San Group, Port Alberni Port Authority announce multi-million-dollar shipping deal
This story is part of our Progress 2021 publication. You can read the special edition in its entirety on our website.
For the first time since 2017, the Port Alberni Port Authority expects to see lumber ship out of the city’s deep sea port.
The port and Langley-based forestry company San Group announced at the beginning of June a multi-million-dollar agreement whereby San Group will ship lumber products from Berth 3 and lease a portion of land and warehouse space as well.
As one of British Columbia’s largest value-added wood product manufacturers, San will invest between $50 and $60 million into shipping operations of its finished products.
READ MORE: San Group will invest $100M in four forestry-based projects in Port Alberni
“The agreement with the port is a major piece of our model to grow our value-added forest products business to maintain our leading status in B.C.,” said Kamal Sanghera, who owns San Group with his brother Suki. “Our commitment to operate and invest in Berth 3 will help us create logistics synergies that benefit our business and also provide efficiencies for all shippers,” he said.
He estimated San Group’s shipping activities will create at least 30 new skilled “high-paying” jobs, although he didn’t elaborate on what type of jobs would become available. The port investment was one of several totalling $100 million that San announced on June 2, 2021.
“We have worked at this agreement for a number of years,” PAPA president and CEO Zoran Knezevic said. “Kamal and Suki (Sanghera) expressed such a strong passion to revitalize Port to bring it to its heydays when they were shipping a lot of lumber from this dock.
“It’s our dream as well too to realize that. It’s quite a successful story. We are extremely happy they are going to be an integral part of our port operation.”
The agreement comprises a long-term lease to operate 17 acres of terminal space and 600 feet of berthing space along with warehouses and buildings. Facility and equipment upgrades will include storage silos and dockside cranes. The port authority will support the operational transition over the next year, Knezevic said.
Berth 3 is primarily used for exporting raw logs, and now it will be used for exporting lumber, Knezevic said. “We had lumber before, not to such the volumes we had previously, in the ’70s and ’80s. With San Group’s plans to move a lot of lumber it’s going to become a vibrant port one day again. Not just for lumber: they are talking about shipping other products, like biomass they’re creating” as well as other commodities as their business expands.
While COVID-19 saw a serious dent in shipping at all ports in 2020, 13 ships have already visited Port Alberni and loaded nearly 295,000 metric tonnes of raw logs for export. Knezevic said with San Group’s agreement the port will be very busy.
“It’s using the existing facilities to its maximum capacity.”
He estimates San Group will start moving product through the port “relatively soon.”
“Probably within three to six months we will see product being moved through our port again.”
Berth 1 and 2 are older and already in use by the Raw Spirit factory fishing vessels, as well as the project for the floating dry dock. The port authority also has a partnership with Canadian Maritime Engineering to use a warehouse and berth space for some of its larger shipping projects. The Western Canada Marine Response Corporation recently finished building its warehouse on PAPA lands, and Thunderbird Spirit Water Bottling Facility is nearing completion.
“Essentially, we’ll be at capacity after this,” Knezevic said.
The agreement with San Group is only one large-scale port project that will benefit the community. The port authority is still pursuing a multi-million-dollar floating dry dock facility for the Alberni Inlet. The port partnered with Canadian Maritime Engineering and the Floating Dry Dock Community Committee to pursue grant support for the project.
READ MORE: Province puts up $50,000 for Port Alberni floating dry dock study
A 2018 study concluded a floating dry dock would present a “significant market opportunity” if this infrastructure is built. The ambitious $69 million plan could provide $374 million in labour income over its lifespan, and contribute $1.2 billion in total economic output.
A training program between North Island College, CME and Nuu-chah-nulth Tribal Council could create at least 55 Indigenous apprenticeships over the first three years if the project comes to fruition. The training program is targeted to include at least 25 percent female participation.
The floating dry dock would create almost 70 jobs in the first year of operations if projections hold.
“The market need for a floating dry dock in Port Alberni is clearly identified, diverse, sizeable and expanding,” Knezevic said in October 2020. “With knowledgeable industry leadership and a collaborative community to approach…Port Alberni would become a west coast centre for marine excellence.”