Food In Canada

Burcon to build $65 Million pea and canola protein production plant

By Food in Canada staff   

Business Operations Food Trends Processing Products Grain & Oilseed Milling Ingredients & Additives Specialty Foods

"Nikon D70,1/1600s,f6.3,230mm. A picture of my field peas up close, still in the combine hopper."

Burcon NutraScience Corporation has announced that it has entered into a joint venture partnership with an investor group to build a new C$65 million pea-protein and canola-protein commercial production facility in Western Canada. The protein production facility, which is planned to initially process approximately 20,000 tonnes of peas per year starting in mid-2020, will produce Burcon’s Peazazz® and Peazac™ pea proteins, as well as Burcon’s Supertein®, Puratein® and Nutratein® canola proteins.


Highlights of the Production Plant and Joint Venture Agreement

  • Establishes a joint venture(JV) to build and operate a $65 million plant protein production facility.
  • JV partner investor group has extensive operations expertise in production facility design and startup, as well as considerable expertise in the manufacturing and sale of plant proteins.
  • JV partner investor group to invest up to $16 million in capital contributions in joint venture partnership.
  • Enters into 20-year exclusive license agreement for Burcon’s pea and canola protein technologies.
  • Plant protein production facility designed to produce Burcon’s Peazazz® and Peazac™ pea proteins, as well as Burcon’s Supertein®, Puratein® and Nutratein® canola proteins.
  • World’s only commercial-scale food-grade canola protein production facility.
  • Phase 1 production processing capacity of 20,000 tonnes per year.
  • Funding structure provides significant equity position for Burcon.
  • Ability to produce plant protein blends with exceptional nutritional value.
  • Advanced state of readiness: completion projected in mid-2020.
  • Production plant design incorporates ability to efficiently expand processing capacity in the future.
  • Advanced state of product development discussions with fast-moving consumer goods companies.



Burcon Functional Foods Corporation

Burcon has established – through a joint venture partnership with an investor group with extensive manufacturing and sales experience in the protein industry – a new operating entity, Burcon Functional Foods Corporation (“Burcon Foods”), which will own and operate the new protein production facility.  Burcon Foods has entered into a license agreement with Burcon for the production, sale and distribution of Burcon’s pulse proteins, including Peazazz® and Peazac™ pea proteins, as well as Supertein®, Puratein® and Nutratein® canola proteins.

As a standalone entity, the management, sales, marketing and production personnel of Burcon Foods will be direct employees of the new operating company. Burcon will be responsible for the technology transfer to Burcon Foods, and will also provide assistance (under contract) to support the design, construction and commissioning of the commercial protein production facility.

Burcon has entered into a unanimous shareholders agreement (the “Shareholders Agreement”) dated May 23, 2019 with this investor group to become joint equity owners of Burcon Foods.  Burcon currently holds 40 per cent of the issued and outstanding common shares of Burcon Foods and the investor group owns the remaining 60 per cent.  Pursuant to the Shareholders Agreement, the parties have agreed that on or before July 2, 2019, they will make capital contributions to Burcon Foods in the aggregate of $10,000,000.  The parties have agreed to make further contributions to Burcon Foods on or before September 3, 2019 in the aggregate amount of $10,000,000. Burcon intends to fund its portion of the capital contributions through the net proceeds of an equity offering to contribute $4,000,000 to Burcon Foods on or before July 2, 2019, and a further $4,000,000 to Burcon Foods on or before September 3, 2019.

Burcon Foods funding is expected to include support from Canadian and provincial government agencies and organizations. The investor group has committed to providing up to $16 million in capital contributions. The anticipated funding structure is expected to provide tremendous leverage to Burcon, whereby Burcon’s capital contributions will be limited to only approximately 12.3 per cent of the total project cost, while maintaining 40 per cent equity ownership of Burcon Foods.

License Agreement

Burcon Foods has entered into a twenty-year exclusiveLicense Agreement with Burcon, dated May 23, 2019, to license the technology required to produce, market and sell Burcon’s novel pulse protein ingredients, including Peazazz®, Peazac™ pea proteins as well as Burcon’s canola-proteins Supertein®, Puratein® and Nutratein®. Under the terms of the License Agreement, Burcon Foods will have exclusive rights across all geographic regions and all product uses for Burcon’s pulse-proteins (including pea) and canola-protein technologies.  Under the License Agreement, Burcon will receive a royalty on the top-line revenue from the sale of the Products by Burcon Foods.

Advanced Stage of Commercial Development

Over the past twenty-four months, Burcon has worked with a number of fast-moving consumer goods companies (“FMCG companies”) in order to provide those FMCG companies with samples of Burcon’s novel protein ingredients. Some of the initial investigations by these FMCG companies have evolved into product development projects, and through this work Burcon has developed a valuable measure of confidence over both the demand and pricing for the protein products and byproducts that will be produced at Burcon Foods’ new pea and canola protein production plant.

Burcon and Burcon Foods expect to have the production facility built by mid-2020. Burcon has engaged Excel Engineering of Fond Du Lac, Wisconsin to assist the Company with final process design, general site concepts, building structural and architectural systems, and project oversight through to commissioning.  This engineering work, which is already underway, is on the critical path of the project timeline and the engineering work completed to date has facilitated decision-making for the final building and equipment specifications.

Burcon expects to provide additional updates on the details pertaining to, and the status of the commercial production plant build-out in the near term.

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