Export help for agribusiness

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Published: July 2, 1998

Gavin Semple would like to expand his eastern European export business.

But the president of Regina-based Brandt Industries, an implement manufacturer, said financing and insuring exports or entering into joint ventures in other countries can be a challenge.

Recently, representatives of the International Finance Corp. of the World Bank, the European Bank for Reconstruction and Development and the Export Development Corp. of Canada met with officials from agribusiness companies like Brandt, Saskatchewan Wheat Pool, AgrEvo, Flexi-coil, Canpotex and Canada Livestock Services to talk about these issues.

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The EBRD is already involved with Sask Pool’s joint venture in Gdansk, Poland.

“The bank’s role is to provide financing for that project,” explained Patrice Muller, director for Canada.

He said the bank will take up to 35 percent of a project on its own books and help line up more financing.

“The presence of the EBRD is quite important because it brings the level of comfort to other financial institutions that the due diligence work is being done appropriately,” Muller said.

Len Good, Canadian executive director of the World Bank, said the IFC takes an equity position in projects, puts together loan syndications and provides technological and financial advice. The IFC does not finance exports produced in Canada, but will assist with joint ventures in other countries.

“(The IFC) is basically there to support private companies who have an idea of what they want to do in a foreign country to make sure that the project unfolds as it should,” he said. “Increasingly, Canadian companies are actually looking to invest in those developing countries.”

Companies do have to think beyond exports, said Murad Al-Katib, financing services manager with the Saskatchewan Trade and Export Partnership, which sponsored the meeting.

“You do need to look beyond straight selling and getting out,” he said. “It’s not a sustainable type of activity.”

In the last 20 months, STEP has led eight trade missions to the World Bank, three to the EBRD and four to developing countries.

Al-Katib said the Regina meeting was “one more logical step in the progression of our activities towards getting our piece of the $30 or $30 billion a year pie that goes into these development projects.”

He also said while STEP first looks for sales opportunities in developing countries, joint “on-the-ground” ventures, either in manufacturing, partial manufacturing or assembly, are a logical next step.

Semple said 35 percent of Brandt’s sales are from exports, and 15 percent of that is in Ukraine and Russia.

He said these countries want to enter into joint ventures, but right now only some assembly is being done there.

“There’s a tremendous need for dryland farm equipment, but the restricting factor is the financial wherewithal to acquire it,” Semple said.

He added Brandt has a strategic plan to triple business in the next five years and exports will play a key role.

About the author

Karen Briere

Karen Briere

Karen Briere grew up in Canora, Sask. where her family had a grain and cattle operation. She has a degree in journalism from the University of Regina and has spent more than 30 years covering agriculture from the Western Producer’s Regina bureau.

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