Belledune Port Authority
The community of Belledune, with a population of just fewer than 2,000 in the northern part of New Brunswick, underwent unprecedented development during the late 1960s. A critical component of that enterprise development focused on the shipping industry, which has continued to yield the backbone of the region’s economic base for more than half a century.
The Port of Belledune is a deep-water port that came into existence in 1968 with year-round cargo handling capacity. It was built in support of several business industries, the largest of which was the vast mining sector within the region. Noranda operated one of the most prodigious ore deposits in the world for about 50 years and a smelter was constructed to process the material.
The Canadian Business Journal recently spoke with Belledune Port Authority President & CEO Denis Caron and Donald Roy, President, Eastern Division at QSL, about the impressive growth the port has achieved and continues to enjoy to this day.
QSL is a world-class stevedoring network extending throughout Eastern Canada and the heartland of North America. The company offers its clientele an extensive array of logistical services for the unloading, storage and reloading of cargo from ships, trucks and railcars with solutions that are tailor-made for each client’s requirements.
In 2000, the Belledune Port Authority (BPA) was formed to take over all operations at the Port of Belledune and it thus became part of the 18-member Canadian Port Authority. Until then, the port had been managed by Transport Canada, a federal department in Ottawa and as a result decisions for port activities were determined in the nation’s capital.
“We celebrated 50 years in 2018 but the smelter next door celebrated 51 years and they’ve been a great partner along the way,” begins Caron.
According to the latest figures, the Port of Belledune provides 771 direct jobs, 558 indirect and 634 induced positions in the region. That’s just fewer than 2,000 jobs supported in some manner by the port, which is even more impressive when factoring in that the entire community of Belledune’s population is roughly that same figure.
The region has held a rich tradition of mining and pulp and paper throughout the years, but those traditionally strong industries have been hit by hard economic times and as a result the port is the region’s largest individual employer.
“It’s been a challenge but for us 2018 was our best year ever,” confirms Caron. “We believe it goes to show that even though our port is located in a small region, the possibilities for business opportunities are boundless. With creative minds, adaptability, and hard work from the valued employees and partners, we can continue to build on our connection to the world.”
In 2018, a total of 2.994 million metric tonnes of cargo passed through the port, up from 2.43 million in 2017 and as such revenues and bottom-line figures have grown. For the past several years in particular, Caron and his team have focused on acquiring new bulk product.
“We’re not into containers,” he states emphatically. “It’s products that will be shipped to markets all over the world and we receive products from different markets as well. We’re up to 24 different types of products that we handle here at the port.”
Diversification
Over the past 19 years the BPA has been aggressively seeking new, innovative methods for expanding operations as a means of maximizing competitive supply chain advantages. The port is surrounded by a number of key players that help in the economic development of the region. Last year New Brunswick Power celebrated its 25th anniversary and the 20th anniversary of QSL’s activities in Belledune.
“In 1995 there were two terminals here in Belledune and a year later they built a third terminal. In 2007 we signed another agreement with QSL to operate Terminal Four and it was built in 2010,” says Roy. “QSL has been a great partner with the Belledune Port Authority since 1996.”
The ability to make day-to-day operational decisions locally has provided many benefits over the past two decades. However, Caron points out there are still a plethora of governmental procedural rules that must be followed.
“It’s a local board comprised of seven people: five are appointed by the federal government; one from the provincial government; and one from local government,” he explains.
The local board and administration provides much more flexibility and enhances efficiencies that would likely become bogged down in bureaucratic processes in Ottawa. Typically the board members have terms of three years with a limit of three terms.
“We are not completely autonomous but we have a lot more autonomy than we did previously,” continues Caron.
With members living and working in the regional community the board has been much more in-tune with what is happening locally and using the port as an economic development tool to accelerate the pace of expediting processes. Caron points to a targeted primary focus on five core areas: forestry; mining & minerals, agriculture, energy and modular products.
