A shuttered railcar factory in northern Nova Scotia could be turned into an ethanol plant.

Atlantec BioEnergy plans to open a plant on the TrentonWorks site in Pictou County by fall 2009.

The company hopes to convince Nova Scotia farmers to produce 6,070 hectares of sugar beets, which would be converted into ethanol for sale to East Coast refineries.

"The situation for the farmers here is really dire," company chairman Paul Wheaton said Thursday. "They need some help and this will be a great benefit to the local farmers."

The railcar plant in Trenton closed last year, putting 300 people out of work. Ernst and Young Inc., which has been hired to oversee the sale of the plant and its assets, has been looking for a buyer for months.

Wheaton said the site is a prime location for the new venture.

"We have rail in Nova Scotia, we have water, we have the highway system and there's more land here that's available," he said.

Wheaton said the ethanol plant would create 45 jobs and involve more than 100 farmers, and the federal government is providing a setup grant through Sustainable Development Technology Canada.

"They test the technology," he said. "They reviewed us for 10 months and they liked the process and what we were doing enough to give us a grant."

Atlantec BioEnergy planned to open an ethanol plant in Prince Edward Island, but it didn't get approval from the provincial government.

In March, P.E.I. Premier Robert Ghiz said his government was reviewing the pros and cons of such a plant and he wanted to ensure there was enough public consultation on the subject.

The Council of Canadians has spoken out against the project, saying it's harmful to the environment and groundwater.

Wheaton said he was pleased with the results of a test sugar beet production on 200 hectares in Nova Scotia this summer.

The company has set a production target of 13 million litres of ethanol per year.