Major biodiesel expansion

Milligan Bio-Tech Inc. is in the process of completing an expansion to its Foam Lake biodiesel plant that will make the company the largest biodiesel producer in western Canada.

Production at the plant 100 km northwest of Yorkton, which is currently 4 million liters annually, will increase by more than five times to over 20 million liters per year.

Milligan produces biodiesel from non-food-grade canola seed.

"It's a pretty exciting time for us," says Milligan CEO Joe Holash.

Milligan is describing the $8 million project as a "debottlenecking" of the facility because the plant was originally built with 20 million liters of production in mind. As the market at the time could not handle those quantities of biodiesel, the plant has been run with minimal equipment at a low level of production until demand increased.

That time has now come. Earlier this year, legislation requiring two percent biodiesel content in diesel fuel came into effect, first in Alberta and later nationally. Similar legislation will apply in Saskatchewan, Milligan's home province, beginning next summer.

"Demand has really, really picked up," says Holash, who joined the company as CEO last November.

Saskatchewan is expected to require about 40 million liters of biodiesel annually once all regulations are in effect, meaning that the Foam Lake plant alone will be able to meet about half of the province's demand. In reality, Milligan's biodiesel will be sold to various markets both inside and outside of the province.

The company will also take full advantage of a 13-cent-per-liter subsidy (up to 20 million liters) introduced by the provincial government for biodiesel producers this spring.

The expansion requires new equipment installations and an overhaul to some of Milligan's procedures, but relatively few new jobs-"about six or seven," according to Holash.

But the sizeable new market for oilseed should have obvious benefits for local canola producers.

The company expects to be producing its product at a higher rate by the end of October and at full capacity by sometime in November-just in time to take on the new national surge in demand.

"[Milligan] has been kind of waiting for this day, and that puts them way ahead of the game in terms of who otherwise might be our competition. So we're in a very good position right now," says Holash.