International grain companies looking to gain a foothold in Western Canada can stop knocking on one door.
“We’re not for sale,” said Andrew Paterson, president and sole owner of Paterson GlobalFoods.
Nearly every player in the grain industry has approached Paterson at some point inquiring if his company is for sale and the answer is always the same — not at any price.
“I have my children here learning the ropes and money is not everything. We have a tradition to continue within the company and we’re very financially sound and it will continue to be run by the Paterson family.”
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In the wake of Glencore International’s $6.1 billion takeover bid for Viterra, Paterson felt obliged to write a letter to his customers assuring them his company wouldn’t be the next one to change hands.
The Viterra takeover set tongues wagging about who would be the next target but Paterson thinks the industry consolidation is done despite continued interest from foreign companies.
Bunge has publicly expressed a desire to enter the western Canadian grain handling business under an open market. Archer Daniels Midland continues to eye North American acquisitions after backing away from the Viterra deal over concerns that it would not meet the company’s investment return objectives.
But it’s going to be difficult to find any asset with a for sale sign.
“I can’t see anybody selling that is left. Cargill is not going to go anywhere. Richardson is a buyer. I can’t speak for P&H (Parrish and Heimbecker Ltd.) but they’re in the same kind of boat that we are,” said Paterson.
It is possible that one of the farmer-owned terminals might sell but he said most of them are “fairly comfortable” with where they’re at.
So any new entrant into the market must be prepared to build grain terminals and that is a serious long-term investment. Paterson hasn’t heard any of that kind of talk.
He believes the proposed takeover of Viterra by Glencore will be a good development for his company because he anticipates Glencore will have tighter control on its costs.
“Some of the market moves that were taking place when (Viterra) owned it will be less. (Glencore) is a more disciplined player,” he said.
In the meantime, Paterson GlobalFoods continues to expand its presence on the Prairies, spending about $100 million on capital projects over the last 14 months.
The company is preparing to load its first 130-car unit train at its brand new facility in Gleichen, Alta., it’s ninth inland grain terminal.
“We have expansion plans at two other facilities with another 40,000 tonnes of storage going up,” said Paterson.
None of those new assets will end up in the hands of anybody with a last name other than his.
“We’ve been earning our customers’ trust for over 104 years, so we’re not going to let them down now or in the future,” said Paterson.
