WINNIPEG – The Canadian grain industry is ripe to be taken over by foreign owners, the head of Canada’s biggest private grain exporting company has warned.
Ken Matchett, chief executive officer of XCAN Grain Pool Ltd., said rapid deregulation is creating a highly competitive environment which may leave some domestic companies vulnerable to competition from big foreign firms.
“If we are not careful, Canada’s grain industry will be owned and operated by foreign companies like so many other Canadian industries,” he said. “This need not and should not happen.”
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Matchett told delegates attending the annual meeting of Manitoba Pool Elevators two weeks ago that by working together, XCAN and its owners, the three prairie pools, are big enough to prosper in the new environment. In fact, he said, they have no choice.
“Individually, the pools or any other Canadian company lacks the sheer size to #be a competitive factor in the global marketplace.
Survival of the fittest
“How well the established companies reduce their costs will determine whether they will be survivors or victims,” he said.
Meanwhile, Matchett told pool delegates XCAN shipped more grain and made more money in 1994-95. The company shipped 6.1 million tonnes of grains, oilseeds, special crops and byproducts in the year ended July 31, an increase of 19 percent over the previous year.
Those increased volumes combined with higher prices to produce gross sales of $1.8 billion, compared with $1.4 billion the previous year.
Consolidated net earnings, before patronage rebates and income tax, were $3.7 million, up from $1.7 million.
The biggest single commodity handled by XCAN last year was canola. The company shipped 2.6 million tonnes to buyers in Japan, Europe, the U.S., Mexico, China and Canada.
Shipments of oats were up 33 percent to 697,000 tonnes, representing 61 percent of total Canadian exports. Flax sales were up 38 percent to 430,000 tonnes.
Acting as an accredited exporter of the Canadian Wheat Board, XCAN also shipped 797,000 tonnes of malting barley and 470,000 tonnes of wheat and feed barley.
Special crop shipments totaled 455,000 tonnes, up 25 percent from the year before, and generated earnings of $635,000.