“The representatives that we have also represent industry. So, for instance, in this area because of the forestry side or whether it’s trucking, etc., we always try to have representation on our board that mirrors the industry in order to best support it,” he says. “That targeted focus allows us to aggressively go after opportunities that we think exist.”
Strategic Partnerships
A key milestone for the Port of Belledune was realized with the development of the M.D. Young Terminal Three. Caron is quick to point out that Donald Roy and his team at QSL should take the lion’s share of the credit for its success.
“There have been a couple of notable infrastructure improvements that have been made. If we look at the growth occurring at the port most of it is happening on Terminal Three. It speaks well to the partnership we have with QSL,” he says.
In 2013 there was about 220,000 tonnes of material on Terminal Three and in 2018 that figure had ballooned to almost 900,000 tonnes. Much of it has to do with the strong partnership that has been developed.
“Our role is to make sure that we provide the best facilities and efficiencies we can in order to make Donald (Roy) and his company much more competitive,” continues Caron.
A fully matured, all-encompassing transportation network is another factor that makes the overall efficiencies exceptionally robust. In addition to the port facilities, the land and rail systems are considered top-notch.
“We’re tied in with the national transportation system with CN Rail. It operates two lines through New Brunswick two lines – the northern line, which we are on and the other line which cuts right through Quebec,” says Caron.
One significant challenge has been the decline in mining and pulp & paper and because of that CN lost a lot of traffic on the northern line. The port and its partners continue to work hard in an effort to generate new traffic with different products that could either be transported by train or larger-type vessels and then use the rail system to export the material to its various destinations.
“We’re looking at some trans-shipment opportunities into the Great Lakes area because they are closed in the winter but they do have product go in and out by rail. Some of the product heads south to Philadelphia so we’d like to be the Port of Call for some of that work,” says Caron. “On a per-capita basis we probably have the best highways in all of Canada so we’re blessed in that regard.”
The Port of Belledune exports a considerable amount of wood pellets to the United Kingdom. As of July, 2019 there will be three producers shipping out of the port to markets overseas. Caron is hoping to bring in more of those wood pellets from Ontario and/or Quebec by rail and subsequently ship them out by vessel.
“We also have a lot of peat moss in this area and are looking at combined shipments. CN has been very interested in working with us on those types of projects as well,” he adds.
Improving efficiencies and seeking out new and innovative methods is always front of mind for the Port of Belledune. As an example, there is currently a project submitted to the federal government to fill a water-lot between Terminal Three and Terminal Four to lessen the handling involved, which can be – and often is – very time consuming.
“There is an open space that prevents us from utilizing the portable conveyor systems that QSL operates with. That’s a $21 million investment, but by filling in that water-lot and extending the laydown area it creates an opportunity for both of us,” explains Caron.
“The drainage system that is in place, it’s a new technology that was put in when we built the terminal in 1995. One hundred per cent of the water is controlled by it and it has a strong positive environmental impact on every customer contract,” says Roy.
“We just bought portable conveyors with new technology and there are only three of them in Canada. The technology is used for vessel loading. We are proactive in getting the latest technology in our industry, which is essential for staying ahead of the competition,” continues Roy.
The expansive port system covers about 100 acres in total, including 60 acres at Terminal Three – with an eye to expanding it by another 20 acres. Terminal Four is 30 acres, with no laydown area at Terminal One and Terminal Two.
“The beauty of Belledune – and what will separate us – is that the port owns another 1,600 acres of land adjacent to the port – so there is loads of room for expansion. Most other ports in Canada are in more urban areas and have no possibility of physical expansion,” Caron points out.
“We have no less than three major projects we’re working on that would almost triple our volume of today,” he continues. “We’re starting to see that upward trend occur. Because we are smaller and nimble we can react a lot quicker on projects such as this.”
