One of Canada’s first canola protein manufacturers has signed a long-term sales agreement with a German firm.
Bio-Extraction Inc. said the 10-year deal with Helm AG is for the purchase and distribution of not less than 70 percent of the specialty protein products produced at the firm’s first facility under construction in Saskatoon.
“We believe that Helm is the premier partner for BioExx as we build our full range of protein products and we look forward to a long and lasting relationship with Helm on a global basis,” said BioExx chief executive officer Chris Carl.
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Once in full production the Saskatoon plant will produce 5,000 tonnes of protein products per year. The value of those products is expected to range from $800 to $7,000 per tonne.
The first product made available to Helm is BioExx Advantexx70TM, a 70 percent pure protein concentrate targeted at specialty feed and aquaculture markets. It is expected to be available in the second quarter of 2009.
BioExx plans to move into production of the higher value super-concentrates and protein isolates over the next two years.
Carl said all the financing is in place for the $10 million Saskatoon plant, which should be crushing canola seed in the first quarter of 2009.
“One of the things we’re most proud of is the fact that we’re facing the very real prospect that we’ll have achieved our goal of going into production within 12 months of funding the whole project,” he said.
BioExx has long-term deals in place with Shafer Commodities Inc, a British Columbia firm that will buy all the canola meal produced at the Saskatoon facility, and Viterra, which will supply the firm with 40,000 tonnes of non-GM canola seed.
The Helm agreement includes a provision allowing BioExx to work with clients to develop new protein products but once a new market is developed, the business will be turned over to Helm.
BioExx wants to focus on being an “exceptionally good” producer of protein products and will leave the marketing up to Helm, which is one of the world’s largest distributors of animal and human nutrition products with 2007 sales in excess of $12 billion.
“Long term it works really well to have just one main customer,” said Carl.
Helm has been granted a conditional right of first refusal for protein products stemming from future facilities. BioExx intends to build one plant a year over the next five years, with each new one double the size of the previous one.
The plan is to have at least two in Western Canada. The next one might be in a smaller community that has plenty of canola production but is located a long way from markets.
Carl said the firm will never be a huge buyer of canola but its protein products will bring in anywhere from two to five times the food value of the crop.
“(Farmers) are getting a lot more value out of what is being grown,” he said.
