but the message will be sent to the world marketplace that Prince Rupert is open for business. The extraordinary success of Prince Rupert Port proves to the world that big business can operate effectively, efficiently and profitably from our wonderful city and as the public meeting showed, the residents of Prince Rupert are ready to welcome Canpotex with open arms. I am hopeful that the extensive list of benefits that Prince Rupert possesses will be sufficient to persuade Canpotex to locate their new facility here.
Who are Canpotex? Canpotex is the marketing arm of the three largest potash producers in Canada – Agrium, Mosaic and The Potash Corporation of Saskatchewan.
What is potash? Potash is a naturally occurring mineral that is primarily used in fertilizers.
What is the market? Huge. The worth of these three companies is measured in the Billions. Asia and particularly China is a massive importer of potash.
What has Canpotex got to do with Prince Rupert? The Asian market for potash is already large but is forecast to expand as the Chinese economy continues to grow. Potash is used to grow food so demand is always in existence. Canpotex has plans to expand its West Coast shipping capacity to meet this demand. They have been looking at two possible solutions;expanding an existing site in Vancouver or building a new terminal in Prince Rupert.
Why would Canpotex choose Prince Rupert over Vancouver? Surely expanding the existing site in Vancouver would be cheaper than constructing a new facility in Prince Rupert? According to Canpotex, the costs of expansion in Vancouver are roughly the same as the costs of building a brand new facility in Prince Rupert. Prince Rupert has several advantages over Vancouver:
1. Prince Rupert is 38 hours closer sailing to Asia than any other West Coast port in continental North America.
2. Prince Rupert has a very skilled and very loyal work force. My opinion is that labour can be sourced in Rupert that would stay with Canpotex for a long time. In Vancouver the job market is much larger so workers tend to change jobs more often. I believe that the benefits of worker loyalty will form a significant part of Canpotex’s decision making process.
3. Prince Rupert’s pool of skilled workers is already high, however the recent closure of the Eurocan Pulp Mill in Kitimat has put an additional 500 skilled workers into the local area jobs marketplace.
4. A public meeting was held at the local theatre six months ago where representatives from Canpotex, CN Rail and Prince Rupert Port Authority answered questions about the proposed site in Prince Rupert. The capacity of the theatre is 700. 700 people showed up with an overwhelming show of support for the project. The citizens of Prince Rupert are firmly behind this project and will do all they can to ensure its success.
5. An understanding has been reached between Canpotex, Provincial and Federal Government and First Nations that resolves all land issues enabling Canpotex to proceed with the project in Prince Rupert.
The original timetable discussed at the public meeting gave a date of December 2009 as when an announcement would be made regarding the location of the new facility. This announcement has been delayed, probably due to the volatility of the post-recession world economy.
Conclusion: The introduction of a large operation like Canpotex to Prince Rupert will be a massive boost to our city. Not only will there be an influx of jobs as a direct result of their entry into Prince Rupert but the message will be sent to the world marketplace that Prince Rupert is open for business. The extraordinary success of Prince Rupert Port proves to the world that big business can operate effectively, efficiently and profitably from our wonderful city and as the public meeting showed, the residents of Prince Rupert are ready to welcome Canpotex with open arms. I am hopeful that the extensive list of benefits that Prince Rupert possesses will be sufficient to persuade Canpotex to locate their new facility here.
Six bids for defunct Pulp Mill meet $13.5M asking price
The City of Prince Rupert, who took over ownership of Watson Island Pulp Mill in Port Edward following Sun Wave's inability (or unwillingness) to pay their outstanding property tax bill, have received six offers to purchase that meet the $13.5M asking price.
Details of the bidders are a closely guarded secret although Lax Kw'alaams Band has made their involvement public knowledge.
The site, one of the few deep water harbourages in North America with direct docking access to land plus a railway line going into the middle of the site, is situated 15 highway kilometres from the new port development in Prince Rupert. The hope of the citizens of Prince Rupert and Port Edward is that whoever the City eventually sell the site to it will provide some long-term, well paid permanent jobs. The old Pulp Mill employed 650 people in its prime and whilst it is probably overly optimistic to assume that that many jobs will be created by whatever new enterprise buys the site, the fact that six bids have been received surely bodes well for future employment.
The City of Prince Rupert is still poring over the respective bids and are 100% leak free on who the bidders are.
The interest in this sale is not restricted to the citizens of Prince Rupert and Port Edward. Speculative purchases of property which have dried up in the last two years are beginning to pick up again as investors realise that in order to achieve the best return on investment they have to buy on the rumour and sell on the news.
