The departure of Don Loewen from Saskatchewan Wheat Pool has removed an obstacle to the creation of a prairie-wide, Canadian-owned grain handling organization, says the chief executive officer of Agricore.
Gordon Cummings said previous discussions about a merger of the prairie pools foundered in part because of Loewen’s insistence that he had to be the chief executive of the resulting new company.
“He was of the view that there was only one person who was capable of being the CEO of the combined group, and that was him,” Cummings said in an interview last week. “So in that sense, an impediment is gone.”
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Loewen, who stepped down as CEO of Sask Pool June 23 after the pool’s board of directors asked for his resignation, could not be reached for comment.
Sask Pool president Leroy Larsen said he doesn’t think Loewen’s departure will have any impact on the prospects of a merger or alliance between the pool and Agricore in the future.
“I don’t think that makes a difference,” he said.
“I think there is a need for a merger or a joint venture or something that would accommodate the membership in all three provinces into one organization,” he said, adding that individually, the two companies are small players in an increasingly competitive and globalized world market.
But he emphasized that no proposal is on the table and there are no merger discussions under way.
Some grain industry observers have predicted that within a few years there will be only four large grain handling companies operating in Western Canada: Cargill, ConAgra, Archer Daniels Midland and one Canadian-owned firm.
David Schroeder, who follows the grain industry for Dominion Bond Rating Service, said Sask Pool and Agricore shouldn’t wait too long to get together.
“Right now there is a perfect complement between the two because they have very few elevators in competing markets,” he said. “But that’s changing. So the longer it takes, the less benefits there will be.”
Brian Oleson, an agricultural economist at the University of Manitoba, said that given the spate of mergers in the agribusiness world, it’s almost inevitable that the pool and Agricore would look at the idea again.
“It would be surprising if two co-operatives with a complementary client base weren’t at least giving serious consideration to it.”
Grain industry consultant Doug Campbell doubts the change at the top of the pool will make much difference.
“I just don’t think that’s fair,” he said.
“In my observation, particularly on the policy front, Sask Pool has consistently wanted to be in the driver’s seat on major initiatives.”
As Sask Pool goes through the process of hiring a chief executive, the board of directors will have to decide whether pursuing a merger will be part of the CEO’s mandate.
