An oat groating plant will be built near Saskatoon as a result of Saskatchewan Wheat Pool’s decision to increase its investment in Can-Oat Milling.
The pool announced Dec. 23 it would invest an additional $14 million in the Portage la Prairie-based oat processor, bringing its ownership level to 34 percent.
“We hope to be consuming an amount approaching 200,000 tonnes of oats in Saskatoon and we are already consuming well over 100,000 in Portage, so that’s more than 300,000 tonnes. That’s a significant amount of oats,” said Mike Maschek, chief financial officer of Can-Oat in Portage.
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The $17.2-million plant, owned and managed by Can-Oat, will be attached to the pool’s Saskatoon North grain elevator. It will process the oats by removing hulls and heating the grain to stop enzyme activity that causes it to go rancid.
“It addresses simple economics, you process the oat close to where the raw material is produced and you make the finished product and package it closer to the end user,” Maschek said.
The facility is expected to create 35 jobs.
“Canada is the best place in the world to grow oats,” said Don Loewen, pool chief executive officer.
With U.S. acreage declining, there is an opportunity for Canada to build markets on its reputation as the least-cost, highest quality producer, he said.
Expansion planned
Although the plant will at first only prepare the grain for shipment to further processors, there are plans to expand its capabilities, Loewen said.
“As we build the business we’ll make oat flour … and maybe eventually it will be a rolling operation to make oat flakes,” he said.
Can-Oat is the largest processor and exporter of oats in Canada, sending about 95 percent of its production out of the country. Most goes to the United States but it is developing other markets.
“We have been successful in shipping a primary processed groat product into South America and southeast Asia,” Maschek said.
South American countries have some of the highest oat-consumption rates in the world, he said.
Sask Pool first invested in the company in August 1996. Can-Oat’s other owners include Manitoba Pool Elevators, Can-Oat Holdings, B.C. Ltd. and A.R. Holdings.
