Can-Oat Milling Inc., a wholly owned subsidiary of Saskatchewan Wheat Pool Inc. (SWP: TSX), today announced a major capital expansion to Can-Oat Milling’s Portage la Prairie, Manitoba plant. The company expects to process an additional 50,000 metric tonnes of oats as a result, bringing its total milling capacity to over 340,000 metric tonnes per year.

The expansion, estimated to cost $12 million, will include the addition of primary processing capacity, flaking capacity, high-speed bagging line, on-site storage, and in-house workspace. Construction is slated to begin in the spring of 2006 with new capacity coming on stream approximately 14 months later.

Karl Gerrand, President of Can-Oat Milling said, “We have completed our assessment of the marketplace and are taking the first step now to meet the growing needs of our customers. Today, we operate at or near full capacity, 24 hours a day, 7 days a week. This expansion will allow us to address the growing needs of our existing customers and competitively position ourselves to take advantage of the increased growth we are seeing in the consumption of whole grain oat-based products in the consumer market.”

When complete, Can-Oat Milling will process 1.4 million pounds of finished oat ingredients per day.

Can-Oat will also invest $1.7 million over the next 10 months on new biomass fired boiler technology, which will enable Can-Oat to burn oat hulls for its process steam requirements. This hull burning equipment will replace a significant portion of its natural gas usage and reduce its annual energy costs by more than 60 per cent. Savings are expected beginning in the fall of 2006.

“We have a team at Can-Oat that prides itself on identifying solutions and technologies that drive increased efficiencies. This project will reduce the impact of rising natural gas prices on our production costs. It is a further illustration of our commitment to innovation and to an industry that we believe has significant long-term potential,” added Gerrand.

Can-Oat is the largest industrial oat processor in the world. Can-Oat Milling operates state-of-the-art oat milling facilities in Portage la Prairie, Manitoba and Martensville, Saskatchewan. The company is a leading supplier of primary and finished food ingredients, including a full range of oat-based products like old fashioned flakes; quick cooking oats; baby oat flakes; oat bran; oat flour; whole oat groats and steelcut oat groats.

Can-Oat Milling Inc., the general partner of Can-Oat Milling Limited Partnership, is wholly owned by Saskatchewan Wheat Pool, a publicly traded agribusiness headquartered in Regina, Saskatchewan. Anchored by Prairie-wide grain handling and agri-products marketing network, the Pool channels Prairie production to end-use markets in North America and around the world. These operations are complemented by agri-food processing and strategic alliances that allow the Pool to leverage its pivotal position between Prairie farmers and destination customers.