SASKATOON – As a follow-up to an article in the June 1 issue about government financial involvement in the farm machinery manufacturing industry, The Western Producer asked more than 30 companies to provide more detailed information about their government loans and grants.
Five replied and provided the following information, as compiled by reporter Mary MacArthur.
Seed Hawk – Received a $12,500 matching grant from PARD, the provincial and federal government’s Partnership Agreement on Rural Development. The Langbank, Sask., company applied for the grant shortly after it began manufacturing its one-pass seed drill in 1992. The money was used to develop videos, brochures and display material. Marketing has been so successful that it has sold all its machines, reports Pat Beaujot of Seed Hawk.
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The company had eight full-time staff. This year, it added another six part-time workers. It reapplied for a second PARD grant, but was turned down.
“We feel that aid in rural development is important to companies starting on the Prairies and to communities and young families that want to stay in rural areas,” said Beaujot.
“However, financial aid among competitors should be kept even. When we see companies who only have an add-on part to design and manufacture get three times the support we got, or other companies that have a similar product in a rural area get four times the support level we did, it does make the playing field a little uneven.”
Batco Manufacturing – A $10,000 PARD grant was approved. The Swift Current company only spent half of the matching grant last year, but expects to receive the other $5,000 this year.
Rob Stenson of Batco said government grants are important for small businesses. His company used the money for marketing at new trade shows. Since Batco began building its portable belt conveyor for special crops almost two years ago, sales have jumped 400 percent. It expects sales to double again next year.
“It’s not a huge amount of money, but it sure helps,” said Stenson. “We wouldn’t have been able to go to shows. That’s where we’re getting our exposure. We’re so tight on cash it helped us get to shows we normally wouldn’t have.”
Batco has increased its number of employees to 15 from 10 because of the machine’s popularity.
Leon-Ram – The Saskatchewan machinery company had two interest-free federal Western Economic Diversification loans. In 1988 a loan for $250,745 was approved. In 1990 a $929,614 WED loan was approved in conjunction with a $4 million loan from the Saskat-chewan Economic Development Corporation. loan. Only $3.6 million of the SEDCO loan was paid to the company. Interest terms on the SEDCO loan were not disclosed by Ray Malinowski, executive vice-president.
The amount owing is lower “as repayment takes place,” he said. “The loans received from programs offered were made to benefit our economic base and were offered providing we could qualify to meet the financial standards and other criteria set by the loan programs.
“We chose to take the best deal available at the time and are pleased we had encouragement to do so, even if it came from a government agency,” Malinowski said.
Brandt Industries – The Regina-based company received $404,143 of the $1.6 million approved by Western Economic Diversification. All but $95,871 of the interest-free loan has been repaid. It will be all be repaid by Jan. 31, 1996, said president Gavin Semple.
Brandt also received a $300,000 SEDCO loan which has been repaid, he said.
Highline – Western Economic Diversification approved a $1.1 million interest-free loan to the Vonda company in 1990. There is $250,000 still to be repaid from that loan. In 1987 and 1989 SEDCO loaned just over $1 million to the company. The loan was paid back in full last year at 133Ú4 percent interest.
“Highline has contributed to the well-being of our province. We have created valuable employment and significant economic opportunities,” said a company representative.
See next page for more on government loans and grants.
