June 17, 2016 – Paul Morden, The Observer – The Hamilton-based BIOX Corporation has purchased the Methes Energies plant near Sombra, and says it plans to restart the idle biodiesel production site in the coming months.
The sale of the plant on Holt Line in St. Clair Township, for $4.5 million US closed Thursday afternoon.
The 50-million-litre capacity plant has been idle for 18 months due, in part, to market conditions, according to a press release issued Friday by Methes.
BIOX CEO Alan Rickard said the company plans to spend $5 million upgrading the plant to increase its efficiency, and to allow it to use a broader range of used cooking oil and rendered animal fats to make biodiesel.
“Our longer-term plan would be it would take about 12 months to get it fully operational, but there may be some opportunities to start it up, at some capacity, earlier than that,” he said.
Rickard said the site is expected to employ approximately 15 to 20 workers.
“We’re had our guys crawling around there for a couple months now doing the due diligence,” he said.
“The site is phenomenal for what we intend to do.”
BIOX operates a 67-million-litre biodiesel plant in Hamilton and said the acquisition of the Sombra facility increases the company’s production capacity by 75 per cent.
Most of the company’s production, up to now, has been sold in the U.S.
“But recently, the Ontario Greener Diesel program has really jump-started the demand for biodiesel in Ontario,” Rickard said.
“That’s a big reason why we’re looking for more production capacity in the province.”
Ontario is requiring that three per cent of diesel fuel sold and used in the province this year be bio-based, and four per cent in 2017.
“We are already seeing with the increase in the Ontario mandate for 2016 that distribution of biodiesel from our Hamilton facility is shifting quickly from dependence on the U.S. market to fulfilling the demand in Ontario,” Rickard said.
“We expect this shift in distribution away from the U.S. market to continue as the Ontario Greener Diesel mandate increases for 2017.”
BIOX currently supplies biodiesel fuel to Shell Canada through a pipeline that feeds directly to the Shell distribution terminal in Hamilton.
The company said its bio-based diesel has the lowest carbon intensity in the province, and the Sombra facility, once it is upgraded to handle lower carbon intensity feed stocks, will produce at a comparable greenhouse gas emission efficiency.
“With these low-carbon intensity products, BIOX expects to be the best performing source of biodiesel available to obligated parties in Ontario to meet the requirements under the Greener Diesel program,” Rickard said in a press release.
Methes CEO Michel Laporte said in a press release he’s confident BIOX will do well in Sombra.
Rickard said officials with Methes “had a lot of very good things to say about the workforce” in Lambton.
Methes purchased the 21-acre former Chinook Chemical plant site in 2008 and commissioned its biodiesel facility a few years later.
Methes said the sale provides it with working capital to move forward with other lines of business.
“We’ll be focusing more on our technology portfolio and the production of natural polyols,” Laporte said.
“We have been quiet over the last several months but busy and that will soon show with some exciting project announcements.”