A flax processing plant will eventually re-open in Brandon, but it may take another couple months to get Shape Foods up and running, said owner Jim Downey.
“We’ve been busy with getting the plant ready to get back into production…. We’ve still got a considerable ways to go,” said Downey, a former provincial cabinet minister under Gary Filmon’s Conservative government in the 1990s.
When Downey bought Shape Foods this summer, he was hoping the crushing and oil bottling plant would be running by September. But he now believes they’ll be bottling flax oil by late 2009 or early 2010.
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Downey and three other investors purchased the assets of Shape Foods for $5.1 million, the winning bid in a receivership auction.
The previous owners of Shape Foods, which was founded in Burnaby, B.C., spent $1.7 million to build and equip a 6,300 sq. metre plant in Brandon that produced its first flax oil in December 2007.
When fully operational, the plant was capable of processing 20 tonnes of flax per day.
The company touted its new processing technology, which kept the flaxseed oil shelf-stable for one year, and it promoted the health benefits of the omega 3 fatty acids in flax oil.
But Shape Foods went into receivership in October 2008 when Vanguard Credit Union of Brandon called a $4.5 million loan, putting Shape’s 60 employees out of work.
Shape Foods’ previous owners put most of their marketing eggs in the U.S. basket, Downey said. The new enterprise will concentrate more on domestic sales.
“The initial plan (when Shape first opened) was to go into the high-end U.S. market,” said Downey. “We have some product and you’ll see a lot more of it shortly in the Manitoba market.”
The Canadian focus doesn’t mean the company will ignore international opportunities, said Downey, who added the recent controversy in Europe over GM flax shouldn’t affect Shape Foods’ sales.
“I’m not at all worried about our brand because of our quality control and the type of product we have,” he said.
Farmers have contacted Shape Foods to grow flax for the company, Downey said, but he’s not ready to contract acres just yet.
“At this point, until we get a little better handle on what the demand will be, we aren’t being overly aggressive (buying flax).”
TORONTO (Reuters) – Lower prices and volumes are slashing fertilizer manufacturer profits.
PotashCorp. reported Oct. 22 that profit fell 80 percent to $248.8 million in the three months ended Sept. 30 from $1.24 billion a year earlier.
Results in 2008 were extraordinary, up five fold from the previous year because of soaring fertilizer prices.
The company, the world’s largest producer of potash, still anticipates a rebound in demand for the crop nutrient in 2010, but it expects some of its production capacity will remain idle through the year.
“The uncertainty among fertilizer buyers has lasted far longer than we anticipated, but cannot continue indefinitely,” said chief executive officer Bill Doyle.
In 2008, the company produced 8.7 million tonnes of potash. It now expects 2009 potash shipments of three to 3.2 million tonnes.
Agrium Inc. said Oct. 23 it expects that third-quarter earnings, to be announced Nov. 4, will be 90 to 95 percent below those of the year-earlier period, sending its shares down 3.9 percent.
The Calgary-based company, which is locked in a lengthy battle to take over U.S. rival CF Industries, cited lower prices and margins for nitrogen, phosphate and potash as reasons for the slump.
Agrium also said it had agreed to sell part of its nitrogen fertilizer facility at Carsland, Alta., to rival Terra Industries in a bid to overcome regulatory issues related to its hostile takeover of CF. The proposed stake sale could also stymie CF’s own hostile bid for Terra.
Earlier in the month, Mosaic Co., owned by Cargill and IMC Global, reported a 91 percent drop in its financial first-quarter profit.
Fertilizer producers say the world’s farmers cannot indefinitely cut or delay fertilizer application because that would likely hurt yields.
Agrium said it is well positioned for an anticipated recovery in crop input demand in 2010.
“If the wet weather in the U.S. continues and shortens the fall (fertilizer) application season, it is expected to push fall nutrient demand into the spring of 2010,” the company said.
