Ceres suspends canola crushing project in Canada as DSM plans to begin canola protein production

CANADA— Ceres is suspending construction plans for its previously announced US$350 million integrated canola processing facility in Saskatchewan, in Canada, sighting inflationary pressures resulting in higher costs than initially projected and shifting macroeconomic conditions.

The company has thus ended an equipment design and supply contract relating to the planned crushing plant, with the aim of reducing project-related contract liabilities.

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“Termination of this contract and suspension of the project will result in a fourth quarter impairment charge, ” it said. It estimates the impairment will be in the range of US$25million to US$30million.

The company also said it intends to continue to explore avenues to pursue a canola crush project of some form in the future. However, there is no guarantee that such an initiative will come to fruition, it added.

Ceres said, at that time, that it was engaged in discussions with other interested financial and industry players to fund the project.

DSM to begin producing canola protein this year

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Meanwhile, Royal DSM NV has announced intentions to begin producing its new CanolaPro— a sustainable, plant-based protein sourced from the canola protein— in the fall, said Martin Mei, global head of health benefits and solutions, food and beverage for DSM, Delft, The Netherlands.

Companies currently may sign a material transfer agreement to test CanolaPro, which is sourced from non-GMO canola rapeseed that is left over from canola seed processing, Mr. Mei said.

It contains amino acids and delivers a clean taste with good texture and a smooth mouthfeel, according to DSM. Potential applications include burger alternatives, dairy alternatives, protein shakes, bread, sauces, juices and smoothies.

Royal DSM and the Avril Group in 2020 formed a joint venture to produce canola proteins for the global food industry with DSM owning 75% and Avril the other 25%.

Canola processing gains traction 

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Key Market participants of canola protein are focused on strengthening their local distribution channels, with North America foremost in the production and consumption of canola proteins

In April last year, Cargill announced it was going to add 1m metric tons of additional canola crush capacity in Canada, with a new processing unit, also located in Saskatchewan.

In April 2022, it announced it was moving ahead with the build, having secured 247 acres from the Global Transportation Hub (GTH), outside Regina, for US$38 million. The plant will be operational in the early part of 2024.  

In the same year, Viterra Inc, also revealed in its plans to build a canola-crushing plant in the same location that is expected to crush up to 2.5 million tons of canola per year.

Additionally, Richardson International announced in March last year that it would be expanding its canola crush plant in Yorkton, Saskatchewan, to increase capacity to 2.2 million tons.

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