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Sask. biodiesel maker to ramp up capacity

An eastern Saskatchewan company that’s been pumping out canola biodiesel for 10 years plans to quintuple its maximum output by year’s end.

Milligan Bio-Tech, operating at Foam Lake, about 90 km northwest of Yorkton, said Friday it’s completed a $4 million private placement of unsecured convertible debentures and lined up a $4 million credit facility to finance an $8 million “debottlenecking” of its biodiesel plant.

The plant’s annual biodiesel production capacity, which now sits at about four million litres, would be expanded to over 20 million litres once the debottleneck project is complete, the company said.

The increased capacity would equal about half of the forecasted requirements for biodiesel in Saskatchewan when that province’s biodiesel mandate comes into force next July, the company said.

Milligan, which uses non-food-grade canola seed as its feedstock, would then essentially become the biggest producer of biodiesel in Western Canada, the company said.

Debottlenecking, generally, is a re-engineering of a production line, aimed at removing previously imposed unit limits or restrictions on its rate of output.

“With the announcement of federal and provincial mandates for biodiesel, we see that the time is right to round out the capacity of the Foam Lake facility and increase our production efforts,” Milligan CEO Joe Holash said in a release.

“Competitive issues”

“The Saskatchewan government has responded favourably to the competitive issues of our new and growing industry and has put a rebate program in place that will help to keep us competitive with out-of-province producers who already benefit from similar programs.”

Combined, the federal and provincial assistance “puts us on equal footing” with larger U.S. biofuel processors who currently supply biodiesel in Western Canada, he said.

Milligan currently sells its biodiesel into markets in Western Canada, while selling its biodiesel coproducts, such as diesel fuel conditioner, penetrating oil, road dust suppressant and rust inhibitor, via dealers and distributors throughout North America.

The company set up in 1996 and began making methyl ester biodiesel at first on a laboratory scale in 1999. It added a crush plant at Foam Lake in 2006 and started work on a biodiesel optimization plant in 2007 that was ultimately meant to ramp up Milligan’s capacity to seven million tonnes a year.

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