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Soybean processor’s expansion plans on hold

(Resource News International) — Expansion considerations for Jordan Mills Inc.’s soybean processor in Manitoba have been postponed due to the uncertain economic climate and the weakening of the Canadian dollar, according to an official with the company.

Riding the wave of increased soybean production in Manitoba, the Jordan Mills facility south of Carman, about 80 km southwest of Winnipeg, opened in July 2003.

The facility opened with processing capacity for 21,000 tonnes of soybeans per year, but in November 2004, an expansion of the plant doubled the capacity to 42,000 tonnes.

“We’ve shelved the next expansion stage until at least the spring or summer of 2009,” said Martin Harder, president and owner of Delmar Commodities Inc., which runs the Jordan Mills soybean processor.

The company felt a little uncomfortable going into the fall given the global economic situation. The devaluation of the Canadian dollar also increased the cost of the additional expansion, Harder said.

The expansion plans had called for an injection of an estimated $1 million, which would have increased the current 42,000-tonne capacity by 50 per cent, Harder said.

“All of the infrastructure is in place, and it would have been just a matter of replacing equipment with bigger equipment as well as a few other items,” he said. “The footprint size of the building would not need to change.”

Strong demand and ample marketing opportunities for the soyoil and soymeal produced by the plant were considerations given for the added expansion of the facility.

Harder admitted that sourcing soybeans for the facility has been a challenge at times.

“During the 2007-08 crop year, there were plenty of soybeans grown in Manitoba to meet our requirements,” he said, noting that in years in which Manitoba’s soybean output has fallen short, soybeans have been imported from the U.S.

No soybeans were imported from the U.S. during 2007-08, Harder said. In fact, he added, the company exported some soybeans into the U.S., reflecting the willingness of producers in Manitoba to sell their soybeans.

Harder was also optimistic about Manitoba’s soybean crop heading into the spring of 2009, noting that seed sales to producers in the province so far could lead to an increase in planted area over the 2008 level.

Seeded area to soybeans in Manitoba during 2008 totalled 300,000 acres, according to figures provided by Statistics Canada. This was up from the 230,000 acres seen in the spring of 2007.

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