Another prairie canola crusher is expanding.
Associated Proteins, the company that bought the mothballed Ste. Agathe, Man., crushing plant and reactivated it in 2005, is now completing the commissioning of its refining facilities. That will move production to 1,000 tonnes per day from 700 tonnes per day.
It also plans to expand production to 2,000 tonnes per day in the coming year and is keen to develop more processing facilities on the land around the plant, according to president Larry McNamara.
The refinery could open new markets.
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“It’ll allow us to move it into finished oil production and service the markets in mainly the U.S. for dressings and sauces, snack foods, potato blanching and bottled oil,” said McNamara.
The oil from Associated Proteins is different from bulk commercial canola oil because of the way it is processed.
Instead of a crushing system that uses the solvent hexane to help extract the oil from the meal, the plant employs a European double-press system that uses only mechanical means to separate the oil from the seed. The oil can be sold for a premium to processors and consumers who want solvent-free oil.
It’s a niche market, but one that McNamara said could absorb more oil than it now receives. Only 50 million pounds of expeller-pressed oil is now available to food processors, but once the Associated Proteins plant is expanded, it will be able to provide 285 million lb.
McNamara said he’s not worried about flooding the market.
“There’s no problem,” he said. The U.S. market consumes 16 billion lb. of soybean oil and this will be a drop in the vegetable oil bucket.
“There’s plenty of market there for us.”
McNamara thinks processors will produce more specialty products with the oil once they get their hands on it.
“For the specialty dressings, sauces and snack foods, they are highlighting that it’s now available in expeller-pressed oil. They will be expanding, hopefully, those markets now that they have this continuity of supply from Associated Proteins,” said McNamara.
The Ste. Agathe plant has in the past raised, then dashed hopes in the canola industry. The crushing plant was built in 1998, but never went into production because its owner ran into financial difficulties.
In late 2004, Associated Proteins obtained the plant and got it working. It built a refinery so it could sell refined oil, not just raw product.
As the company develops plans to boost production to 2,000 tonnes per day, it notes that many of its existing facilities can already handle that higher rate of production.
But the facility will have to add crushing machinery and build a second refinery. The company believes it can do that for less than $20 million.
McNamara said the boom in biodiesel use of canola is going to be good for his company, even though its high grade canola oil will avoid that market.
“With the shift of major players into biodiesel, it looks like there’s a shortage of food oil, and that’s what this company’s all about,” said McNamara.
“So it looks like there should be good market demand for this extra capacity to go to 2,000 tonnes.”
