A third year of strong operating results is a tough act to follow, said the chief operating officer of Western Co-operative Fertilizers Ltd.
Douglas Cooper said the company, owned by the three prairie pools, made $192 million in operating earnings and doubled sales during the past three years.
“Although the fertilizer business environment will not likely continue to be as strong as that experienced in recent years, Westco will now be able to remain profitable,” Cooper told delegates to Manitoba Pool Elevators’ annual meeting.
He said the company has emerged from its financial problems in the 1980s and is ready to grow.
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In 1996-97, Westco had gross sales of $328 million, up from $287 million the year previous. The company surged past the one million tonne mark in sales for the first time. It sold 176,000 tonnes of fertilizer through Manitoba Pool, an increase of 21 percent from the year previous.
Net earnings rose $3 million to $61.4 million. Cooper said the bulk of Westco’s earnings come from selling ammonia and urea fertilizers from the Canadian Fertilizer Ltd. plant in Medicine Hat, Alta.
Westco owns 34 percent of the plant, giving it a secure, low-cost source for nitrogen products, he said.
The company shelled out $58 million in patronage dividends to the pools, with almost $11 million going to Manitoba Pool.
Fertilizer sales have been strong in the 3.67 million tonne market in Western Canada, with total demand up 10 percent last year, said Cooper.
“There’s no doubt that Westco’s strong earnings over the past three years have also been a result of the cyclical strength in fertilizer price that we’ve experienced during this period,” he said.
