With an eye on a farmer-ownership model for its own business, the grain company formerly known as the Canadian Wheat Board has bought a minority stake in a farmer-owned grain handler.
Winnipeg-based CWB on Thursday announced a “private agreement” with western Saskatchewan’s Prairie West Terminal (PWT) to buy 2,394 shares, a stake of 10.02 per cent, for an undisclosed sum.
“This investment is a great opportunity to participate in an innovative farmer-owned organization that prioritizes farmers’ interests,” CWB CEO Ian White said in a release.
PWT was set up in 1998 as a joint venture with grain handler Agricore United (AU, now part of Viterra) to build an inland terminal between Dodsland and Plenty, Sask., about 70 km northeast of Kindersley. AU sold its 50 per cent stake to PWT’s farmer-owned company in 2002.
PWT now includes five locations:
- “the Concrete,” its main terminal on the Canadian Pacific rail line between Dodsland and Plenty, with almost 47,000 tonnes of storage capacity for all commodities, a 112-car rail spot and a crop inputs dealership;
- a 12,420-tonne capacity handling operation, owned by PWT since 2009 at Kindersley, including a wooden elevator and steel bin annex, a 50-car spot and a crop inputs dealership;
- a 7,340-tonne capacity wooden elevator at Plenty, which PWT bought in 2001 and now takes in malting barley exclusively;
- a 5,500-tonne capacity wooden elevator at Dodsland, also bought in 2001 and now handling barley, canola, flax and lentils;
- a wooden elevator with a steel bin annex for total capacity of 6,170 tonnes, bought in 2008 at Luseland, about 75 km north of Kindersley, handling all commodities.
PWT’s sites, which employ over 30 people in total, together move over 420,000 tonnes of grain per year, the company says.
The investment follows CWB’s announcement in November that it would buy grain handling and port terminal assets from the Soumat arm of Toronto’s Upper Lakes Group, including the company’s Mission Terminal business, also based in Winnipeg.
Mission Terminal had already owned 500 shares of PWT, which now bring CWB’s total stake to 12.11 per cent.
In the wake of its legislated deregulation in August 2012, which ended its single marketing desk for Prairie wheat and barley, CWB says it’s crafting a plan for farmer ownership which would allow farmers to have an “equity interest” in CWB once it’s fully privatized.
“We value farmers as owners and partners,” White said Thursday. “Both our farmer ownership plan and our investment in a farmer-oriented company like (PWT) are prime examples of that.” — AGCanada.com Network