Two western grain companies have sold their shares in canola crusher
Canamera Foods Ltd.
Central Soya Canada Ltd., which had owned half of Canamera, paid $88
million for the rest of the business last week. The other half had been
owned 33.3 percent by Saskatchewan Wheat Pool and 16.7 percent by
Agricore United.
Canamera was created in 1992 when the then partners in CSP Foods of
Saskatoon, Manitoba Pool Elevators and Saskatchewan Wheat Pool, spun
off the three CSP oil crushing facilities, two refineries and various
Read Also
Powdery mildew can be combine fire risk
Dust from powdery mildew can cause fires in combines.
packaging and storage facilities into a new partnership with Central
Soya of Canada Ltd. Central Soya is owned by food processing giant
Ferruzzi Group of Ravenna, Italy.
At the time, the oilseed crushing industry was in hard times. Central
Soya brought to the new company a Hamilton, Ont., soybean operation and
international connections.
The new partnership also acquired the assets of the edible oil division
of the newly merged Maple Leaf Mills and Canada Packers, adding another
crushing plant plus refining, packaging and processing facilities.
Canamera instantly became the largest oilseed processor in Canada and
continued to expand. It now has crushing facilities in Fort
Saskatchewan, Alta., Nipawin, Sask., Harrowby and Altona, Man., and
Hamilton, Ont., along with a canola refinery at Wainwright, Alta.
SWP chief executive officer Mayo Schmidt said the history of Canamera
was an important consideration when selling its one-third share.
“Canamera is profitable. But we never had access to any of the
earnings. Those were all reinvested in growing the company. That can be
great unless you need access to some cash from your asset,” he said.
SWP will use the expected $59 million from the sale to reduce its debts.
Company representatives say the $132 million in debt repayments that
SWP needed for 2001-2002 have now been raised, in part through the sale
of assets such as Canamera, Western Producer Publications, Heartland
Livestock, Heartland Livestock Services and CSP Foods Ltd.
Brian Hayward, AU chief executive officer, said his company will also
use the money to pay down debt.
The sale is subject to approval by the federal competition bureau.
During the merger of United Grain Growers and Agricore, the bureau
identified Canamera as a problem area for the new organization.
Oilseed crushing in Canada has few players and the major UGG
shareholder, Archer Daniels Midland, is one of them and is a competitor
to Canamera.
As a condition of the merger, the bureau required strict
confidentiality by Agricore United in its operations of Canamera.
Gary Timlick of AU said tough times in the oilseed crushing business
also played a role in the sale.
“The industry is awash in soybean oil right now. Canola prices are
relatively high, making soybean tough to beat in some markets …. it
can be a volatile industry and it isn’t a core business for us,”
Timlick said.
Schmidt also said his company did not view oilseed processing as core
to Sask Pool.
If approved, the sale will be complete on July 31.
Should Canamera record any losses before that date, it will reduce the
sale price paid to the grain companies by that amount.
