Ingredion Incorporated announced on January 8 that it will cease operations at its legume crop processing plant in Vanscoy, Saskatchewan, Canada, starting this week. The plant produces protein concentrates made from peas, lentils and broad beans. The decision marks a strategic shift in plant-based protein for the global food ingredients company.
According to Ingredion's filing with the U.S. Securities and Exchange Commission (SEC) on January 6, 2025, the discontinuation decision is expected to result in the company recording a pre-tax non-cash asset impairment charge of approximately $65 million.
"Following a strategic review of this business, we have decided to cease operations at the Vanscoy facility," Ingredion said in the filing, noting that the move will affect approximately 20 employees.
From industry star to discontinued production: The rise and fall of the Vanscoy Factory
The Vanscoy plant traces its roots back to 2017, when Oscar-winning director James Cameron and his wife Suzy Amis Cameron founded Verdient Foods with plans to build a pea processing plant in Vanscoy. Verdient Foods has said the 160,000-ton plant will be the largest organic pea protein separation facility in North America.
In 2018, Ingredion entered into a joint venture with the Camerons and Verdient Foods. Two years later, Ingredion acquired all of Verdient Foods, becoming the sole owner of the plant. However, less than five years later, the factory, which had high hopes, was announced to cease production.
Ingredion said it currently plans to sell the plant and its associated properties, but as of the time of this report, the company has not signed a sales contract with any buyer.
Government support and industry distress
The construction of the Vanscoy plant was strongly supported by the Canadian government. In 2020, the Government of Canada provided $12.8 million in funding support to the Ingredion/Verdient project through Protein Industries Canada. This initiative reflects the Canadian government's ambition to promote the plant protein industry. However, with increasing market competition and fluctuating demand, the profitability of the plant protein industry is facing challenges.
In fact, the Vanscoy plant is not the only pea protein processing facility facing difficulties. Another pea protein plant built at the same time, Merit Functional Foods, has been idle since the company went into receivership in early 2023. The company reportedly owes about $95 million in debt, with the main creditors being Export Development Canada (EDC) and Farm Credit Canada (FCC). The plant has yet to find a new buyer.
The future of plant protein industry
The closure of the Vanscoy plant reflects the complexity of the plant protein industry. In recent years, as consumer demand for plant-based foods has grown, many businesses and investors have set their sights on this sector. However, the rapid expansion of the market has also brought about oversupply, price pressure and profitability challenges.
Analysts pointed out that although the long-term prospects of the plant protein industry are promising, in the short term companies need to assess market demand more accurately and invest more energy in technological innovation and cost control.
Ingredion's decision may be just the beginning of an industry realignment. As more companies take a fresh look at their plant protein businesses, the next few years are likely to see more such strategic shifts.
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