Federation Co-operatives Limited (FCL) intends to purchase Terra Grain Fuels’ (TGF) 150 million litre-per-year ethanol plant near Belle Plaine as part of a mutual agreement between the two companies.
The move would position local co-ops throughout Western Canada to continue to provide transportation fuels to members so meet existing renewable fuel standards. It would also help co-ops prepare for the incoming national Clean Fuel Standard, according to an FCL news release. No financial details were released.
“As an active contributor to Western Canada’s energy sector, we understand that we have a role to play in reducing greenhouse gas emissions and finding ways to lower the carbon intensity of the fuel we manufacture and distribute,” said Cal Fichter, FCL vice-president of energy.
“This purchase not only prepares us to meet the incoming national Clean Fuel Standard, it also fits our commitment to being a responsible and sustainable contributor to Western Canada’s economy for decades to come.”
The 185,000-square-foot TGF plant — located on 152 acres — contributes more than $100 million annually to southern Saskatchewan through the purchase of more than 400,000 metric tonnes of grain and other starch-rich crops from more than 400 area producers. The plant also processes and sells up to 160,000 tonnes of dried distillers grains (DDGs) every year.
Operations at the plant began in 2008. The TGF plant then became one of two major ethanol plants in the province and helps Saskatchewan produce 16 per cent of Canada’s ethanol.
“We are very pleased that our business is being acquired by FCL, a long-term and trusted customer of TGF and one of the most stable and successful organizations in Western Canada,” said Calvin Eyben, president of TGF.
“This is a big win for TGF, FCL, the province of Saskatchewan and all of our stakeholders. To our valued customers, suppliers and other business partners, it will be business as usual for TGF and we don’t anticipate any interruptions during this transition period.”
FCL is planning to build on what TGF has established by investing in the plant to make it more efficient and by pursuing carbon capture and storage technologies.
“Two of our deepest connections to Western Canada are agriculture and energy,” said Pam Skotnitsky, FCL vice-president of strategy. “To be able to invest in both through a local business that is already creating positive economic impacts is really an ideal situation for FCL and the Co-operative Retailing System.”
FCL will continue to operate TGF with its 45 existing employees who have built up the plant and business over the last decade. TGF will keep working directly with all of its existing clients and partners.
“We look forward to welcoming these new team members and working with them on bringing improvements to the plant that they’ve already invested so much in,” said Skotnitsky. “As part of the Co-operative Retailing System that reaches 780 gas bar and card lock locations, they’re having an impact across Western Canada.”
The sale of TGF, subject to certain closing conditions, is expected to close by May 31.