Agropur is getting a second nine-figure cash injection from a group of Quebec institutional investors and banks, further backing the major Quebec dairy farmer co-operative’s expansion plans against an uncertain domestic market.
The investor group, led by Caisse de depot et placement du Quebec (CDPQ), said Thursday it will put up $300 million, on top of the $470 million it pledged in December last year.
CDPQ on Thursday announced it would invest $150 million, along with $37.4 million from National Bank, $35.2 million from development capital fund Fonds de solidarite FTQ, $32.4 million from provincial investment firm Investissement Quebec, $25 million from Capital regional et cooperatif Desjardins (CRCD) and $20 million from economic development agency Fondaction CSN.
The new investment from CDPQ, which manages funds mainly for public and parapublic pension and insurance plans, raises the Caisse’s own stake in Agropur to $300 million.
Marc Cormier, CDPQ’s executive vice-president for fixed income, said the Caisse’s investment is “an integral part of our strategy aimed at furthering the development of high-performing Quebec businesses.”
Noting Agropur’s recent growth has been based outside Quebec, Normand Chouinard, executive vice-president for investments at Fonds de solidarite FTQ, said that growth has “contributed to the consolidation of Quebec jobs at Agropur and its thousands of dairy producers.”
The co-op’s acquisitions have slowed in recent months, but in 2014 included Sobeys’ former Safeway dairy plants in Western Canada and New Brunswick dairy processing co-ops Dairytown and Northumberland.
Agropur, whose dairy brands include Natrel, Quebon and Island Farms, also spent over $100 million on upgrades at its Lethbridge, Alta. and Oka and St-Hyacinthe, Que. plants, plus new lab and head office space at Longueuil, Que.
During 2015, Agropur announced plans to close milk plants at Chilliwack, B.C. and St-Bruno-de-Montarville, Que., and pledged upgrades for the former Safeway milk plant at Burnaby, B.C.
Agropur president Serge Riendeau in October warned of domestic dairy market uncertainty stemming from Canada’s concessions on dairy access in the Trans-Pacific Partnership (TPP) trade deal.
Giving up 3.25 per cent of the Canadian dairy market to imports from TPP countries, on top of the two per cent granted under Canada’s free trade deal with the European Union, “means an increase in dairy imports that will replace more than five per cent of our domestic production in the first five years that the agreements are in effect,” he said.
The co-operative said at the time it intends to “continue seizing all opportunities for development in order to remain a major player in the North American market.”
When the investor group announced its previous cash injection late last year, Riendeau said the co-op “plans to continue its development in high-potential Canadian, U.S. and global markets.” — AGCanada.com Network