Existing handling contracts between small prairie grain handlers and terminal companies in Vancouver shouldn’t interfere with a successful start for Terminal One Vancouver, says a company spokesperson.
Garth Gish said the fledgling terminal operator is working with other players in the industry to ensure the issue doesn’t become a serious obstacle.
“It’s something we’re managing through at this time and we don’t believe at the end of the day that’s going to be a problem,” he said.
The consortium of five Saskatchewan inland terminals that bought the 102,070 tonne capacity terminal from Agricore United can ship about 500,000 tonnes of grain a year.
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To meet its goal of handling 1.6 to 1.8 million tonnes, the terminal is working to bring other companies on board through equity investment or handling agreements.
All of those potential partners have handling agreements with one of the other Vancouver terminals operated by Saskatchewan Wheat Pool, JRI International, AU and Cargill.
Officials with some of the inland terminal companies say even if they’re interested in doing business with Terminal One, getting out of those agreements might not be easy.
“There are a number of types of handling agreements,” said Rob Davies, chief executive officer of Weyburn Inland Terminal, one of the potential partners.
“They vary by length and expiration date and other conditions and some are more flexible than others.”
Gish was confident the issue can be resolved.
He could not say if Terminal One would offer financial or other considerations to other terminal companies in return for letting companies out of contracts.
“There are so many different agreements that can be looked at in so many different ways,” he said. “We’ll have to look at them on a case by case basis.”
Officials with existing terminal companies declined to comment on their contractual agreements.
Gish said that while finding partners is Terminal One’s top priority, the new company also has other matters to deal with as it prepares for an Aug. 1 takeover.
While the major financing package to backstop the purchase is in hand through Farm Credit Canada, the company is still shopping for a lender to provide day-to-day financing. It’s also continuing with due diligence in areas such as environmental studies and structural and mechanical engineering reviews and making arrangements to join a number of industry groups and associations that represent terminal operators.
“It’s all a bit of a juggling act,” said Gish, who was recently in Vancouver to meet with officials from the Grain Workers Union, which represents 80 grain handlers at the facility.
Dealing with unionized employees will be a new experience for the consortium members, but Gish said the initial meetings went well.
“They seemed very happy that our group was the successful bidder,” he said, adding workers suggested it was like returning to their roots of being employed by United Grain Growers, another farmer-owned company.
Union president Robert MacPherson said employees are happy the new owners are targeting throughput of 1.6-1.8 million tonnes a year, a level that would provide full employment.
They’re also relieved the fate of the terminal has been resolved, 21Ú2 years after it was put on the market.
“They’re pleased to know who their new boss will be,” he said. “It’s very stressful not knowing what’s going to happen or if you’re going to have a job tomorrow.”
