A venture that many hoped would weave straw into gold will soon close its doors in Manitoba.
Dow Chemical Canada Inc. announced Nov. 15 that it will cease operations at its Dow BioProducts plant at Elie by the end of the year.
The plant, considered the largest of its kind in North America, uses straw mixed with resin to manufacture what the company describes as high quality fibreboard products.
There were not enough markets for those products to keep the business viable, said Dow BioProducts vice-president of operations Wayne Karolat.
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At the same time, the venture was hit with volatile energy and resin costs.
“The appetite of the marketplace to cover the cost of manufacturing just wasn’t there,” Karolat said, noting that the dramatic rise in the Canadian dollar’s value also was a factor.
Bill Ridgeway, president of the producer co-operative supplying straw to the plant, met with company officials on Nov. 21. He left the meeting confident that growers will be paid what they are owed for straw delivered there.
“I’m not the least bit concerned about Dow meeting their obligations to producers. Our biggest concern is the actual closing down of the plant itself and the loss of sale of straw.”
About 460 producers belong to the Straw Producers Co-op of Manitoba. Last year, they sold about $250,000-$300,000 worth of straw to the plant, which was well below sales seen in previous years.
“I think the plant could be revived and kept going, but not by Dow,” Ridgeway said. “Dow has made the decision that they are going out of the business and that was very clear from our meeting.
“It’s a quality product and the wrinkles are out of the production now. We hope that somebody steps up to the plate and can keep on operating the plant.”
The closure will put 68 employees out of work and will affect 15 contractors.
“It was a very difficult decision for us to make because of the impact on the employees, first and foremost, and also the impact on the community and the industry as a whole,” Karolat said.
Dow Canada is helping employees at the plant by providing severance packages and counselling for job searches or retirement, according to a company News release
news.
The plant was built in 1997 at a cost of $150 million. It operated under the name Isobord Enterprises until financial problems forced it into bankruptcy protection five years ago. Dow Chemical Canada purchased the venture in 2001.
