REGINA — An alfalfa processing plant in east central Saskatchewan needs $500,000 by June 15 to remain open.
Norquay Alfalfa Processors Ltd. is not bankrupt, but a pull-out of investor funds has put a strain on finances, said general manager Lorne Dennis.
The Royal Bank is giving the company until mid-June to raise money to continue operations.
Meanwhile, the processing operation is in full swing, with 14 workers.
The two-year-old company needs to raise $200,000 locally and hopes to get $300,000 from the province. So far, locals have raised $30,000. A meeting with SEDCO was scheduled for this week.
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“I think it’s reasonably likely (the company will reach its goal),” Dennis said.
“We have indications that that $300,000 figure is something that’s reachable.”
Finding markets is not a problem for the company.
“We could move twice as much product as we can process. Nor have we had any problems with our pricing.”
In addition to selling to Japan and Korea, Norquay Alfalfa also sold to two new markets last year, Taiwan and the United States.
By last August company officials could see that alfalfa yields were down due to the weather, signalling an impending loss. Yields were 1.2 tonnes per acre, compared with the break-even yield of 1.6 and the area average yield of 1.9.
At the same time the company was planning an expansion.
Financing was virtually in place when the largest institutional investor pulled out. Another investor group said it would remain, but then decided if it withdrew and let the company go bankrupt it could step in, buy the company and operate it.
“We’re trying to replace that money,” said Dennis.
