Viterra expands | The company also plans to build in Grimshaw, Alta.
Approximately 150 southern Alberta farmer shareholders will vote Jan. 17 on an agreement to sell Lethbridge Inland Terminal to Viterra.
A purchase agreement for the 42,000 tonne grain facility was reached in late December, and the LIT board of directors is unanimously recommending that its shareholders approve the transaction. The price has not been disclosed.
LIT board chair Darcy Heggie said Jan. 2 that further details will not be revealed until shareholders review the information circular mailed Dec. 23 and then vote later this month.
“It’s a large deal and it’s very important to all parties involved and we just want to make sure that, when we talk, the shareholder meeting is behind us. Then we can give a better perspective on what’s happened and the future,” said Heggie.
LIT, the second largest farmer-owned grain terminal in the province, is located on a 220-acre property 20 kilometres southeast of Lethbridge near the junction of highways 4 and 845. It sits on a main rail line to the United States.
LIT also operates a fertilizer plant on the site, which is co-owned by UFA. It is unclear whether that is included in the deal, and Heggie said he was unable to comment on that point.
LIT received its first load of grain Aug. 28, 2008, after an 18-month construction period and an initial capital investment of $23 million.
Its shareholder members include individual producers, farm corporations and Hutterite colonies, all of which farm more than 1.5 million acres of land.
If the deal proceeds, LIT would be among Viterra’s largest terminals in Alberta.
Viterra president Kyle Jeworski said in a Dec. 28 news release that the terminal’s condition and location are major assets.
“This high quality terminal is ideally located and an excellent fit in our overall asset network,” he said.
“This further builds on our commitment to the province of Alberta and the grain industry in Western Canada, and is the latest in a series of investments we’ve announced over the last several months.”
Viterra announced in November that it plans to expand a facility at Grassy Lake, Alta., also in southern Alberta, and build a new high throughput terminal in Grimshaw, Alta., with total spending of more than $34 million.
LIT chief executive officer Norman Fodness said the proposed deal is the latest in numerous changes occurring within the grain handling industry.
“In general terms in Western Canada, there’s been lots of different things taking place in the last three or four years. There’s been the Viterra deal in itself,” he said, referring to the Regina company’s sale to Swiss commodity firm Glencore Xstrata slightly more than a year ago.
“The ag business on the grain handling side of the business has been pretty active for the last three or four years. This last three years, in my opinion, have seen more fundamental change than it’s ever seen and I don’t think the change is finished.”
LIT has 14 employees and Jeworski indicated they may join Viterra if the deal is approved.
“I think we’ve had a pretty customer service-oriented business model, and I think it’s Viterra’s intent to continue with that and enhance it in some ways,” Fodness said.