Leadership transition | Pulse business struggles but Legumex Walker expands into new areas
One of the pioneers of the pulse and special crops industry is exiting the business.
Dave Walker has retired as chair of Legumex Walker Inc., one of Canada’s largest pulse processing firms.
His replacement is Bruce Scherr, chair and chief executive officer of Informa Economics Inc.
Walker spent nearly three decades in the special crops business building Walker Seeds into one of Canada’s leading special crops firms.
“With the combination of Walker Seeds and Roy Legumex Group and our transition to a public company complete, I now look forward to the next phase in my life and the opportunity to spend more time with family and devote more attention to my farming and investment interests,” said Walker in a news release.
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Legumex Walker president Joel Horn thanked Walker for his leadership during a conference call announcing the company’s first quarter results for 2012.
It was another disappointing quarter for the newly formed public corporation.
“There’s no doubt that the global market situation for special crops is still a difficult one. Volatility and political instability in some of our traditional markets persist,” Horn told investment analysts.
Buyers are reluctant to purchase in that environment, but Horn thinks that attitude is about to change.
“People need to eat and we are told that inventories are being depleted. Buyers will come back to the market,” he said.
Sales for the first quarter of 2012 were $65.8 million, up from $62.4 million during the fourth quarter of 2011. Earnings before income, taxes, depreciation and amortization were $2.2 million, down from EBITDA of $2.7 million in the last quarter of 2011.
The company’s newly acquired bean and sunflower seed processing assets in Minnesota contributed $4.3 million in sales for the quarter.
“We have barely begun to see the contribution of the acquisition of the St. Hilaire and Anderson assets,” said Horn.
He said he was proud of the company’s ability to squeeze profit out of disappointing revenues. Legumex Walker realized $6.2 million of gross margin on its Canadian operations, representing 10.1 percent of sales.
“Our financial results reflect our success in maintaining consistent gross margins and sales amidst the continuing industry head winds, a testament to the underlying strength of our special crops business,” said Horn.
Some of the head winds have been caused by increased competition from emerging pulse producing countries. The company is combating that new competition through a strategy of global diversification. It recently acquired a bean processing facility in Tianjin, China.
“The addition of our processing capabilities in China means that we are now the competition that we previously faced,” said Horn.
Construction of the company’s Pacific Coast Canola plant in Warden, Washington, is on budget and on schedule to begin operations early next year.
“We just finished the first forward purchases of canola seed for the fall crop,” said Horn.
The canola was bought from growers in the U.S. Pacific Northwest. Only a small fraction of the company’s anticipated needs for the first 12 months of operation have been bought.
