TORONTO—BIOX Corp. is looking to breathe new life into an idle 50-million-litre biodiesel facility in Sombra, Ont.—a few kilometres outside the province’s refining capital of Sarnia, Ont.
Owned by Methes Energies Canada Inc., the 21-acre Sombra plant was built in 2009, but never reached full production capacity due to financing issues and tough market conditions, according to BIOX. Along with the US$4.5 million purchase price, the Hamilton, Ont.-based company plans to invest approximately C$5 million to upgrade the plant and bring it back online.
“The Sombra acquisition represents a 75 per cent increase in our production capacity and fits our strategy to control and distribute more gallons, leveraging our existing Sales and Marketing capabilities,” Alan Rickard, the company’s CEO, said.
Over the next 12 months, BIOX, which also operates a 67-million-litre biodiesel plant in Hamilton, plans to improve the efficiency of the Sombra site, as well as install new equipment that will allow it to produce fuel from a wider range of feedstocks, such as animal fats and recycled cooking oils.
Working to supply Ontario with a less carbon-intensive stream of diesel fuel, BIOX plans to use the increased capacity at the Sombra plant to contribute to Ontario’s Greener Diesel program.
“We believe the Ontario market will play an increasingly important role in our distribution network,” Rickard said. “The implementation of the Greener Diesel program in Ontario, with its increasing blend rates and move toward lower carbon intensity fuels in 2017, made Sombra an attractive asset.”
Ontario has mandated all diesel used in the province contain three per cent biofuel by this year and four per cent by 2017.
“We are already seeing with the increase in the Ontario mandate for 2016 that distribution of bio-diesel from our Hamilton facility is shifting quickly from dependence on the U.S. market to fulfilling the demand in Ontario,” Rickard added. “We expect this shift in distribution away from the U.S market to continue as the Ontario Greener Diesel mandate increases for 2017.