With the Watson Island Pulp Mill sale in the pipeline and continued optimism surrounding the potential investment in Prince Rupert by Canpotex, what other companies that we have not heard about are in the background waiting to take advantage of all the geographical advantages that Prince Rupert has to offer?
Details of the bidders are a closely guarded secret although Lax Kw'alaams Band has made their involvement public knowledge.
The site, one of the few deep water harbourages in North America with direct docking access to land plus a railway line going into the middle of the site, is situated 15 highway kilometres from the new port development in Prince Rupert. The hope of the citizens of Prince Rupert and Port Edward is that whoever the City eventually sell the site to it will provide some long-term, well paid permanent jobs. The old Pulp Mill employed 650 people in its prime and whilst it is probably overly optimistic to assume that that many jobs will be created by whatever new enterprise buys the site, the fact that six bids have been received surely bodes well for future employment.
The City of Prince Rupert is still poring over the respective bids and are 100% leak free on who the bidders are.
The interest in this sale is not restricted to the citizens of Prince Rupert and Port Edward. Speculative purchases of property which have dried up in the last two years are beginning to pick up again as investors realise that in order to achieve the best return on investment they have to buy on the rumour and sell on the news.
With the Watson Island Pulp Mill sale in the pipeline and continued optimism surrounding the potential investment in Prince Rupert by Canpotex, what other companies that we have not heard about are in the background waiting to take advantage of all the geographical advantages that Prince Rupert has to offer?
Tuesday, February 2, 2010
2009 real estate statistics for Northern BC
Residential Activity
Resale housing activity in the area served by the BC Northern Real Estate Board posted the first increase in sales in 10 quarters in the fourth quarter of 2009.
Home sales numbered 852 units in the fourth quarter, jumping 33 per cent from year-ago levels. This is the largest increase in more than five years, and is a result of strong gains in all three months of the quarter, particularly the 65 per cent increase in December.
Seasonally adjusted activity was up 15 per cent on a quarterly basis (seasonal adjustment removes normal seasonal fluctuations). Building on two consecutive increases, seasonally adjusted activity now stands 51 per cent above the low from the beginning of the year.
Annual home sales activity declined 10 per cent from 2008, numbering 3,618 units.
Active listings declined year-over-year in the fourth quarter. Combined with a sharp rebound in sales activity, this resulted in a tighter market for single detached homes compared to the fourth quarter of 2008.
With a tighter market in almost all areas served by the BC Northern Real Estate Board, homebuyers took less time to shop.
The median sale price for single detached homes was $230,000 in the fourth quarter of 2009, four per cent above year-ago levels. This is the highest median price for the fourth quarter period.
Median sale prices rose on a year-over-year basis in Prince George, Fort St. John, 100 Mile House, Williams Lake, and Smithers, and were down from year-ago levels in all other areas. The median sale price remains highest in Fort St. John.
In Prince Rupert the median sale price of a residential house in Qtr 4 2009 was $163,000, down from Qtr 4 2008's figure of $176,750. The consensus of opinion is that the bottom of the market has now been reached and that this years buying season will see a return to a balanced market from a buyer's market.
Resale housing activity in the area served by the BC Northern Real Estate Board posted the first increase in sales in 10 quarters in the fourth quarter of 2009.
Home sales numbered 852 units in the fourth quarter, jumping 33 per cent from year-ago levels. This is the largest increase in more than five years, and is a result of strong gains in all three months of the quarter, particularly the 65 per cent increase in December.
Seasonally adjusted activity was up 15 per cent on a quarterly basis (seasonal adjustment removes normal seasonal fluctuations). Building on two consecutive increases, seasonally adjusted activity now stands 51 per cent above the low from the beginning of the year.
Annual home sales activity declined 10 per cent from 2008, numbering 3,618 units.
Active listings declined year-over-year in the fourth quarter. Combined with a sharp rebound in sales activity, this resulted in a tighter market for single detached homes compared to the fourth quarter of 2008.
With a tighter market in almost all areas served by the BC Northern Real Estate Board, homebuyers took less time to shop.
The median sale price for single detached homes was $230,000 in the fourth quarter of 2009, four per cent above year-ago levels. This is the highest median price for the fourth quarter period.
Median sale prices rose on a year-over-year basis in Prince George, Fort St. John, 100 Mile House, Williams Lake, and Smithers, and were down from year-ago levels in all other areas. The median sale price remains highest in Fort St. John.
In Prince Rupert the median sale price of a residential house in Qtr 4 2009 was $163,000, down from Qtr 4 2008's figure of $176,750. The consensus of opinion is that the bottom of the market has now been reached and that this years buying season will see a return to a balanced market from a buyer's market.
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