Rail congestion stymies Man. company’s U.S. crusher

A Manitoba company’s new canola processing plant on the U.S. West Coast has locked in demand from the biofuel sector for its canola oil — but has run up against a supply logjam.

Pacific Coast Canola (PCC), the U.S. arm of Winnipeg-based Legumex Walker, on Wednesday announced a six-month contract to provide Seattle-based Imperium Renewables with its super-degummed canola oil.

The canola oil would be trucked from PCC’s Warden, Wash. plant, about 450 km west to Imperium’s biodiesel processing plant at Hoquiam, a coastal community about 120 km west of Tacoma.

Imperium, in this deal, benefits from PCC’s “close proximity and load-out capabilities which allows us to ship multiple types of oil to our customers’ specifications,” PCC chief operating officer Matt Upmeyer said in a release Wednesday.

“Importantly, the Imperium business, because it is delivered by truck, helps relieve the outbound logistical challenges we are facing due to the North America-wide rail congestion problem,” PCC CEO Joel Horn said in the same release.

However, that same North American rail congestion “is now affecting our inbound delivery of seed from the Canadian Prairies and North Dakota,” Horn said.

“While there is a large amount of seed available, the rail congestion is making us work harder to get the quantities we need to bring PCC to full capacity.”

Horn described the rail congestion as a “short-term challenge” which “underscores the power of our local seed sourcing and product delivery strategy, as the rail congestion also impacts local customers’ ability to bring in canola oil and meal from long distances in a timely and predictable manner.”

However, he said, the company expects local canola seed acreage in the Pacific Northwest to continue to grow, and PCC would then “be able to process and deliver oil and meal to these customers on a much more reliable and economical basis.” — AGCanada.com Network

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Roy Legumex, Walker Seeds merge, prepare IPO, June 8, 2011
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