There has been another ownership change in the Canadian pulse industry.
Global Food and Ingredients (GFI) has bought three of Canpulse’s four Saskatchewan processing plants that have more than 300,000 tonnes of combined annual processing capacity.
The deal includes pea and lentil cleaning and bagging plants in Zealandia and Lajord and a lentil, chickpea and canaryseed plant in Sedley. The Lajord facility also processes flax.
Canpulse is owned by Globeways Canada, which in turn is owned by Hakan Group Company, a major player in the global pulse industry based out of Dubai, United Arab Emirates.
Canpulse will continue to operate its one remaining facility in Kindersley.
GFI is a start-up company out of Toronto formed by former employees of BroadGrain Commodities.
Jason Phillips, vice-president of operations with GFI, said company president David Hanna, former chief financial officer with BroadGrain, identified an opportunity in the processing sector.
“There’s a gap in the market. Everyone ran out and bought their own facilities,” said Phillips.
GFI believes there is room for a different approach. The company intends to operate the three plants primarily as toll processing facilities, leaving most of the origination and marketing of the peas, lentils and other commodities up to its business partners.
It will make its money by charging a per bushel fee for cleaning product and taking care of the logistics of getting it to an end destination in Canada such as a transloading facility at one of the ports.
“Our mandate is to optimize facility utilization,” said Phillips.
“We’re pretty confident that we will be running these facilities at least twice as hard as they were before.”
The Canpulse sale comes on the heels of the dispersal of the assets of now defunct Ilta Grain to ETG Commodities, Viterra and DG Global Inc.
Carl Potts, executive director of Saskatchewan Pulse Growers, said the entire pulse sector is facing financial challenges due to the loss of the Indian market.
Reduced acres, production, exports and prices are hurting everyone, including processors and exporters.
“It’s my understanding that it’s difficult times for not only farmers but for those companies as well,” he said.
Potts said the industry is focused on developing new, stable markets like plant-based proteins rather than putting much effort into unpredictable traditional markets like India.
But there are signs that the situation in India could be changing.
“We think some of the fundamentals on demand and needs to import should be there,” said Potts.
GFI plans to leave most of the marketing of the pulses it processes up to its business partners, whether that be to India or elsewhere.
Globeways has agreed to continue contracting product out of its three former facilities.
GFI is in the advanced stages of signing a toll processing agreement with another as yet unnamed company.
The goal is to eventually contract out most of the production running through the plants. But the company will also be developing its own trading department, as well as doing spot processing for other small players in the industry.
Phillips said the Kindersley facility was too large to be a good fit for GFI’s current operating model.
“We want to focus on not biting off more than we can chew, so the three smaller facilities made sense for us,” he said.
The plan is to invest in new processing lines and refurbish existing lines at the plants in order to increase output.
Future investment may involve expanding into value-added processing such as splitting, sizing and colour sorting.