Winnipeg grain handling equipment maker Ag Growth will buy a plant in eastern Indiana to boost its manufacturing space in its core U.S. market and ease the pressure to try and find workers in Western Canada.
The income trust announced Tuesday it had exercised a US$850,000 option to buy the 160,000-square foot plant at Union City, just west of the Indiana-Ohio state line, northwest of Dayton.
The company said the area would provide “ready access to labour” and “help alleviate labour constraints in Western Canada.” It would also help lower Ag Growth’s “foreign currency exposure” as the Canadian dollar appreciates against the U.S. greenback.
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Ag Growth didn’t specify what it plans to make at Union City. The company’s divisions include auger makers Westfield of Rosenort, Man. and Wheatheart of Saskatoon, Calgary grain bin manufacturer Twister, belt conveyor makers Batco of Swift Current, Sask. and Hi Roller of Sioux Falls, S.D., and grain drying equipment firm Edwards Group in Alberta.
Ag Growth cited Hi Roller’s “outstanding” results, in particular, as boosting the parent company’s third-quarter numbers, which it also released Tuesday.
Hi Roller, which Ag Growth bought at the end of 2006, “successfully leveraged its brand name and market share to take advantage of surplus demand created by the ethanol industry expansion,” the company said in a release.
That said, Ag Growth noted its U.S. sales of augers, belt conveyors, and aeration equipment saw “exceptional” growth by $5.9 million in the quarter due to the increase in corn acres, increased on-farm storage, “positive market sentiment” and higher crop prices — and despite the recent appreciation of the Canadian dollar.
If the dollar had remained at the average exchange rates seen in 2006, and with all other factors remaining constant, sales (excluding acquisitions) for the quarter would have been up $900,000, the company noted.
The income trust reported Q3 net earnings of just under $9 million on $40.8 million in sales, up from $5.77 million on $22 million in sales in the year-earlier period. Higher earnings were partly offset by increased expenses at the corporate level, the company said.
