NORTHWOOD, N.D. - A crushing plant that reopened here this summer under new management is doing as well as can be expected and could be expanded, its general manager says.
“I think the plant is doing fairly well for the start-up we had, taking a plant that was down (out of operation) for so long,” says Robert Killam. “We have a positive crush margin, and we’re always interested in expansion,” which could come in several forms, he says.
Crush margin is how much a plant earns or loses when it processes a raw product.
The Northwood plant, which had been closed since 2009, resumed operations this summer under Prairie Premium Oil management. Initially, the reopened plant crushed old-crop canola, or canola harvested in 2013. Now, with the 2014 harvest under way, the plant is crushing new-crop canola, too.
Because the plant was out of operation for roughly five years, employees checked every piece of equipment to make sure it still operates properly.
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One challenge is the plant’s aging computer software, which might need to be updated, Killam says.
The plant can crush up to 7,000 tons of canola a month. The plant is now running at about 94 to 95 percent of capacity.
Canola seeds - similar in size to poppy seeds - are crushed to produce oil, which has a reputation for being healthy, and meal, generally fed to cattle and pigs.
So far, the plant has shipped out about 5,000 tons of product. “The feedback from all our customers, on the oil and the meal side, is that the quality is just excellent,” Killam says.
The plant already has contracts to sell canola oil and canola meal through the spring of 2015.
Both meal and oil from the Northwood plant are sold to a wide range of customers, Killam says.
Some of its products are shipped by truck, some by rail. On the day that Agweek visited, the plant shipped out four trucks, each carrying about 26 tons of canola oil.
The plant operates around the clock, with a staff of 20. Most employees live within 30 miles of Northwood, a farm town of 950 that’s 35 miles southwest of Grand Forks.
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“We love creating jobs,” he says.
Killam, who has 35 years of industry experience in Canada, the U.S., China and Europe, says he’s a Canadian citizen who lives in Poland with his family. The investment group involved in Prairie Premium Oil asked him to evaluate the Northwood plant when it was still shut down.
New management
Prairie Premium Oil, which consists largely of investors from Sarles, Munich, Rolla, Rock Lock and Langdon, all in North Dakota, once hoped to establish a new canola crushing plant in Munich. When that didn’t work out, they began investigating the defunct plant in Northwood.
The plant opened in 2007 and initially crushed soybeans, later expanding into canola, sunflowers, corn germ and flax, with a daily output of 200 to 300 tons. North Dakota is the nation’s leading producer of canola, sunflower and flax, and soybeans and corn are increasingly popular in the state.
The plant, which cost $10.2 million to design and build, closed in 2009 after running into financial difficulties. A Nebraska businessman bought the plant for $1.1 million at a public auction in Northwood on Nov. 26, 2012. Prairie Premium Oil is leasing the plant from him now.
Ideally, the plant would be based in North Dakota’s Cavalier County, which leads the state in canola production, Killam says.
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But the plant is attracting the raw canola it needs, he says.
For more information on selling canola to the Northwood plant, visit www.prairiepremiumoil.com .
There also are canola crushing plants in Hallock, Minn., and Velva, N.D.
Canada is the world’s largest producer and exporter of the crop, which is grown in northwest Minnesota, too.
Potential expansion
The Northwood plant has the capacity to crush a number of crops. For now it’s focusing on canola, but the company doesn’t rule out expanding into other crops eventually.
The canola oil produced and sold now by Prairie Premium Oil is what’s known as “canola super degummed,” which Killam describes as “not finished oil. It still has to be bleached and deodorized. “
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His company is interested is going a step further and moving into the “RBD” market, or “refined, bleached, deodorized oil,” which can be can be used in a large variety of edible oil products.
Prairie Premium Oil also is interested in expanding into non-genetically modified canola; it handles conventional canola now.
The plant uses what Killam says is an environmentally friendly method of extracting oil and meal from canola. Prairie Premium Oil wants to find more ways of using that to win sales with environmentally conscious customers.
The immediate concern, however, has been getting the plant up and running.
“You have to walk before you can run. Right now, we’re focusing on what we have. In the future, we’ll be focusing more on value-added,” Killam says. “There are a lot of opportunities out there.”
