Local farmer-led co-operative 'upbeat' about ethanol loans
02/14/2004
Group has plans for $86-million plant in Oak Park Road are
BY MICHAEL-ALLLAN MARION
EXPOSITOR STAFF / BRANTFORD
Leaders of a local fanner-led cooperative believe an announcement Friday of special loans to seven ethanol-processing ventures bodes well for the future of their proposed $86-million plant on the outskirts of Brantford.
John Efford, the Minister of Natural Resources Canada, announced loans totaling $78 million will be extended under the Ethanol Expansion Program to: Suncor Energy Products Inc. of Sarnia; Commercial Alcohols, Inc. of Varennes, Que.; Husky Oil Marketing Co. of Minnedosa, Man.; Husky Oil Operations Ltd. of Lloydminster, Sask.; NorAmera BioEnergy Corp. of Weyburn Sask; Okanagan Biofuels Inc. of Kelowna, B.C.; and Seaway Grain Processors Inc. of Cornwall, Ont.
The seven ventures will process 750 million liters of fuel ethanol a year from wheat or corn, quadrupling Canadian production to nearly one billion liters from a current 200 million liters.
The program is part of a $2-billion commitment by Ottawa to climate change and its obligations under the Kyoto Accord.
"We're pretty upbeat about the announcement," said Tom Cox, head of Integrated Grain Processors Cooperative Inc., a largely Brant farmer-led cooperative.
He said two factors give IGPC reason to be optimistic. The first is that an application by IGPC met seven of eight eligibility criteria. It failed only because it lacked enough equity.
But that was expected because IGPC had hot yet started its $43 million equity drive. Cox explained.
"We put it in because we felt we had an obligation to the shareholders to let them see the process. But we're quite pleased we met all the other seven requirements. When we have enough capital from our equity drive, we'll apply in another round."
Cox was enthused about the loan to Seaway because it's also a farmer-led co-op. After more than a decade of work, setbacks and tough sledding to raise enough capital, the co-op will finally get to build its long-proposed plant and offer a value-added customer to Eastern Ontario corn producers.
That bodes well. Cox said, for IGPC's $86-million plant proposed for the Oak Park Road area on the city's northwest limits with Brant County. It intends to draw corn from producers in Brant and neighboring counties.
After raising $1.2 million in an initial offering a year ago for design and start-up costs, IGPC kicked off its second equity drive in January in a public meeting in Brantford. The next meeting is scheduled for Thursday in Cambridge.
Agriculture Minister Bob Speller considers the announcement positive for Canadian agriculture.
"These plants will create new markets for our farmers, boost our rural communities and support regional development," said Speller, who as Haldimand-Norfolk-Brant MP, represents a major part of the area that has attracted investors to IGPC.
"This is a very exciting time for our ethanol industry."
According to its business plan, IGPC’s plant would use 11.8 million bushels of corn a year to produce 125 million liters of ethanol. The process would also yield as byproducts 96,000 tones a year of distillers grain for livestock feed and 60,000 tones of carbon dioxide.
Economic benefits to the area would include 150 construction jobs, 32 to 35 high-paying permanent jobs, annual direct revenue of $75 million and direct and indirect revenue of $175 million.
The project has the backing of Brant County council and the support in principle of city council, subject to meeting regulatory conditions required to approve an official plan amendment to allow the plant to be built.
Environmental advocates, however, have concerns about the amount of water the plant would use and the fact that it would be located on an important aquifer system.
IGPC’s leaders are arranging to meet with the advocates in effort to improve mutual understanding about the plant and the issues.
