New owners settle in | Immediate focus will be staffing, administration and pending sale of assets
Canada’s largest grain handling company entered 2013 with new Swiss owners, but the Viterra logos on country elevators will likely stay in place for a while.
Officials with Glencore International are saying little about what changes, if any, will be implemented at country elevators that were formerly owned and operated by Viterra.
Instead, executives with the Swiss company say they will familiarize themselves with their new assets, consult with senior managers at Viterra and focus their efforts on addressing immediate issues related to staffing, administration and the pending sale of assets to Richardson and Agrium.
After a lengthy regulatory review process, Glencore announced Dec. 17 that it had completed the acquisition of the Regina-based grain company, whose Canadian assets included 258 retail crop input facilities, seven port terminals and 92 primary grain elevators, including 49 in Saskatchewan, 25 in Alberta and 16 in Manitoba.
The $6.1 billion acquisition also included former Viterra assets in the United States, Europe, Asia and Australia.
Glencore officials declined to be interviewed, but the company said in a Dec. 17 news release that the acquisition of Viterra gives Glencore “immediate critical mass” in North American grain markets and a greater presence in Australia, where it was already one of that country’s largest grain buyers.
“By combining Viterra’s first class assets, grain logistics and processing insight with our global marketing capability, we have the opportunity to become a true leader across the sector with even greater means to meet the needs of farmers and customers globally,” Chris Mahoney, Glencore’s director of agricultural products, said in the release.
The company stated that it plans to complete deals to sell selected Canadian and Australian assets to Agrium and Richardson International in 2013.
Richardson, Canada’s second largest grain handling company, has an agreement with Glencore to acquire 19 western Canadian elevators formerly owned by Viterra, as well as the following assets:
- A 25 percent ownership stake in the Cascadia Terminal in Vancouver.
- Full ownership of a Viterra grain terminal in Thunder Bay, Ont.
- Can-Oat Milling facilities in Saskatchewan, Alberta and Manitoba.
- Full ownership of 21st Century Grain Processing, which has oat and wheat milling facilities in Nebraska and Texas.
Richardson announced Dec. 20 that it had received all necessary regulatory approvals in Canada to proceed with the deal.
The company will be working with Glencore to close the deal as soon as possible.
“We are pleased to finalize this deal and acquire these assets, which will allow us to provide western Canadian farmers with more choice in the marketplace and improved access to products and services,” said Curt Vossen, president of Richardson International.
Agrium, meanwhile, is expected to acquire 232 Viterra farm retail outlets in Canada and a handful of farm retail outlets in Australia.
Both deals require government approval.
Glencore also confirmed that Fran Malecha, former chief operating officer with Viterra, has been appointed as the company’s director of agricultural products for North America.
Glencore indicated when it announced plans in early 2012 to acquire Viterra that some Viterra employees in Calgary would be relocated to Regina.
Twenty to 30 senior management positions are expected to be relocated to Regina from Viterra’s offices in Calgary. In addition, 30 to 40 percent of Viterra’s 485 head office employees in Regina could be affected by the sale of assets to Richardson and Agrium.
Most of Viterra’s former country workers, including 1,600 in Saskatchewan, are expected to retain their jobs, according to a review of the takeover commissioned by the Saskatchewan government and conducted by Informa Economics.
Glencore officials also assured Saskatchewan government officials on other areas of concern:
- It will make the Regina head office headquarters for Glencore’s North American operations.
- It will increase Viterra’s projected capital expenditures in Canada by more than $100 million over five years.
- It will invest $8 million more in research and development initiatives, above Viterra’s projected expenditures.
- It will contribute to unspecified grain industry initiatives in Manitoba.
- It will increase contributions by 25 percent toward programs that support the western Canadian farm community.
- It will make charitable contributions in support of youth and to provide scholarships to First Nations and Métis students.
- It will contribute to the Saskatchewan government’s Global Institute for Food Security.
Richardson will acquire five primary elevators in Alberta, 10 in Saskatchewan, two in Manitoba and two in British Columbia.
The new elevators will boost Richardson’s total primary elevator capacity in Canada to nearly two million tonnes, or 17 percent, up from the current 1.5 million tonnes, or 13 percent.
Glencore will remain Canada’s largest grain company with total primary elevator capacity of 2.4 million tonnes, or 22 percent.