HEMP PLANT ON THE HORIZON

An announcement of federal funding has advanced plans for a hemp
processing facility in Dauphin reinforcing the city's unofficial
title as the Hemp Capital of Canada.

At a ceremony in Dauphin July 5, the federal government committed $3
million to the project through Sustainable Development Technology
Canada (SDTC), a foundation created by the government of Canada to
support development and demonstration of green technologies.

The proposed Parkland Biofibre plant, the first of its kind in North
America, is being developed as a pilot project to develop and
demonstrate a process that will utilize raw industrial hemp fibre to
produce insulation and other products such as horticultural matting,
said Don Dewar, a Dauphin-area producer and president of Parkland Biofibre.

"We will have the matting machine to make horticultural matting and
that matting is the basis for the insulation,"Dewar said, adding the
main product of the plant will be the biofibre insulation.

"The insulation product is very similar to fibre glass pink."

The federal dollars also triggers a previous commitment of a $3
million loan from the province.

"And of course the municipal governments gave us a lot in the
industrial park next to Rancher's Choice, so the three levels of
government have kicked in to help us," Dewar said, adding the SDTC
money is to help cover the $11.1 million in costs expected to be
incurred in the plant's first two years of operation.

Dewar added the federal grant is subject to successful final contract
negotiations, a requirement he does not see posing a problem.

The remainder of the $24.4 million needed to build the plant and
operate it for two years will be raised through loans and private capital.

Parkland Biofibre has been talking to banks and has a letter of
intent from Farm Credit Canada to cover half of a $7 million loan, Dewar said.

"We are talking to other banks, all the commercial banks and the
Credit Union, to see how we can syndicate the loan."

As well, the group is in the process of finalizing it prospectus to
raise the private capital.

"We still need to raise a minimum of about $3.5 million dollars of
private capital," Dewar said.

"We are just finalizing the vehicle to raise the money. The idea
behind it when we first got going was to allow local investment so
the profits and the wealth stays in the region."

The plant is being also being leveraged by an $8.1 million commitment
from a consortium of private partners including Alberta-based
Transfeeders Inc., Plant Fibre Technology of Wales, Parkland
Industrial Hemp Growers (PIHG), North American Natural Fibers of
South Carolina, Quebec-based UKAL Canada and McMunn and Yates
Building Supplies of Dauphin.

"It is a pilot to perfect the technology of processing and making the
insulation," Dewar said.

Once perfected the technology could be The project stems from a
failed attempt to bring hemp processing to the Parkland in the late
1990s. At that time the Parkland Industrial Hemp Growers was formed
to supply a facility that never came to fruition.

The stocks of hemp grain and fibre that had ben built up in the area,
as well as the evident potential of the crop, prompted the producers
to investigate the possibility of developing the industry themselves.

"The announcement comes after countless hours of effort and is truly
a reflection of the dedication shown by all our partners who believe
that hemp processing has a sustainable future in Manitoba," said PIHG
president Joe Federowich.

PIHG members will be contracted to supply the plant with fibre.

At full capacity the plant could use 48,000-tonnes of fibre although
Dewar said a more realistic figure is 36,000 tonnes.

Hemp grown for grain, as is done in the Parkland currently, will
produce about one to one-and-a-half tonnes of fibre per acre.

"But we also see farmers growing hemp just for fibre and the yields
then could be up to five tonnes per acre," Dewar said.

"If we are growing it just for fibre we will need 10,000 to 15,000 acres."

Construction of the plant, which is expected to to employ about 20
people, it is hoped, can begin late this fall and provide many
spinoffs for local businesses such as trucking operations.

"It is a real relief to get it to this point," Dewar said.