Another large canola crushing facility is planned for Western Canada.
Clean Power Concepts Inc., a small Regina oilseed processing firm, has signed a memorandum of understanding (MOU) with a large Chinese grain company to build a 600,000 tonne food grade canola crushing plant.
The proposed plant would add to Canada’s rapidly expanding canola crushing industry.
In the last two years, Cargill added 750,000 tonnes of capacity to its plant near Clavet, Sask., while Richardson International built an 840,000 tonne facility and Louis Dreyfus opened an 850,000 tonne plant, both near Yorkton, Sask.
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Bunge has announced plans to add 500,000 tonnes of capacity to its plant near Altona, Man.
Michael Shenher, chief executive officer of Clean Power, said the proposed plant would likely be built in Saskatchewan or Alberta at a cost of $70 to $90 million.
This is his second attempt to build a large-scale canola crush plant.
In spring 2008, Shenher, who was then CEO of a company called Canadian Green Fuels, announced he would build a 460,000 tonne oilseed crushing facility and a 200 million litre biodiesel plant near McLean, Sask., just east of Regina.
The project fell apart by fall and the company announced it was delaying its planned $50 million share offering.
“Our financing sort of went away when the markets sort of evaporated there in September,” said Shenher.
The new deal stipulates that Clean Power and its Chinese business partner, Chongqing Grain Group Co., Ltd., should sign a binding agreement within 45 days of the Jan. 15 signing of the MOU.
Much of the feasibility work is already complete because of the previous project.
Shenher said the environmental assessment will take six months, followed by 18 months of construction. He figures the plant could be running by April 2014.
Clean Power operates a canola and camelina crush plant in Regina that is capable of producing 55,000 tonnes of oil annually.
The company manufactures feed products, environmental lubricants and nutraceuticals and can produce up to 20 million litres of biofuel and additives.
Chongqing Grain Group owns 51 subsidiaries and has 21,507 employees and assets of $920 million US. The group manufactures and sells Red Dragonfly cooking oil, Ren He rice and Ren Ji flour.
Shenher said the proposed plant will produce 250,000 tonnes of super degummed oil that will be shipped to China and further processed into table-ready, refined, bleached and deodorized oil.
The joint venture will be 90 percent owned by the Chongqing Grain Group and 10 percent by Clean Power. The Chinese firm will buy the oil and the Regina company will buy the meal produced by the facility.
Clean Power owns a patent on a process to produce a canola protein-based fish food. The plan is to export the product.
The canola crushing deal isn’t the only project the company has worked on this year:
• It signed a long-term agreement
Jan. 13 with K.N.D. Feeds Ltd. of a Bjorkdale, Sask., to provide it with 400 tonnes of oil and 600 tonnes of meal per month for the next five years. The deal is worth an estimated $7.4 million annually.
• A letter of intent with Chongqing Grain Group commits it to supply up to 3,000 tonnes per month of crude canola oil, a deal worth an estimated $40 million per year. The oil will be supplied through Clean Power’s inventories and third-party purchases.
• It signed a Feb. 3 letter of intent to buy Alabama Bio Energy LLC and its subsidiary Eagle Bio Diesel Inc., a 100 million litre multi-feedstock biodiesel plant in Bridgeport, Alabama.
