Schweitzer-Mauduit Canada's flax straw processing plant receives C$385,000 from federal and provincial governments for upgrade, expansion

CARMAN, Manitoba , May 21, 2010 (press release) – The Governments of Canada and Manitoba are partnering to help upgrade and expand the Schweitzer-Mauduit Canada (SMC) flax straw processing company with $385,000 in funding through the Advancing Agri Innovation Program. The announcement was made today in Carman, Manitoba by the Honourable Stan Struthers, Manitoba Minister of Agriculture, Food and Rural Initiatives and Member of Parliament Candice Hoeppner (Portage-Lisgar) on behalf of federal Agriculture Minister Gerry Ritz.

"This funding partnership demonstrates our support of innovative and technological growth in the agriculture industry that is led by companies like Schweitzer-Mauduit Canada," said Minister Struthers. "It is encouraging to see companies challenge the future with new ideas, building value-added products and generating new uses for common byproducts. This kind of diversification promotes sustainability in the agriculture industry by opening the doors to new markets while creating environmental and economic benefits for Manitobans and Canadians."

SMC has facilities in Carman and Winkler and a mobile processing facility in Treherne. It processes approximately 100,000 tons of flax straw annually from Manitoba, Saskatchewan and North Dakota, creating bast fibre for paper and flax shives for horse bedding, soil erosion control and biofuel. Flax fibre can also be substituted for fiberglass and other petroleum based products in some applications to help manufacturers lower their carbon footprint.

"Flax is one of Canada's most versatile crops and it holds tremendous potential for our farmers," said MP Hoeppner on behalf of federal Agriculture Minister Gerry Ritz. "Our Government is working with producers to identify and expand opportunities for their agriculture products. That's why we are proud to partner with the Government of Manitoba on this expansion in Schweitzer-Mauduit and we're optimistic about the economic development and job opportunities that the investment will create in the local community."

"We really appreciate the commitment both the provincial and the federal governments have shown to rural development," said Greg Archibald, Vice President of Schweitzer Mauduit Canada, who is responsible for the Canadian division of Schweitzer-Mauduit International. "With this new equipment we will be producing a line of renewable, sustainable biomaterials to serve the growing bio-economy throughout North America. We see great potential here and are very excited to be part of this unparalleled breakthrough right here in Southern Manitoba."

The expansion of the Carman and Winkler plants will be funded with $385,000 under the Canada/Manitoba Growing Forward initiative. The province is also contributing an additional $100,000 through Entrepreneurship, Training and Trade's Technology Commercialization Program. SMC is providing $485,000 in matching funds and the National Research Council is contributing $150,000. The total project cost is estimated to be $1,120,000.

Completion of the expansion will allow the company to develop new products and access new markets providing additional revenue and creating new value chain businesses and jobs for Manitoba. For example, the new shive screening facility will create five new jobs and spur the development of fibre based, value-added businesses in the biocomposite, nutraceutical and textile sectors.

BACKGROUND

* Schweitzer-Mauduit Canada (SMC) is a wholly owned subsidiary of Schweitzer-Mauduit International.

* SMC employs 45 full time and 26 seasonal workers in Manitoba.

* The company spends over $8.0 million per year on goods, services and wages in Manitoba.

* The company annually produces approximately 30,000 tons of tow (bast fibre for pulp and paper) that it ships to its parent company's specialty paper mill in New Jersey.

* SMC also produces approximately 50,000 to 60,000 tons of flax shives that is used for horse bedding, soil erosion control and biofuel.

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