Multinational company makes inroads on Prairies | Grain transportation causes headaches
A new entrant in Canada’s pulse processing sector is already looking to expand its operations.
Agrocorp International opened its $11 million high-speed pulse processing plant in Moose Jaw, Sask., last year and recently acquired a smaller facility in Innisfail, Alta.
“The two investments in Canada have been game changers for us,” said Vijay Iyengar, chair of the Singapore based company.
“We are looking to expand our operations in Canada.”
Agrocorp handles three million tonnes of grain in 11 countries, including 800,000 tonnes in Canada.
The company’s Moose Jaw facility has the capacity to handle 250,000 tonnes of grain per year. The Innisfail plant is smaller but closer to port position. The remainder of the Canadian crops marketed by Agrocorp are bought from other processors.
The company has operated a Vancouver exporting office since 2009.
Pulse crops are Agrocorp’s bread and butter, but it also sells other grains, sugar and oilseeds to customers in 30 countries.
Iyengar said the investment in the Moose Jaw plant allowed the company to forge a closer relationship with the farmers who supply the product.
“We are looking at a couple of more proposals and projects that we are evaluating at the moment,” he said during an interview at the 2014 Sask-atchewan Agriculture Trade Summit.
Iyengar said the company is considering acquisitions, new projects or a combination of the two.
He said the Canadian investments have been a mainly positive experience.
He appreciates the engagement of provincial and federal governments in Canada’s agriculture sector and marvels at the ability to access the provincial and federal agriculture ministers at an event such as the summit, which is rare in other countries.
However, Iyengar wasn’t throwing out only bouquets. He said Canada’s transportation bottleneck is costing Agrocorp business and keeping its Moose Jaw plant from operating at full capacity.
He said the company ships 90 percent in bulk, and pulses are at the bottom of the bulk shipping hierarchy, below crops such as wheat and canola.
“This year has been a difficult year for players like us,” he said.
It hasn’t been any easier for Agrocorp’s customers.
“The buyers in the special crops markets tend to be smaller buyers. They need an efficient supply chain. It has really been a big issue for them,” he said.
Customers used to purchasing supplies two months forward now have to buy six months in advance. Some buyers are forced to double or triple their purchases to assure adequate supply, which could cause disorderly markets and increased price volatility.
Iyengar thinks growers in France and Russia could be increasing pea production in response to Canada’s transportation problems, which could force Canada to find new markets for its pulse crops.
He also expressed frustration with the lack of workers in Saskatchewan and the difficulty in hiring experienced workers from some of the company’s other locations around the world.
Iyengar would like to see more government co-operation on issuing work visas.
“Some of the local governments also probably may need to become more business friendly,” he said.