With the stroke of a pen Richardson International has become the biggest vegetable oil and canola oil company in the United States.
The Canadian grain company purchased the Wesson cooking oil brand from Conagra Brands along with a 280,000-sq.-foot production facility in Memphis, Tennessee.
“We’ve always been a big player in the canola business,” said Jean-Marc Ruest, Richardson’s senior vice-president of corporate affairs.
“Now we become a huge player in the canola oil packaging business.”
Financial terms of the deal were not disclosed.
There are 123 employees at the Memphis plant, and another 40 to 50 new jobs will be created in Winnipeg to manage the Wesson business.
Wesson is the leading cooking oil brand in the U.S. and by far the leading canola oil brand on grocery store shelves.
“The Wesson brand is such a well-known brand in the U.S. that you become a real player in that field through one transaction,” said Ruest.
Not that long ago all of Richardson’s assets were in Canada, but that changed in 2013 when the company acquired more than $800 million of Viterra’s assets, including an oat processing plant in South Sioux City, Nebraska.
The company’s second foray outside of Canada was its purchase of European Oat Millers in Bedford, England.
Ruest said those two international ventures gave Richardson the confidence it needed to pursue Wesson when it became available.
“This opportunity came along where we said, ‘this is completely what we do in Canada in the packaged oil business,’ ” he said.
“It was a terrific opportunity to expand that business into the U.S. in a real meaningful way.”
Richardson operates canola crush and refinery facilities in Yorkton, Sask., and Lethbridge and packaging plants in Lethbridge and Oakville, Ont., where it bottles oil in addition to packing margarine and shortening.
The products are sold under Richardson’s Canola Harvest, Mirage Margarine and Crystal Margarine brands as well as a number of third party private label brands.
Ruest said Richardson sees tremendous growth potential in the packaging side of the canola business.
It intends to use its under-construction $30 million food innovation centre in Winnipeg to create new and improved products that will be sold through the Wesson brand. The centre will be up and running in 2020.
“The opportunities are very interesting, very compelling,” he said.
Ruest said Canadian canola growers will benefit from a Canadian company owning a facility that consumes so much canola oil.
“To have a company like ours that is motivated in growing the canola business, that’s a good thing downstream for producers of canola,” he said.