By Sierra D’Souza Butts, Local Journalism Initiative Reporter, The World-Spectator
August 12, 2023
After eight years of organizing and developing the 12 acre greenhouse in Dauphin—the first greenhouse of its size on the Prairies—Vermillion Growers was proud to see their vision come to light.
The company held the grand opening for the facility on July 27, and had over 200 people in attendance.
“I think the grand opening exceeded all expectations from our entire team,” said Maria Deschauer, managing director of Vermillion Growers.
“We just loved opening it up to our community of investors, as well as suppliers, and interested parties, and economic development of course.
“We’re just ecstatic that we’re at this point, and that the energy is high. Everyone was moving like crazy to make sure the facility was ready, and we’re ready to accept plans for September 4. We’re very excited.”
The greenhouse will produce 10 million pounds of tomatoes within the next year.
The idea for building a greenhouse in the rural community of Dauphin started with Deschauer’s brother, who is also the founder of Vermillion Growers, Lucky Deschauer.
“Lucky’s always been passionate about food production and greenhouse design ever since he was actually quite young,” said Deschauer.
“About eight years ago he presented the idea that maybe this is something we want to consider for Dauphin and for Manitoba, to bring our central Canada a little bit more in tune with the rest of the world. In terms of local food production with controlled environment growing.
“Lucky was really the visionary on it, but of course beyond the visionary you need the other key players. He convinced the rest of the team to jump on board, which initially was Mark Kohan, our CFO, and myself.
“We ended up doing research, initially starting in Manitoba, having to branch out a bit further leaning into the Ontario area, and branched out a little bit further into the Netherlands to ensure that we were deciding on the right structure and the right designs for our facility here in Dauphin.”
All of the equipment used to construct and install the greenhouse came from the Netherlands.
Deschauer said the greenhouse was initially planned to be much smaller than its current size.
“The original plan, I think, was for two acres and then as we started engaging with different consultants we realized that for the amount of infrastructure we needed to put in place, two acres is too small. It’s not financially viable,” said Deschauer.
“We found that 10 acres is just on the verge of making sense. Our goal now is to have 70 acres on this site.
“This first 10 acres is a great start, and we can envision now how we can expand the site out to 70 acres over the next few years.”
Plans to expand greenhouse to 70 acres soon
With plans to expand the greenhouse up to 70 acres, Deschauer said Vermillion Growers will be able to employ around 200 full-time employees.
“Next year we’re going to add five acres, so maybe in four years we’re hoping to be at that point of 70 acres,” said Deschauer.
“Everything needs to be working well, and of course we need to start working with other members of the Dauphin community to ensure that there’s housing.
“All of the different infrastructure needs are very important as we expand to support our employees, and housing will be a big one.”
She was asked if housing employees will be a challenge in the future.
“As we expand we’ll be able to leverage our existing building expansion financially,” said Deschauer.
“Of course we will actually have to recruit employees, so employee retention could be a challenge and beyond that, employee housing.
“We’re hoping that more houses and more apartments will be built in Dauphin. We’re working in trying to improve that gap as well.”
One of the biggest challenges for developing the facility was funding the project, said Deschauer.
“The capital expenditure is quite large for this kind of facility. That’s been on the largest hurdles to pass to get this facility up and running,” she said.
“The other hurdles are location, there aren’t very many greenhouse builders in Manitoba or central Canada anywhere. Just to get on the list to get someone to come out and actually build this facility, and produce this facility, was also a challenge.”
The total investment towards the development and equipment of the site was just under $40 million.
“We anticipated this project would be about $32 million. We’re probably pushing about $36 to $37 million at the moment, and that’s just for the building and the infrastructure,” Deschauer said.
“Then of course for the equipment inside, it was another few million dollars on top of that. Rough figure for everything, alterations and everything that we needed was probably closer to $40 million for this project.”
Deschauer said having investors, applying for grants, and local businesses being involved helped contribute to the project.
“We had private funding, we also had traditional bank financing. We partnered with the Bank of Montreal who stepped up and wanted to be a part of this project,” she said.
“They are quite huge in the Ag industry and also in the greenhouse world. They are a perfect fit for us.
“Of course we have founders money here. We also have investment money from the community members. Through the province of Manitoba, the provincial government offers a small business capital program and that allows Vermillion Growers to offer shares within our company that the province would then provide our investors with a 45 per cent tax credit, meaning that if someone invests $100,000, the province would provide them with a tax credit of $45,000 to go against paid or payable.”
Deschauer said Manitoba’s Small Business Venture Capital Tax Credit (SBVCTC) program made a huge difference for helping Vermillion Growers secure local investment.
“Right now we’re probably close to $3.7 million of what we raised through private investors,” she said.
“The Manitoba tax credit was a huge advantage for people jumping on board because they knew it reduced the amount of their money at risk because more than likely they’ll end up getting that 45 per cent back right away.”
Next steps for selling produce, and expanding
With produce expected to start growing by fall, Vermillion Growers said they have already lined up their distributors.
“All of our product is being purchased by Red Sun Farms. They are a large distributor out of the Kingsville, Ontario area,” said Deschauer.
“All of our supply chains are secured through them. We expect to see our product in local Superstores, as well as Co-op stores under the brand of Red Sun Farms grown in Manitoba by Vermillion Growers.”
Deschauer said she cannot wait to walk into a store and see her own product on the shelves.
“I’m sure all of us are going to have our phones out taking pictures and sending it to our friends and family,” she said smiling.
She spoke about what is in the future for Vermillion Growers.
“Next summer we’re hoping to add another five acres, but we are also very committed to this industry now,” Deschauer said.
“The world of agriculture is so important, and controlled Ag would just be a future in that for our court team.
“Once we are done developing the Dauphin site we will be looking at potentially expanding to other places as well, but we don’t want to jump the gun.
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“We have to get this facility up and running first, then we’ll start looking around.”