The Schweitzer-Mauduit Canada flax straw processing plants in Carman and Winkler will be expanded with the help of funds from both the provincial and federal governments, officials announced in Carman on Friday.

The expansion of plants will be funded with $385,000 under the joint Canada-Manitoba Growing Forward initiative, along with $100,000 from the provincial government, $485,000 of matching funding from Schweitzer-Mauduit Canada and an additional $150,000 from the National Research Council.

The final cost of the expansion project is estimated to be $1.12 million dollars.

Manitoba Minister of Agriculture Stan Struthers and Portage-Lisgar MP Candice Hoeppner were on hand for the announcement.

Greg Archibald, Vice President of Schweitzer Mauduit Canada, who is responsible for the Canadian division of Schweitzer-Mauduit International, said the company appreciates the funding.

"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," Archibald said.

At the Carman and Winkler plants, Schweitzer-Mauduit extracts cellulose from the stem of the flax plant and sends it to the United States where it is used primarily to make cigarette paper.

However, over the past couple of years the company has also started making sustainable products, such as insulation.

"The ultimate we're working toward is to use it as a replacement for fibreglass in buses, airplanes, and all kinds of products," Archibald said.

The government funding will have a trickle-down benefit for farmers in the area, who are expected to see an improved demand for flax.

There will also be a benefit for Kevin Lumb, who is working on getting his Carman-based log factory up and running for camping season.

Lumb said he has figured out how to compress material that used to be considered waste from flax straw into a log that will burn more than 10 hours.

"Anywhere you use wood you can replace it with this product, whether it's a fireplace, wood stove, barbeque," Lumb said.

Lumb said he is planning on keeping his business in Carman, near the Schweitzer-Mauduit plant, which supplies him with the material he uses in his logs.

However, he says he already takes orders from around the world.

- with a report from CTV's Laura Lowe