Strawboard plant sees brighter days ahead

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Reading Time: 3 minutes

Published: July 4, 2002

The Dow BioProducts fibreboard plant has a problem that it’s happy with

– it can’t meet all the demand for its products.

That means that even though there’s a stockpile of baled wheat straw

lying in long rows outside the Elie, Man., plant, the company will buy

the same amount of straw from farmers this harvest as last fall.

“The last thing we want is to run out of straw,” said Brad Money,

president and general manager of Dow BioProducts.

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Since last fall the Elie plant has used about half of the 190,000 bales

of wheat straw it bought at harvest.

Money said production has been lower than expected, but it will soon

rise because the company has been tweaking the plant, trying to make it

run more efficiently.

The straw-based fibreboard competes with building products such as

particleboard, medium density fibreboard and plywood.

Ever since the plant was built in 1998, engineering problems have

hobbled production. Those problems are slowly being solved, said Wayne

Karolat, vice-president of manufacturing.

Until now, it has been running 24 hours a day with three shifts, but

taking entire weeks off so engineering problems can be sorted out.

Soon, a fourth shift will be added and it will continuously run 24

hours per day.

But the plant is still not running at full capacity, Karolat said. That

will demand more work.

“We still haven’t found what the maximum production will be,” said

Karolat.

Bill Ridgeway, president of the Straw Producers Co-operative of

Manitoba, said farmers in the area are glad to have found a reliable

partner in Dow.

“It’s a relief after the first organization,” said Ridgeway.

“I believe we’ll be able to have a long-term relationship with them.”

In 2000, the original owner, Isobord, was offering to buy straw at

$8.30 a tonne. Ridgeway said his co-op is finalizing a new agreement

with Dow and cannot say what this year’s price will be. Until now the

co-op has had an exclusive right to supply the straw, Ridgeway said.

The Elie plant has had a tortured history.

It began life in 1998 as an Isobord Enterprises Inc. project financed

by venture capitalists, the Manitoba government, Farm Credit Canada and

commercial banks.

Though the company spoke optimistically of building other plants, it

quickly ran into production problems, which it blamed for not allowing

it to take advantage of a good market. The plant was running at only 65

percent capacity. Isobord sued the engineers who designed the plant.

Isobord was placed into bankruptcy protection in late 2000 and went

into receivership soon after. Farmers who were owed about $1 million

for straw they had sold to Isobord had little prospect of getting any

money. They also worried about losing a good market for a waste product

many used to burn.

The operation was saved when Dow announced it was buying the plant in

May 2001.

Money said many producers may be skeptical about the worthiness of the

Elie enterprise after all its problems, but the idea behind wheat straw

fibreboard is sound and the product is proving to be a good seller.

Customers like the product, which is marketed under the Woodstalk

brand, Money said. In some cases it can also be used in place of

oriented strandboard and plywood.

The plant can’t produce enough fibreboard now to meet the demand from

its distributors, which include Home Depot in Canada and the United

States and McDiarmid Lumber in Canada.

“We’re in a little bit of an oversold position,” said Money. “We’re

trying to catch up with our order book.”

Dow hasn’t tried to force extra production, though.

“We wanted to make sure we were getting quality and consistency,” said

Money.

The plant’s fibreboard had “reputation issues” when it was produced by

Isobord that had to be eliminated before the company could focus on

volume, Money said.

“We spent the last year getting our house in order,” he said.

The company is sponsoring the Winnipeg-based home improvement

television program The Router Workshop for its next season on the

American PBS network. In exchange, the father and son team Bob and Rick

Rosendahl, who appear in the show, will use Elie fibreboard in some

episodes.

The company has also tried to build good relationships with the farmers

who sell straw to the plant. Karolat said many farmers were unsettled

by the Isobord bankruptcy, but feel more confidant now that a big

company like Dow is running the plant.

“A guy drove up this morning asking if we’d be buying straw this

harvest,” said Karolat.

Some of the rows of straw bales in front of the plant, right beside the

Trans-Canada Highway, are a mess. The aging straw has turned brown and

some rows are collapsing into confused piles. Local residents have

complained that the straw has created the world’s best rat habitat.

Money said the old and rotting straw was left by the Isobord

bankruptcy. Some is still part of the assets of the bankrupt company.

The rest is on Dow land.

Money said his company plans to get rid of it, but has to do it

carefully because of the amount.

The company is working with the Manitoba environment department to find

a safe way to dispose of it. Money said his company has hired a number

of exterminators to control the rats.

About the author

Ed White

Ed White

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