Little is known about the company that plans to build a $200 million debranning plant in Rosthern, Sask.
International Debranning Inc. has chosen to stay out of the limelight, allowing its business partner Farm Corp. United Grain Pool to do the talking about the recently announced biorefinery project.
The plant is expected to use a patented process to fractionate bran from barley kernels to produce about 100 million beta-glucan rich nutrition bars a year.
An important byproduct of the process will be an estimated 140 to 180 million litres of ethanol, which puts the project in the same league as the Husky Energy Inc. plant in Lloydminster, Sask.
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Construction is scheduled to begin within the next six months and the company expects to be taking grain deliveries next spring.
Lionel LaBelle, president of the Saskatchewan Ethanol Development Council Inc., said it is unusual for a project of this size to emerge out of the blue.
“I would argue that the Ethanol Development Council pretty much has its finger on just about everything that’s going on in the province, so it is surprising, but honestly we have not discussed anything with these folks.”
Rick Pender, president of Farm Corp, said an official from International Debranning was supposed to attend the April 27 news conference where the project was formally announced, but those plans were thwarted by an illness in his family.
In the meantime, the four entrepreneurs that run the company have asked Pender to keep their names out of the news until they arrive in Rosthern for a June 1 sod turning ceremony.
Government documents show the firm was incorporated in Ontario on Feb. 2, 2005, and was registered in Saskatchewan on March 29, 2006, as a grain processing firm. The directors of the company are listed as Donald Crich of London, Ont., and Stephen Mader of Wiarton, Ont.
Both directors were contacted for this article but did not return calls.
Pender acknowledged that International Debranning’s secretiveness has raised suspicion.
He said an internet search of the company will turn up little information because it is a new firm that has sought no government assistance and has avoided the limelight.
“Once you get to know these fellows, once they come out of the woodwork, so to speak, you will understand where they come from.”
Pender said Farm Corp. has done its due diligence and is comfortable that its business partner will deliver on what it has promised.
“I do have personal information, being on the inside, that it’s a go. The financing will not be any problem here.”
In fact, the company has financing in place to begin construction on two similar projects in the United States, he said.
Farm Corp. will be the only outside investor in the Rosthern plant, with the opportunity to take a $10 million equity position in the facility.
Farm Corp. appeared on the prairie agriculture scene in 2000 when Pender set up what he hoped would be a farmer-owned international marketing cartel that would establish a minimum price for wheat of $10 per bushel basis export position by 2006.
The original plan for the venture was to sign up 200,000 to 300,000 farmers in the five major wheat-exporting nations to put some 70 million tonnes of wheat under contract with Farm Corp.
Pender would not say how many members the company has today but the current membership represents about two million tonnes of grain, 95 percent of which belongs to Saskatchewan farmers.
The company did not meet the lofty goals it had established for itself. According to the latest Pool Return Outlook, the price for No. 1 CWRS 13.5 percent in store Vancouver for the 2005-06 crop year is $5.47 per bu.
“The snowball effect never took place,” said Pender. “We went back to the drawing board and said this is not going to happen exactly in the time frame we would like it.”
About three years ago, the company became a marketing agent for Canadian farmers in the domestic marketplace.
Its deal with International Debranning provides Farm Corp. members with the exclusive rights to deliver the 800,000 tonnes of wheat and barley the Rosthern plant will require on an annual basis. Farm Corp.’s trucking division will handle transportation of grain into the plant.
Pender expects his shareholders will come up with $10 million of equity by Christmas but they won’t put money into the plant until it is into the construction phase.
