Poor margins in the pea, lentil and bean processing business hurt the financial results for one of Canada’s leading special crops processors.
Legumex Walker Inc. posted earnings before interest, taxes, depreciation and amortization (EBITDA) of $1.5 million on 2012 sales of $295 million.
“We can do significantly better than that and our hope is that we’ll prove that in 2013,” said company president Joel Horn.
EBITDA was reduced in part by costs associated with a series of acquisitions the company made in the bean, sunflower, flax and birdseed processing business in Canada and the United States.
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It was also adversely affected by disappointing margins in the company’s core business.
The average pea and lentil processing margin for 2012 fell to $68 per tonne, from $89 per tonne the previous year, while bean processing margins averaged $134 per tonne, down from $196 per tonne in 2011.
Bean processing margins were hurt by the high-priced inventory the company inherited through the acquisition of the St. Hilaire Seed Company Inc., a Minnesota bean processor. Bean prices plummeted shortly after that purchase.
On March 19, Legumex Walker shipped its first rail car of food grade canola oil from its Pacific Coast Canola facility in Warden, Washington.
The company expects the plant to be operating at its full capacity of 374,000 tonnes per year by mid-2013.
The plant will need to source seed from about 300,000 acres of canola. It expects that much canola will be grown in the western U.S. in two or three years but in the meantime it will need to source product from North Dakota and Southern Alberta.
