WINNIPEG – A group of farmers and business people in Russell, Man., are preparing for life after the Crow by considering a gluten extraction plant.
They call themselves Borderland Ventures, and chair Herb Lovas says they’ve been thinking for a year about the high freight rates they will face when the Western Grain Transportation Act subsidies are cut.
“We decided we have to look at processing our own grains and selling them as a finished product and not selling them as a raw product or shipping them out of the country,” said Lovas, who farms near the town.
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Borderland Ventures found out about the gluten market this summer, and has hired a consultant to do a feasibility study. The plant would likely first extract gluten from wheat, then use remaining starches for ethanol. It could also include a feed processing operation.
Gluten is used mainly to add protein to milled wheat. But because of its elastic properties, it can be used in products ranging from processed meats to biodegradable plastics. Ethanol is added to gasoline to reduce pollutants.
Lovas said that on the basis of a preliminary study, the plant could cost about $15 million and employ about 30 people. It would likely take in grain from a 110 kilometre radius of Russell, an area which would cover parts of Saskatchewan, as well as parts of Manitoba.
“We’re getting really excited about this,” said Lovas. “It really looks good.”
Studying new markets
Nick Kalin, an Edmonton-based consultant, is doing the feasibility study. He worked as the head of the gluten division at Labatt’s for more than 10 years, and helped found the International Wheat Gluten Association, which finds new markets and uses for the product.
Kalin said the worldwide market for gluten is about 500,000 tonnes per year and it is expected to grow by at least four percent a year.
Kalin said the removal of interprovincial trade barriers, sometimes “illogical” financial incentives, and the need for co-operation among plants would be key to the plant’s success.
“If there’s conflict between the provinces, one province trying to outdo another one, I think it ends up we’re all losers,” he said.
Kalin said there are presently two plants in Canada that produce about 22,000 tonnes of gluten a year. Both are owned by U.S.-giant ADM. The domestic market is about 7,000 tonnes.
Kalin said the Russell plant could produce, from 4,000 to 8,000 tonnes per year.
Lovas said the group has raised money to cover half of the study, while other money came from provincial rural economic development funds. Lovas said about 150 people have bought memberships, and some have pledged money for the project.
