A rebranding program is underway at 33 agricultural retail outlets in Alberta and Saskatchewan acquired by fertilizer maker and agricultural product seller Agrium Inc.
The 27 businesses in southern and central Alberta and six in southern Saskatchewan will bear the Crop Production Services (Canada) Inc. name within months.
The outlets have total annual revenues of about $162 million.
Although the businesses were acquired over a period of time, CPS western Canadian retail manager Tony Overwater said they are now being organized under the CPS brand and business model.
Read Also
Message to provincial agriculture ministers: focus on international trade
International trade stakeholders said securing markets in the face of increasing protectionism should be the key priority for Canada’s agriculture ministers.
Agrium’s U.S. retail assets also operate under the same banner.
“One company, one flag,” Over-water said.
As Agrium entered the western Canadian agri-retailer sector in 2005, it acquired the Engro fertilizer assets of Imperial Oil. Independent owners operated many of the outlets until last fall.
When Agrium took over, some people expressed concern about consolidation and loss of competition. Viterra has also been singled out for its ownership of nearly 250 retail locations.
David MacKay, president of the Canadian Association of Agri-Retailers, said there has been nothing to suggest less competition.
He said the Agrium acquisitions were no surprise and the organization would not take a position on what is better for the market.
“But if it results in regional oligopolies, of course CAAR would have concerns,” he said.
None of the sites will close, said Overwater, adding he hasn’t heard concerns about competition.
“We’re certainly not in the business of shutting down communities,” he said.
At the same time, there may be overlap as the business grows, he added.
Agrium senior director of investor relations Richard Downey also said that, at just 33 outlets, the company is still small in retail terms.
Last week’s announcement of the rebranding effort included the news that Agrium had acquired the remaining assets of five Engro franchise dealers and an existing joint venture that it previously did not own.
These include Parkland Agri-Services with nine locations in central Alberta. Agrium already had an ownership interest in Parkland. Overwater was also an owner.
In the last six months, Agrium has bought more than 60 farm centres in the U.S. and Canada, including 24 Agriliance outlets in Texas and New Mexico in December and four other independent U.S. outlets.
Total revenue from the acquisitions is more than $350 million.
Agrium chief executive officer Mike Wilson said in a release the company would continue to look for retail opportunities in Canada.
“Agrium has been in the retail crop input business in the U.S. for approximately 17 years under the brand name of Crop Production Services and this move into Canada is in line with our goal of doubling our retail EBITDA (earnings before interest, taxes, depreciation and amortization) in the future and providing further diversity in our retail business,” he said.
Acquisitions in the U.S. over the past few years have made Agrium the largest agricultural products retailer in North America.
Almost a year ago, the company launched a hostile takeover bid for Illinois-based CF Industries Holdings Inc., while CF made its own hostile bid for Terra Industries.
CF has a nitrogen fertilizer manufacturing plant in Medicine Hat, Alta., by virtue of its 66 percent ownership in Canadian Fertilizers Ltd., which owns the complex. Viterra owns the remainder of Canadian Fertilizers.
Last week, CF dropped its bid for Terra but Agrium continues to pursue CF, saying it will try to have its own directors named to the CF board at the company’s next shareholder meeting.
Agrium’s offer is worth $5.4 billion in cash and stock.
