Rural community groups interested in building integrated ethanol-feedlot operations now have access to a template that will help them decide if it is a feasible project for their area.
The template, which is applicable for small facilities ranging from 15-25 million litres of annual output, outlines the steps for building a plant and helps determine whether conditions exist to support a specific project.
It consists of a technical manual and a computer-based financial template with 807 variables. The federal government provided $84,000 in funding for the $110,000 project.
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“This useful tool will assist the complex legwork required for high quality feasibility studies or business plans that will help increase ethanol production in Canada,” said Western Economic Diversification minister Carol Skelton.
The template can be purchased from the Saskatchewan Ethanol Development Council for $2,000. It will be available to both community groups and private investors.
It is based on lessons learned at Pound-Maker Agventures Ltd., Canada’s first integrated ethanol-cattle feedlot facility. Ten years of financial data from that pioneering operation in Lanigan, Sask., were put into the computer model.
“We are quite confident with the numbers,” said Lionel LaBelle, president of the Saskatchewan Ethanol Development Council.
Developers of the template were worried the model would show that small projects were not feasible due to economies of scale, but that wasn’t the case.
“We were really quite shocked that this is more than just affordable. This is a hell of a business model,” said LaBelle.
Capital cost for a 20 million litre plant with an attached 20,000 head feedlot is estimated at $30.5 million. The return on investment for such a facility could vary from nine percent in the first year to 24 percent in year 10, although each community project would have variables affecting that return.
If the template gives community groups the green light, they can then apply for assistance under the federal government’s $11 million Biofuels Opportunities for Producers Initiative to turn the feasibility study into a full-fledged business plan.
