Can Pro Adds Canola to Dehy Plant

REGINA - Dec 5/07 - SaskAg -- Can Pro Ingredients Ltd. Of Arborfield is currently taking the necessary steps to establish the first commercial implementation of a new canola processing technology. The technology was made possible through acquisitions deemed a natural fit for the company.

After the recent acquisition of business assets and operations of Arborfield Dehy Ltd. (ADL) and licensing of proprietary canola processing technology from MCN Bioproducts Inc. (MCN), Can Pro Ingredients Ltd. Is in the process of transforming ADL's existing alfalfa processing plant into a multi-product processing facility.

"The acquisition was necessary to provide the base for the production facility," explained Todd Lahti, President and CEO of Can Pro Ingredients. "We acquired these assets and now we are expanding the production facilities that exist there, so it was a faster route than starting from scratch."

He says the combined operations are larger, more diversified, and more flexible than either alone.

"Arborfield Dehy Ltd. Has been operating the alfalfa business since the early 1970s, so when looking for a place to start this new canola business, it was beneficial to start it where there was existing infrastructure in place," said Lahti.

Lahti added that there are certain pieces of equipment that are utilized in the ADL business that are also utilized in the canola processing scheme and that they are planning to put to work within the new facility.

The expansion of the facility is expected to be complete and commissioned by May of next year. In addition to alfalfa, Can Pro will be processing canola. They will be crushing seed and using the licensed new canola processing technology which fractionates canola meal into a series of higher value products.

The infractionation process is a home-grown canola technology invented at the University of Saskatchewan and commercialized by MCN to employ in Saskatchewan's most productive canola region.

"This new venture is a synergistic combination of existing infrastructure and new technology," said Lahti. "Our value-added processing model accesses multiple input crops, maximizes infrastructure utilization, injects proprietary technology, and produces a diversified product line for international feed and industry markets."

"The canola meal is a low-value byproduct right now. MCN's patented infractionation process takes canola meal and fractionates it into multiple byproduct streams, creating products of much higher value than canola meal," explained Lahti.

"The canola meal has been an undervalued product for years with limited utilization. Therefore, fractionating the canola meal into other products opens up new markets for canola protein that previously could not be accessed. The new market suggests that more value is generated from the starting seed."

Can Pro has also attracted attention from biofuel manufacturers who have byproduct streams in need of further processing. The company's total seed utilization and multiple input materials approach to canola and alfalfa provide a model to enhance the economic viability of the biofuels industry.

"One of the problems with the biodiesel economic model is that they get little value from the meal. Our model extracts much greater value from the meal, which then allows better economics for the overall biodiesel manufacturer," Lahti suggested.

"Combined with unique local inputs, our model provides a risk-managed, sustainable, competitive advantage for our new company. If bio-refining is the wave of the future, this is an important step."