The story of how a quiet regional grain company evolved into an international player in the world market
The Richardson International empire is an accidental giant, a cautious and careful operator, one that finally feels like taking on the world.
“We are competing with the behemoths of the industry,” Richardson International chief executive officer Curt Vossen said in early April after the announcement of its new food innovation centre.
“We accept that challenge and now we are taking that challenge into businesses that we are learning as we go.”
It might have surprised western Canadian farmers to hear Vossen describe Richardson as “for all intents and purposes a regional company,” considering that it is Canada’s biggest grain company, but in the world of the international grain and food exports and processing business, Richardson pales in comparison to Bunge, Louis Dreyfus, Archer Daniels Midland and Cargill.
That might be changing as Richardson becomes more confident now that the acquisitions of the past 20 years have turned out well.
“We’ve liked it,” said Vossen.
“We’ve liked the experience.”
Richardson’s almost accidental rise to prominence came despite a long history of caution and prudence with Richardson companies resisting the urge for excessive expansion into new terminals and other businesses that infected the prairie wheat pools in the 1990s.
Richardson ended up owning a major canola processor in 1999 due to a forced sale of Canbra Foods, which had been majority owned and controlled by Alberta investor Peter Pocklington but who had been forced by Alberta Treasury Branches to put his controlling stake on the market. Richardson bought the stake and became a significant food processor overnight.
“We didn’t know diddly about crushing canola, refining canola, making margarine. We had to learn it,” said Vossen.
In following years Richardson ended up with a much bigger grain elevator network as competitors failed, left the market or merged, with survivors selling out or forced to sell parts of their systems to fit in with federal Competition Bureau demands. Richardson again was a buyer of facilities previously owned by ConAgra and the prairie farmer grain co-operatives, with Saskatchewan Wheat Pool’s takeover of Agricore United leading to Richardson picking up dozens of AU facilities.
In 2010, the company made its biggest investment ever with the construction of a major canola crushing plant in Yorkton, Sask., but that did not take it too far from its core grain handling and oilseed crushing businesses.
However, in 2013 Richardson went far beyond its traditional comfort zone in acquiring Can-Oat Milling as its part of an $800 million package of Viterra assets that Richardson took in a three-way takeover of Viterra with Glencore and Agrium.
Once more, overnight, Richardson became a major player in an industry in which it had no previous presence. It was now North America’s biggest oat miller.
Oats have taken Richardson into ownership of facilities in the United States and the United Kingdom, and that’s been a pleasant experience so far, enough so that the company hopes to expand its outside-Canada presence.
“Our goal isn’t to be strictly a Canadian company,” said Vossen.
“Why? Because the market is a global market and my customers want me to have the opportunity for arbitrage, for optionality. They want me to be able to find a solution.”
Richardson’s reputation 20 years ago, with Pioneer Grain being its biggest presence on the Prairies, was that of a dull company that did not try to dominate its business or draw public attention. It was a quiet company, happy to profitably run its share of the business.
It seems very different today, especially with its decision to build a shiny and attention-grabbing food innovation centre near Portage and Main in Winnipeg in the heart of the Canadian grain industry.
Vossen acknowledged that the company was deliberately drawing attention to itself with the new facility as part of it making a statement that it has grown beyond its previous modest self.
“You could have put (this facility) in a box. You could put it in a box in an industrial park. You could tack it onto the side of a production facility,” he said.
“But that’s not the point. The point here is that we want to make a statement … about who we are as a company and who we define ourselves with our customers as being.
“We’re a proud Canadian company. We’re competitive. We want to bring the best technology and solutions to those customers we possibly can. We’re going to do it the way we do everything else: in a very practical but an elegant way.”