As the Port of Prince Rupert’s cargo stats come out each month, Ridley Terminals’ traffic performance – in metallurgical and thermal coal, and petroleum coke has experienced a major decline in movement through the port.
As both coal prices and demand plunge in the world thanks to consumers like China, India and the Middle East being able to supply enough coal domestically to satisfy demand, so does Ridley Terminals’ performance.
But the feeling isn’t doom and gloom at the executive level.
Ridley (RTI) interim president and COO David Kirsop shed some light on the crown corporation’s plans for the coming months last week – and they include diversification in not only products being offered, but in potential markets and clients.
“We’ve got to diversify on probably several levels,” said Kirsop.
No sooner had Kirsop made the statement than a major announcement came from Ridley and AltaGas last Wednesday, Jan. 20, about the latter corporation subleasing land on Ridley Island from Ridley Terminals, to propose the construction of a propane export facility – the first of its kind on B.C.’s West Coast.
The terminal would ship 1.2 million tonnes of the product per year, sourced solely by B.C. and Alberta propane.
Before Ridley’s executive team made the decision to start diversifying (the company has a mandate from the federal government to act as much as a profitable commercial company as possible), RTI was actually expanding their coal shipping capacity on Ridley Island. However, those plans have been tabled.
“We’d be crazy to keep doing it in the face of the market in the next five or 10 years. So we have lots of capacity – we’ve put it on hold. We’re probably at about 18 million tonnes per year, give or take a few [tonnes]. If everything turned around and we were right up to where we were five years ago, we could expand that to 25 million tonnes within a year,” Kirsop said.
“We’re in a good place to hit the pause button and that’s what we’ve done.”
The president also responded to comments made by Skeena-Bulkley Valley MP Nathan Cullen, who mentioned in an online article that the hiring of Colin Metcalfe as vice-president of corporate affairs by the board of directors last August violated normal business practices as Metcalfe was a former political advisor to Conservative Industry Minister James Moore.
Kirsop said that in fact, Metcalfe’s position was a skill-set that needed to be reinforced. In early 2015, Metcalfe’s name was brought forward as RTI corporate secretary Bob Standerwick first made contact with him.
“Colin’s been around for awhile in provincial and federal circles and it certainly wasn’t as a result of what was happening federally that his name was mentioned, and so the board was aware and the board didn’t drive that process, but it would certainly endorse it,” said Kirsop.
“Colin was very aware of his position with James Moore and really wanted to make sure we didn’t do something that would be non-compliant with procedures, and so he made it clear at that time he would have to talk to the ethics commissioner ... It took awhile ... before Colin came on board, so it was the result of a strategic evaluation. It was meant to be a hire at the key executive level ... Whatever evolved, that was going to be one of the squares we had to fill,” said the president.
At one time, RTI was the shining example of a terminal that was supporting the Port of Prince Rupert, but that designation has now gone to DP World’s Fairview Container Terminal, which is expanding and looking to almost triple its cargo capacity in the next few years.
While Kirsop and the board of directors look for a permanent president in the next six to 12 months (Kirsop is a retired partner from Urban Systems Ltd. and had been on the board for the past six years at RTI), the president is making sure that the company is not only looking at new products, but also new clients and new places to conduct business.
“We’re not going to do crude, and we’re not going to do diluent. One of the things we want to make sure we do is have a good strategy, so it’s not just a case of who wants to ship product, but we want to make sure there’s a market out there because you’ll hear from two sides of the equation,” he explained.
“There’s those with the products they want to ship and for them, the world’s going to be rosy. But we’d like to hear from the people who are going to buy too ... Where can we find a niche in [the world market] that’s going to be less sensitive to the ups and downs of the commodity world, and that’s what we’re working on right now.”
Propane and AltaGas are the fruits of that search so far. Kirsop is making sure that any additional business that Ridley gets into makes sense from a practical standpoint – fitting into the established industrial base that the company has created on Ridley Island, and not disrupting existing conditions. AltaGas’ propane would be shipped into the proposed terminal by rail (CN) and that route goes right to the island.
“If you have multiple clients, it makes a difference too, because if you’re shipping to many countries, that helps level off the fluctuations that may occur in terms of currencies and demands and needs and political issues that might come up in different countries as well, so you need to diversify on both fronts. It’s not just the product – it’s the client,” said the president.
Ridley’s executive team will spend some time in Prince Rupert where the terminal is located, but in order to fully service their clients, Kirsop and company will be spending a considerable amount of time in the Lower Mainland, and specifically in Vancouver, thanks to a rival that’s far too accessible for some of RTI’s clients.
“One of the things the board felt would be to the benefit of RTI and Prince Rupert and Canada is to have an executive management team that was based in B.C. ... I think to [find different markets and different suppliers], they’re going to have to spend a fair bit of time in Vancouver. If you want to grow your company, you have to be there for your client ... and our clients are going to land at YVR, that’s the reality of it. I can’t change that, and that means they’re landing at the doorstep of Vancouver Port Corporation ... So we need to make sure we can intercept them before they reach that point,” said Kirsop.