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August 23, 2006
Ethanol-Feedlot Template Launched
SASKATOON, Saskatchewan — Rural community groups and other interested organizations now have access to a technical and financial template that will ultimately help them decide if integrated ethanol-feedlot operations are feasible in their regions thanks—in part—to an $84,000 investment from the Government of Canada.
The Honourable Carol Skelton, Minister of National Revenue and Minister of Western Economic Diversification, Saskatchewan Deputy Premier and Regional Economic and Co-operative Development Minister Clay Serby and Saskatchewan Ethanol Development Council president Lionel LaBelle launched the template today.
Western Economic Diversification Canada (WD) provided $44,000 through the Canada-Saskatchewan Western Economic Partnership Agreement for the $110,000 project, commissioned by the Saskatchewan Ethanol Development Council. Minister Gary Lunn announced that Natural Resources Canada (NRCan) provided $40,000. Community groups provided $16,000 and Saskatchewan Agriculture and Food a $10,000 contribution.
“This useful tool will assist the complex legwork required for high-quality feasibility studies or business plans that will help increase ethanol production in Canada,” said Minister Skelton. “When combined with Agriculture and Agri-Food Canada’s $11 million for helping agricultural producers develop sound business proposals for increasing biofuel production capacity, the new Government of Canada has provided an excellent toolkit to help producers and to create job opportunities in all regions of Canada. Studies such as this add to our knowledge and productivity in the natural resources sectors, leading to real change and real results for Canadians."
"Saskatchewan's Pound-Maker integrated ethanol-cattle feedlot facility was the first of its kind," said Minister Serby. "I am pleased that their hard work and expertise was used to develop the template for an integrated model."
"The team gathered excellent, up-to-date technical information for the template, which, combined with the computer-modeling finance tool, will allow communities and proponents to make qualified decisions to determine their suitability for the integrated ethanol industry,” said Mr. LaBelle. “Thanks to Agriculture and Agri-Food Canada, if they decide their idea is suitable, they can apply for assistance through that department’s recently announced Biofuels Opportunities for Producers Initiative (BOPI) to put their ideas into a business plan.”
Attention Assignment Editors and News Directors: Backgrounder Attached
For additional information, contact:
| Joanne Mysak |
Lionel LaBelle Ghyslain Charron Donna Rehirchuk |
WD Toll-Free Number:
1 888 338-WEST (9378) |
BACKGROUNDER
Integrated Ethanol-feedlot Template
Ethanol is an alcohol that can be used as a fuel. It is created from a process that breaks down materials found in grain and corn. The liquid and solid byproducts, thin stillage and distiller’s grain, can both be fed to cattle at an on-site, or integrated, feedlot facility to create a secondary enterprise. Modern vehicles can utilize a 10 per cent ethanol blend, which could significantly lower harmful emissions.
Interest has grown in the past few years amongst rural groups in the province wanting to establish integrated ethanol/cattle feedlot production facilities. At the same time, there have been improvements to production technology and by-product uses.
The Saskatchewan Ethanol Development Council (SEDC) commissioned the template report to assist community groups in their information search for their projects.
The report’s business model comes from the lessons learned
at Saskatchewan’s
Pound-Maker Agventures Ltd., which was Canada’s first operating
integrated ethanol-cattle feedlot facility.
The template helps determine if the right conditions exist for a specific enterprise and outlines the steps necessary to build it. It is applicable to facilities ranging from 15 million to 25 million litres of ethanol.
In order to help communities determine if an ethanol feedlot facility would be cost-effective in a particular region, the template asks four questions:
- Is this a viable business opportunity?
- What is the capital investment required for construction and start-up?
- What is the return on investment?
What is the next step for a community investor or producer group to capitalize on the business opportunity?
It also includes detailed information such as:
- the most recent and improved ethanol processing technologies;
- conceptual design drawings;
- a list of required vessels, equipment, and controls;
- by-product uses;
- feedlot design and operation parameters;
- water, power and natural gas requirements; and
- identification of potential environmental issues and their mitigation.
The template also identifies opportunities for communities to cost share business and design plans which may reduce overall capital construction costs. These costs are estimated at $30.5 million for an integrated 20 million-litre ethanol plant and 20,000-head cattle feedlot.
The return on investment could vary from nine per cent in the first year to 24 per cent in year 10. However, the report cautions that each community will have variations and factors that will have an impact on their returns on investment, and encourages groups to evaluate their specific programs.
The Saskatchewan Ethanol Development Council Inc. (SEDC) was created in 2004 to promote and co-ordinate the efforts of all member stakeholders in the development of a strong, vibrant, profitable and sustainable ethanol industry in Saskatchewan.
Signed in September 2003, the Canada-Saskatchewan Western Economic Partnership Agreement (WEPA) focuses on increasing the competitiveness and productivity of Saskatchewan’s economy. The agreement funds initiatives that develop Saskatchewan’s small- and medium-sized business sector, support economic and technological innovation, assist in economic diversification, and increase Aboriginal participation in the economic mainstream.
Interested community groups can access the template by contacting the Ethanol Development Council at (306) 384-0149.