Great Plains MDF says it is determining whether producers are willing to sell it enough straw for its fibreboard project
Grain growers in central Alberta could soon be earning more money for each acre of wheat they produce.
Brian McLeod, president of Great Plains MDF, said his company expects to sign wheat straw contracts with central Alberta producers as early as next year.
Great Plains is planning construction of an $800 million production facility that makes medium density fibreboard (MDF) construction panels out of wheat straw.
Straw will be contracted from local growers beginning in 2022 with contracting opportunities to be expanded the following year as the company’s proposed plant begins producing its first panels early in 2023, McLeod said.
“One of the big questions for the (project) of course is confirming that there’s enough farmers willing to sell us enough straw for the long-term to run our mill,” McLeod said.
We’ve come out with a survey talking to farmers in the Knee Hill County area (southeast of Red Deer) about selling us their wheat straw.”
“Normally, we’d prefer to sit down face-to-face with farmers and talk to them, but COVID has prevented that, so instead we’ve sent them a survey and we’ve posted the survey on our website where they can take a look and tell us if they’re interested.”
MDF is a manufactured construction material commonly used to build office furniture, cabinets, door panels and flooring products.
It has traditionally been made from wood fibres but Great Plains says its straw-based panels offer similar quality and strength, but can be produced at a lower density than wood-based panels.
Because of their lower density, Great Plains’ products will be lighter and less expensive to transport.
For customers, the lower density panels will be easier to work with due to lower tooling costs.
Great Plains is in the final stages of determining the location of its proposed production facility.
McLeod said three potential locations have been identified. A final decision will be made once the company is confident that wheat straw supplies and contracting opportunities are adequate.
McLeod said the project will be built on a 500-acre site to accommodate transportation of straw, storage and production.
Site work and construction is expected to begin later this year, pending financing approval.
Late last year, Great Plains announced that it had signed an agreement with PCL Construction, putting PCL in charge of construction of the first mill.
A lead engineering firm is expected to be announced shortly.
When it’s completed, the plant will be the first straw-based MDF production facility in Canada and only the second in North America, McLeod said.
“We are in discussions with a U.S.-based lender who has offered us very attractive terms to finance the entire (project), which will be in excess of $800 million Canadian,” McLeod said.
“We expect them to begin their due diligence very shortly … and we expect final confirmation on funding by late January or early February.”
Contract pricing for wheat straw has yet to be determined and will vary depending on a variety of factors, including transportation and baling arrangements.
McLeod said the central Alberta plant will be the first of several that are being planned for Western Canada.
In addition to creating value for farmers, the plant will reduce dependence on forested trees and will reduce greenhouse gas emissions by using straw waste.
“It’s a game changer on many fronts,” said McLeod.
“We’ll be paying farmers for their excess wheat straw. Unlike trees, straw is an annually renewable, sustainable resource so supply is always abundant.”
McLeod said farmers will be a “key partner” in the venture, which is expected to create at least 350 direct jobs and 1,000 indirect jobs in Alberta.
“We’re bringing to farmers… a new cash crop,” said McLeod.
“We’ll pay them pretty reasonable prices for the wheat straw we need to run the mill. We’re also creating lots of jobs in the mill itself and in all of the secondary activities that go around that, including the baling and harvesting and transportation of straw….”
Great Plains spokesperson Amanda Singroy said the mill, when operational, will mean a significant reduction in greenhouse gas emissions.
On its website, the company says the equivalent of about two million tonnes of greenhouse gases will be diverted annually when the plant is operating at full capacity.
The facility could generate additional value through the production and sale of offset carbon credits.
“Between greenhouse gas reductions from residual agricultural waste we will process, not cutting down trees that would otherwise have been used to produce MDF, and reduction in manufacturing energy through a world-leading new facility, we anticipate GHG reductions on the order of 42 million tonnes over 20 years,” the company said.
Additional details of the project can be viewed online at greatplainsmdf.com.
Producers interested in selling their wheat straw can complete the company’s online survey at greatplainsmdf.com/survey.