Business Case for a Pea Processing Plant

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Pea Processing Facility Snapshot

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MoveUP Magazine Article

REDI and Mackenzie County are interested in understanding the business case and capital cost of construction for a field pea processing facility as part of an overall feasibility study for the area. REDI and Mackenzie County have engaged Keith & Associates and APSL to provide background information about the processing technology required, to undertake the conceptual design of the site and facilities, and provide preliminary capital cost estimating for the project.

Background

The demand for plant protein from crops such as peas continues to grow and is expected to do so for the foreseeable future. Consumers are increasingly seeking out healthier food options and while the majority continue to also eat meat, many are becoming “flexitarians” who strive to eat less meat and incorporate more plant protein into their diets

REDI would like to promote the initiative of incorporating a company, developing a value chain and moving to the construction of a dry processing fractionation facility.

There are two market segments for Field Pea. Either the feed market or human foods. The three use areas for Field Pea are food, feed, and ingredients. Dried peas are processed into starch, protein, and fibre which then can be used for food or feed.

Fractionation separates pulses into concentrates and isolates such as proteins, starches and fibres for ingredient use in food processing. Isolates such as pea starch are used as thickening agents in soups and sauces, and pea flour is used in the processed meat industry. Starches extracted from pulses are also used in industrial applications in the paper and board industries.


The capital cost is estimated to be as follows:

  • Phase 1 – Site Development, Receiving, Cleaning and Packaging: $16,687,235
  • Phase 2 – Dehulling and Splitting: $5,253,316
  • Phase 3 – Dry Fractionation: $5,976,461

Total - $27,917,012


Global demand for protein – whether from meat, aquaculture or plant sources – is booming in part due to rising incomes in emerging markets in Asia and Africa, industry analysts say. In North America, consumers are shifting their diet preferences to include more protein, and 35% of U.S. households last year said they follow a specific protein-focused diet

  • Millennials and engaged consumers: digital natives – concerned with food provenance, ‘clean’ eating, how food is produced (social & environmental impacts), engaged and open to new products, innovations and ingredients.
  • Increasing population: global population is expected to reach 8.5 billion by 2030 and 9.7 billion by 2050, up 31%.

Bullet Points

  • Alberta Represented 21 percent of Canada’s seeded acres of Peas.
  • REDI Region grows 130,000 acres of peas
  • Higher levels of protein in REDI region peas
  • 10 Tonne Per Hour Plant would require 104,000 Tonnes of Peas per year.

Next Steps

  1. Incorporate a for-profit company to move this initiative forward.

    A legal entity will need to be created to move this initiative forward. There are basically two options. The first is to create a new generation co-op and the second is to incorporate a company. We believe incorporating a company is the preferred option.

  2. Develop a value chain.

    We believe businesses like this are well suited to value chains. It can be very beneficial to have producers as investors in the facility as they feel a stronger commitment to its success. As well, having the those buying the facility’s products participating in the value chain helps ensure the company is connected to the end user and is able to adapt and innovate as demand evolves.

  3. Move forward with involvement from all value chain members.

    Once the value chain has been established, it is important to keep each member involved as the plant is being built and as the business is being developed.

  4. Attract investment from the value chain partners.

    One advantage of creating a value chain is the potential to have the members of the chain become investors in the processing company.

  5. Identify potential sources of grant funding.

    Both the federal and provincial governments have grant programs that support businesses that are entering new markets and/or using innovative technology.

Left: Growth in Production of Peas 2001 2012, Prairie Provinces. Right: Pea Production in Alberta (1,000 Tonnes) 2001-2012
Left: Growth in Production of Peas 2001 2012, Prairie Provinces. Right: Pea Production in Alberta (1,000 Tonnes) 2001-2012

Gord Bacon, CEO - Pulse Canada

“The growth in the investment in the processing plants is telling you that the industry feels that is a long-term trend. You don’t spend hundreds of millions of dollars without being confident that this is a long-term market demand that’s there.”

REDI PILLARS

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