Can-Oat Milling Expanding

VANCOUVER - Dec 13/05 - SNS -- Can-Oat Milling Inc. plans to add 50,000 metric tons (MT) of processing capacity to its oat plant in Portage la Prairie, Manitoba, bringing its total milling capacity to over 340,000 MT per year or 1.4 million pounds of finished oat ingredients per day.

The expansion, estimated to cost $12 million, will include the addition of primary processing capacity, flaking capacity, high-speed bagging line, on-site storage, and in-house workspace. Construction is slated to begin in the spring of 2006 with new capacity coming on stream approximately 14 months later.

Can-Oat will also invest $1.7 million over the next 10 months on new biomass fired boiler technology, which will enable Can-Oat to burn oat hulls for its process steam requirements. This hull burning equipment will replace a significant portion of its natural gas usage and reduce its annual energy costs by more than 60%. Savings are expected beginning in the fall of 2006.

Karl Gerrand, President of Can-Oat Milling said, "We have completed our assessment of the marketplace and are taking the first step now to meet the growing needs of our customers. Today, we operate at or near full capacity, 24 hours a day, 7 days a week. This expansion will allow us to address the growing needs of our existing customers and competitively position ourselves to take advantage of the increased growth we are seeing in the consumption of whole grain oat-based products in the consumer market."