A flaxseed plant that was destroyed by fire in Angusville last March will not be rebuilt in Manitoba.
Glanbia Nutritionals Ingredient Technologies announced Tuesday that it will instead build a new 40,000 square-foot facility in Sioux Falls, S.D.
"After years in Angusville, this was a very difficult decision, given our longstanding relationship with the community," Glanbia Nutritionals president and CEO Jerry O’Dea said in a statement.
"We spoke to our employees (Tuesday) and will look to retain as many as we can through an offer of relocation to Sioux Falls. For those unable to relocate, severance packages will be offered."
In 2007, Glanbia purchased the former Pizzey’s Milling, located about 145 kilometres northwest of Brandon. It burned to the ground last winter. The blaze was later determined to be the result of flax meal overheating in a pasteurizing unit, which caused an estimated $7 million in damages.
More than 50 people were put out of work. Following the fire, Glanbia committed to paying the 58 employees of the plant for a time, but then downsized to 22 employees working out of the office.
Located in the RM of Silver Creek, which has a population between 400 and 500 people, the plant was a major economic driver, supplying good paying jobs in the area.
Residents in the region were hopeful that the company would rebuild near Angusville.
"It’s very disappointing, and it’s not going to be just the Angusville community that’s going to see the loss," said Riding Mountain Progressive Conservative MLA Leanne Rowat. "We have people that work at that facility from communities like Rossburn, Shoal Lake, Russell, Binscarth … the whole region is going to be hit."
The new South Dakota facility is expected to begin operations in July 2013.
"It’s going be a real tough Christmas for families who are going to have to either look at relocating to find employment similar or relative to what they were doing at Glanbia," Rowat said. "Others may have to leave the region or look for something else."
Rowat said she is "disappointed in the province."
"I know that the incentives for the States … are leaps and bounds over anything that Manitoba … would consider," she said. "I’m questioning whether Manitoba even made it to the table. I know the municipalities, not only Silver Creek, but others had put forward incentives to try and encourage them to rebuild in the area."
Rowat said losing another plant is just another hit to rural Manitoba.
"We’ve lost other plants to Saskatchewan and now we’re losing this one to the United States," she said.
"There didn’t seem to be a lot of work coming out of the NDP government in Winnipeg to the community and encouraging them to push for it."
A spokesperson on behalf of Agriculture Minister Ron Kostyshyn said they are disappointed to see Glanbia leave Manitoba, but are pleased to hear it remains committed to sourcing flaxseed from Manitoba farmers.
According to the province, Kostyshyn met with the company’s president, the local plant manager and officials after the fire last March.
Over the last number of months, the province worked with them to try to re-establish a plant in Manitoba with support and existing programs offered by the province, such as assistance through the Manitoba Investment Tax Credit and the Manitoba Industrial Opportunities Program.
According to Glanbia spokesperson Eric Borchardt, the company looked at a number of potential locations.
Sioux Falls was ultimately selected primarily due to its "proximity to the flax-growing regions, favourable highway and rail systems with reasonable transportation costs, convenience to customers and suppliers as well as the strong support of state and local elected officials and economic development leaders."
The Sioux Falls facility will produce whole and milled flaxseed ingredients as well as other seed and grain products for the food, beverage, supplement and animal nutrition industries.
Glanbia will continue to source flaxseed from Saskatchewan, Manitoba and northern U.S. states.