A Saskatchewan town has almost given up on a proposed $200 million cereal bar plant, but the project developer says it is still in play.
Three years ago, a secretive company from London, Ont., called International Debranning Inc. announced it would build a plant in Rosthern, Sask., that would fractionate bran from barley kernels to produce 100 million beta-glucan rich nutrition bars a year.
An important byproduct of the plant would be 140 to 180 million litres of ethanol production, which would make the facility one of the largest biofuel producers in Western Canada.
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The original plan called for construction to begin in the fall of 2006 with grain deliveries scheduled for the spring of 2007.
However, Rosthern mayor Doug Knoll said the only work done on the quarter section of land secured for the project has been to remove some bushes and move some earth.
“(The project) is kind of dead in the water,” he said. “I wouldn’t say I’ve given up on it, but I’m kind of resigned to the fact not much is going to happen there.”
Louis Perrin, a local farmer and member of Farm Corp. United Grain Pool, is also skeptical about the future of the project.
“I think it’s a dead duck in the water, to be very honest,” he said.
“We’ve kind of just given up and said, ‘nothing is happening.’ “
Farm Corp. had an agreement with International Debranning that gave its members the exclusive rights to deliver 800,000 tonnes of wheat and barley a year to the Rosthern plant. Members were also given the opportunity to take a $10 million equity position in the plant.
Farm Corp. president Rick Pender declined to be interviewed for this story.
Stephen Mader, who is listed as a director of International Debranning on the company’s incorporation documents, said the project is not dead despite the lack of activity.
“We haven’t abandoned the project. We’re waiting for the lawyers to finalize the financing. They said it will come,” he said.
“That’s the good news. The bad news is I don’t know exactly when.”
Mader said it is a complicated international financing arrangement involving three banks and a twin project in Oregon.
He said anybody who has had trouble with their own mortgage in these tough economic times should appreciate the complexity of getting two $200 million projects off the ground.
“We hope to have something finalized soon,” Mader said.
He provided similar words of comfort in a November 2007 interview when he said hurdles with European financiers had been “pretty well put to bed.”
At that time, he also said the company had been delayed by preliminary work on the Oregon project and that Rosthern residents would be surprised by the flurry of activity once the company turned its attention back to the Saskatchewan project.
“It will be very fast track,” he had said.
Perrin is bothered by how secretive the company has been about its plans. He said it would be a shame if nothing came of the venture.
“There was so much enthusiasm about that plant. It was just unbelievable. This whole area was so anxious for this to go ahead.”
