CALGARY – Alberta Pool earned $4.3 million in the 1993-94 crop year, but executives say that’s not enough to support the company’s plans.
How the co-operative will achieve its goal to earn $25 million in the current crop year was debated during closed-door sessions at the annual meeting in Calgary Nov. 21-26.
Additional money is needed as the pool reduces its country elevator network from 250 to 100 and replaces many of them with more efficient facilities.
As well, the pool is working on improvements to its west coast terminal.
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The pool wants to invest $100 million in its operation in the next five years. Company president Alex Graham said farmers can’t foot the entire bill.
Graham told reporters that listing the pool on the stock market is just one option to accumulate needed capital. But it’s not the only idea and a decision won’t be made right away as to whether the company should offer publicly traded shares.
The money could come from several sources. Large institutional investors are one possibility. Agriculture is reasonably stable and provides a steady income.
“Investors are always interested in putting their funds where they can get a reasonable rate of return,” said Graham.
One of the least favored options among members is to borrow and take on a greater debt load.
Another choice is to draw money from the membership. However, Graham said membership is declining in proportion to the drop in rural population. Members are also growing older and want paybacks on equity they have in the company, which places a greater strain on the pool’s finances.
Besides looking for outside money, the pool plans to continue its diversification strategies and investments in the food industry.
“Our plan is to go further up the value-adding chain,” said chief executive officer Garry Dewar.
Sales and handlings were up to build last year’s healthy financial picture. Total grain handling from 1993-94 was 6.2 million tonnes, up from 4.9 million tonnes the previous year. This bumped the pool’s market share to 58 percent of the Alberta market.
Growth of special crops was up 370 percent over last year. Of those crops, peas were the best performers with tonnage up 251 percent. With such good supplies, the pool decided to set up a pea processing plant near Camrose.
Pool top seller of non-board grains
Overall, Alberta Pool was the largest seller of non-board grains in Canada with sales of 3.7 million tonnes.
Certified seed sales have also been good. Sales of the seed are part the Ultrabred breeding program which netted the company $9.8 million in sales, up 26 percent from the previous year, reported Dewar.
Alberta Pool was the first to distribute a genetically engineered herbicide resistant canola.
