N.M. Paterson & Sons Ltd. has bought the assets of the former FarmGro Organic Foods Inc. flour mill in Regina.
The Winnipeg grain company paid $3.4 million for a plant that had more than $11 million of liabilities when it was placed into receivership in December.
The lion’s share of funding for the original plant came from the government of Saskatchewan. The Crown Investments Corp. and the Saskatchewan Government Growth Fund had $8.3 million tied up in FarmGro.
Receiver Clark Sullivan of Sullivan & Associates said all of the proceeds of the sale will go to the province.
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It’s a purchase that makes Paterson by far the biggest player in Canada’s organic grain industry.
Paterson is part owner of the Prairie’s largest organic processor, Growers International Organic Sales Inc., which operates three elevators in Wilcox and Wolseley, Sask.
Now it owns what was once billed as North America’s largest fully dedicated organic flour mill.
The strengthening of Paterson’s organic might makes at least one farmer fighting mad.
“I think it stinks,” said Assiniboia, Sask., producer Dwayne Woolhouse, a former FarmGro board member.
“There’s no competition out there any more. They bought Growers International. Now they’ve got FarmGro.”
He expects prices for organic grain to fall as a result.
Neil Moore, general manager of Paterson’s latest acquisition, said his intention is to create new markets and products, not to restrict producer options.
“My marching orders are to get out there and expand the market. I think producers should be glad to hear something like that.”
The plant, which has been renamed Nutrasun Foods, was scheduled to begin operations on June 3. Moore hopes it will soon be functioning at capacity, milling 75 tonnes of wheat a day.
“We’ll be selling both organic and conventional flour into the marketplace,” he said.
Most of the grain will be come from Paterson’s network of 50 elevators, more than half of which are located in Saskatchewan.
Moore said it’s “a real benefit” to have an assured supply of quality grain.
