Federated Cooperatives Limited (FCL) has agreed to acquire Terra Grain Fuels’ (TGF) 150 million litre per year ethanol plant, located near Belle Plaine in the Canadian province of Saskatchewan.
This will enable co-ops in Western Canada to continue to offer transportation fuels to members so they can meet existing renewable fuel standards and prepare for the upcoming Canadian Clean Fuel Standard.
"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, vice-president of energy at FCL. "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."
TGF currently purchases over 400,000 metric tonnes of grain and other starch-rich crops annually for production at the ethanol plant.
The facility processes and sells up to 160,000 tonnes of dried distillers grains per year.
"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 organisations in Western Canada,” added 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 plans to make the plant more efficient, as well as look into carbon capture and storage technologies.
"Two of our deepest connections to Western Canada are agriculture and energy," said Pam Skotnitsky, vice-president of strategy at FCL. "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.”
The sale of the plant is subject to certain closing conditions and should be formally closed by the end of May 2019.