The president of Schreier Malting Co. says selling the family business to Cargill is in its best long-term interests.
Thomas Testwuide, Sr. said the deal, which is expected to close the first week in January, should not affect jobs at Prairie Malt in Biggar, Sask.
Schreier owns a 51 percent share of Prairie Malt. Saskatchewan Wheat Pool owns 42.4 percent.
“With the consolidation of the world brewing and malting industry, and the need to focus on further growth in Asia, and China specifically, I believe that tying with a very strong partner was the best decision,” Testwuide said in a telephone interview from Wisconsin.
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He said large companies like Cargill and ConAgra will dominate the malt industry in the future. Schreier’s malt production capacity is 415,000 tonnes a year.
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The deal for all of Schreier’s shares will increase Cargill’s annual malt production capacity to nearly 1.5 million tonnes and make it one of the world’s largest malting companies, said Frank Karsbergen, president of the malt division.
Schreier is a privately held company, founded in 1856. Testwuide is the fifth generation at the helm.
He admitted it was difficult to make the decision to sell.
“But I believe it’s the right decision,” he said.
Aside from Prairie Malt, Schreier includes a production facility at Sheboygan, Wis., an elevator and procurement office in Minneapolis, and a 45.3 percent controlling share of CUC Malt Ltd.-Nanjing, in China. Prairie Malt also has an interest in the Nanjing operation.
Testwuide said the Biggar operation is passing into good hands.
“The people at Prairie Malt should be very proud of what they accomplished and very confident in the long-term future of their company,” he said.
He will serve as a director of both Prairie Malt and CUC Malt Ltd.-Nanjing, as well as Ladish Malting Co., a wholly owned U.S. subsidiary of Cargill.
Bill Hunt, executive vice-president of Saskatchewan Wheat Pool’s food and industrial group, said the company has no qualms about having Cargill as a partner at Biggar.
“We believe it will be business as usual,” he said.
“We have partnerships with Cargill in other places. Cargill will be a strong partner – financial strength, marketing strength, trading strength – and so we believe there will be good things in the future for Prairie Malt.”