Another outstanding accolade for the Port of Belledune is that it is the only port in Canada to currently have a protocol agreement with First Nations. Regardless of the type of infrastructure development in Canada, whether it’s a pipeline, highway extension or any other type of project, the First Nations must be consulted for their input. Rather than do it piecemeal, Caron and his team set out almost three years ago to work with the First Nations communities in the region to ensure that any potential projects coming to the port would be known well in advance so that discussions and consultations could take place with stakeholders.
“It’s something all ports and communities are looking to achieve, and we are at the front end of the curve,” says Caron. “We’ve got a $35 million expansion plan for infrastructure and we’re hoping to finalize the financing on that with both levels of government.”
Looking to the Future
The Port of Belledune currently has 12 commercial projects on the docket in each of the five sectors and Caron expects to see nearly 12 million extra tonnes of materials coming in and out of the port in conjunction with those projects, which will undoubtedly generate increased economic activity.
“We are forecasting close to 4,000 direct and indirect jobs out of those 12 projects,” he says.
Because of the coal-fired power station operated by New Brunswick Power next door to the port and due to federal regulations coming in play, by the year 2030 the coal plant is mandated to either significantly reduce or completely eliminate its consumption of coal as an operating source. Ultimately, the port is looking into other fuel source options while working closely with New Brunswick Power on this critical matter.
“They have some assets such as conveyor systems that we could integrate into our operation. They are open to looking into that,” states Caron.
The good news is that there is still an 11-year window to find an alternate solution or increase activity at the port. As a means of providing assistance, the federal government has set aside transitional funding for the next four to five years. The port is attempting to capitalize on that by allocating resources towards giving a boost to some of its business development plans.
“It’s always concerning to think you may lose this in just over a decade, but unlike the pulp & paper industry or the mining sector, we have time to prepare ourselves prior to the closure of those coal-based operations,” replies Caron.
In the midst of reaching its business objectives and meeting bottom-line numbers, the Port of Belledune is also widely recognized as an excellent corporate citizen within the community. An internal policy was created and unveiled about a decade ago regarding a process for giving back to the community and it was set at 5% of net earnings. Last year that figure came in at roughly $140,000. The year 2018 also marked a major milestone because the Port of Belledune had cumulatively reached $1 million in donations. The hospital foundation has also benefited greatly thanks to the generosity of sizable donations made to it by the Belledune Port Authority.
“We even bought a 15-passenger van to do tours and I was actually driving a bunch of curlers recently while they were playing in a tournament,” chuckles Caron. “We volunteer to drive people around for different events and we’re part of the community. Although the port is a federal asset that we manage, it belongs to everybody here in the region. We want people to understand who we are and what we do. We want people to visit the region. It’s important to be good corporate citizens.”
In examining figures relating to return on revenue, the Port of Belledune ranks number one out of the four Atlantic region ports – Halifax, Nova Scotia, St. John, New Brunswick and St. John’s, Newfoundland and ranks number three out of 18 ports across the country. Last year saw a 33% return on revenue, meaning for every dollar generated there was 33 cents in profit.
For Caron and his executive team it’s about wanting to completely turn the corner and become an outstanding, economically robust port not only for the region but for the entire province for many years to come. New Brunswick is dependent on transfer payments and the new provincial government is looking to turn the corner on that – and Caron is taking aim to parallel that with the port through hard work and the continued development of vital alliances, such as the one with QSL.
“We have a strong strategic partnership with the port,” says Roy. “There are many promising opportunities on the horizon.”
The port has incredible potential opportunities to develop a growing business thanks to a dedicated staff, excellent location, available land and many developed partnerships in conjunction with the outstanding professional services that are provided.
“We’re not in the container business and for good reason. There are golden opportunities in the bulk business and we want to be the best on the east coast when it comes to serving clients,” envisions Caron. “Our organic growth is expanding at a rate of about 20% per year and we’d like to be able to continue that. Over the next 15 to 20 years our aspiration is to expand upon our operation and be the best bulk business if not just the east coast, perhaps all of Canada.”
