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Thursday, 19 May 2011 14:18

Shareholders want BFuel project to get energized

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By Ric Swihart
Southern Alberta
Shareholder unrest is building over the fate of the proposed multi-million-dollar biodiesel processing plant east of Lethbridge.

The project by BFuel Canada Corp. was announced almost two years ago but since then, there’s been little visible progress at the proposed site, which is just south of the hamlet of Chin.

Albert Vangenderen of Lethbridge, a major shareholder, said the uncertainty over the status of the BFuel Canada project is at the root of the unrest.

“I have been asking for an annual meeting for a long time,” said Vangenderen. “It is six months overdue. I hope we get one soon. They (BFuel board) have not been doing much for the last few months.”

Ron Knoedler of Lethbridge, project administrator for BFuel, told the Prairie Post on May 9, a newsletter informing shareholders of particulars was supposed to be out within 10 days.

The present situation is a far cry from original expectations several years ago that the new facility would be up and running by the fall of 2008. In June 2009, founder and then company president Glenn Collick — who is no longer associated with the project — made a similar pronouncement suggesting the project was close to getting underway.

At that time, Knoedler said anyone would be able to view the plant design displays, meet the company board of directors and management team, and chat with local business and Alberta government representatives.

This week, however, Knoedler told the Prairie Post he would have to hold off on discussing the project publicly.

“We are still trying to get this thing going. The dream is alive and very well with changes. We will release it to shareholders first,” he said.

Originally, Collick was proposing a $43-million canola crushing and biodiesel refinery in conjunction with two major European banks which agreed to hedge up to 95 per cent of the company’s financing with five or six local lending institutions involved. Plans have since been scaled down, and the cost is now estimated at $22 million.

Lethbridge businessman Brad Kirk, chairman of the board for BFuel Canada and a major shareholder, said he has stalled an annual meeting until he can firmly answer questions.

“This project has never looked more positive,” said Kirk.

He said the former oilseed crushing and biodiesel processing plan has been downsized to make it more financially viable. The oilseed crushing is to instead be done by Richardson Oilseeds, formerly Canbra Foods, eliminating all waste water production at Chin and generating a much smaller environmental footprint, he said.

The German manufacturer of the refining process is developing a turn-key price for the refining technology and is to become an investor, according to Kirk.

Those major changes are expected to make the project an “easy sell” with the federal government which initially offered $7 million when the original project was proposed.

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Kirk is expecting the same government package, considering the major changes and improvements to the project.

About $1.5 million remains in trust from the provincial government, he said.

There are worries the project, which had such great economic and environmental potential, could be in danger of collapsing. Some have privately questioned past business decisions.

It’s believed about 60 shareholders could be stuck if the plant doesn’t become a reality.

Kirk said if the project fails to proceed, shareholders will lose money, but none more than him. He would measure any losses against his business nest egg, however, and might be able to absorb any loss more readily than other shareholders, but failure isn’t in Kirk’s lingo.

The German technology corporation is “amazed,” at the quality of the canola oil available from Richardsons to BFuel which will be a financial production benefit, said Kirk. The more modern process will require less energy.

Kirk was to meet with International Finance May 16. Farm Credit Canada has already agreed to finance construction of the plant.

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