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SGF involved in a $100 million project to build an ethanol plant in Varennes
Varennes, October 30, 2000 – Deputy Prime Minister and Minister of State for the Economy and Finance and MNA for Verchères, Bernard Landry, Chairman of the Board, President and Chief Executive Officer of Société générale de financement du Québec, Claude Blanchet, and President and Chief Executive Officer of Commercial Alcohols Inc. (CAI), Robert Gallant, announced a $100 million investment to build an ethanol plant in Varennes.
“With the Varennes project, SGF and its partner CAI are not just building an ethanol plant, they are also developing a sector that will have a ripple effect locally because of the establishment of other related (corn mill) or linked businesses (production of butanol, propylene glycol, biodegradable resins) which will increase local know‑how”, said Bernard Landry. The Deputy Prime Minister is delighted that such a large project is being carried out in Québec and more specifically in his riding.
“The reason we are involved in CAI is because of the underlying strategic aspect for the Québec chemical industry. In addition to giving us the opportunity to work closely with a partner recognized for its expertise in the ethanol sector, this investment offers SGF Chimie the opportunity to get involved in chemical bio-conversion, said Claude Blanchet. Also, using ethanol as an additive in gas is a safer alternative for the environment than its main competitor, MTBE, which causes more damage to the water table. Ethanol also replaces 10% of the fossil materials used in fuel since it is derived from corn, a renewable substance.“
“We are delighted to have the support of the Québec government for the project. We could not build the plant without its help and the involvement of the farm industry”, added Gallant.
Through its subsidiary SGF Chimie, SGF plans to invest $25 million in the form of convertible debentures in CAI. In addition to ethanol, the company will produce carbon dioxide (CO2) which is used by the soft drinks industry, and spent grain (animal feed). The plant should start operations in first quarter 2002 and will have about 50 full-time employees.
Commercial Alcohols Inc. is the largest producer and distributor of industrial alcohol and fuel ethanol in Canada. The company already owns two distilleries in Ontario, one in Chatham and the other in Tiverton. CAI’s industrial customers use alcohol in the production of solvents, detergents, paint, ink, etc. Alcohol can also be used for medicinal and domestic purposes, for example in cough syrup, mouthwash, deodorant, hair spray, etc. When added to gas, fuel ethanol raises its octane rating and significantly reduces motor vehicle exhaust emissions.
SGF Chimie is a subsidiary of Société générale de financement du Québec whose mission is to carry out economic development projects meeting normal profitability requirements, in collaboration with business partners. Since it was restructured in 1998, SGF has generated investments of about $2 billion, creating over 9,000 direct and indirect jobs in the operating phase, not counting the thousands of jobs created during the construction phase. As at December 31, 1999, SGF’s consolidated assets totalled close to $2 billion. SGF has 40 international partners operating in Québec.
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Sources:
Sylvie Brousseau
Director of Communications
SGF
Jean Roberge, Eng.
Manager, Project Development
Commercial Alcohols Inc.
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