Blue Hills Ventures | Legumex Walker says increased processing capabilities within the company prompted sale of shares
Legumex Walker Inc. has sold its minority stake in one of Saskatchewan’s largest pulse processing plants.
The company sold its 20 percent share in Blue Hills Processors (2003) Ltd. back to Blue Hills Ventures, a farmer owned company that now owns 100 percent of the Avonlea, Sask., plant.
“Our relationship with Blue Hills has served us well for a number of years as we’ve been both a substantial minority investor and, at times, its largest customer,” said Anthony Kulbacki, Legumex Walker’s chief financial officer.
“Because of our progress in optimizing our own processing capabilities, we will be better positioned to meet our processing needs through internal resources,” he said.
Read Also
European wheat production makes big recovery
EU crop prospects are vastly improved, which could mean fewer canola and durum imports from Canada.
“As a result, it’s the right time to monetize our investment in Blue Hills and redeploy the capital elsewhere.”
The return was $1.8 million on an investment that originally cost Walker Seeds Ltd. $440,000 in 2003.
Blue Hills director Bill Nelson said it will be business as usual for plant customers.
“It shouldn’t affect anybody that has been dealing here. We’ll have the same type of bids that we’ve always had,” he said.
Walker Seeds was an essential customer when the plant first opened its doors, but these days Blue Hills deals with another 10 exporters.
“It’s not like it’s going to put us out of business. We still have lots of volume going through,” said Nelson.
The most pulses the company has processed in a year is 90,000 to 100,000 tonnes, but there is a significant amount of unused capacity.
Nelson thinks the plant could be an attractive target for another buyer because it is situated in Saskatchewan’s second largest lentil growing region.
“We assume that may attract some interest, but to date we haven’t had anybody that has been knocking on our door. But I think there was a perception that it was a Walker plant before and this may change that perception,” he said.
He is not sure if the farmer shareholders would be interested in selling the facility.
“If somebody came with enough money, I mean everything is for sale for a price,” said Nelson.
Business has been slow lately because importers are having a tough time accessing credit due to the European banking crisis.
“There’s just not enough money around right now to fill the shelves. They’re buying hand to mouth,” said Nelson.
“We expect (sales) to be back by fall. We think that people can only go so long without food. Eventually you have to fill your shelf.”
