The money has been lined up to fund a major expansion for a Winnipeg pea and canola protein processing plant that’s still being built.
Merit Functional Foods Corp. announced May 4 it has secured a debt financing package of up to $85 million from “a syndicate of lenders” including Export Development Canada, Farm Credit Canada and CIBC.
Merit, a joint venture between Vancouver-based Burcon NutraScience and former executives of Hemp Oil Canada, said the financing “will support (its) growth plans and allow for expansion of their pea and canola protein production capacity.”
Merit didn’t say in its May 4 release exactly what the expansion would entail. A Burcon representative said Wednesday the company couldn’t discuss further details.
However, Merit’s co-CEO Ryan Bracken said in January that the company already had plans afoot to expand the plant and more than double its production.
Merit remains in the midst of building a “state-of-the-art” 94,000-square foot production facility in Winnipeg to produce “high-quality” pea and canola proteins. The plant, first announced last summer, is “on track to be fully operational” by the fourth quarter of this year.
The Winnipeg plant, when operational, “will be the only commercial facility in the world with the capability to produce food-grade canola proteins,” Merit said in its May 4 release.
To support the new financing package, Burcon has put up a short-term letter of credit worth $6.5 million, to remain in place until Sept. 30 at the latest. Burcon said May 4 it has also pledged a $4 million guarantee of Merit’s debt obligations.
“We are thrilled with Merit’s decision to expand production capacity at Merit’s state-of-the-art plant protein production facility currently under construction,” Burcon CEO Johann Tergesen said in the same release.
Burcon, he added, is “equally thrilled that Merit has arranged such a substantial debt funding package.”
Merit in January secured an open-ended long-term deal to supply global food processing giant Nestle with pea and canola proteins. Merit has also picked up support from research “supercluster” Protein Industries Canada to help further develop its proteins.
Merit said its product portfolio lines up with “a number of consumer label preferences, including allergen-free, gluten-free, non-dairy, non-GMO and vegan.” — Glacier FarmMedia Network