North America’s largest lentil exporting company continues to gobble up its competition.
Earlier this month, Alliance Grain Traders Income Fund acquired two more Saskatchewan pulse processing companies, bringing its provincial total to six plants. It also owns facilities in North Dakota and Australia.
The latest purchases by the Regina firm, operating under the new name Saskcan Pulse Depot, are Pulse Depot in Rosetown, Sask., and Tradewind Commodities Ltd. in Milestone, Sask.
“We’re continuing on the growth path in a big way,” said Saskcan president Murad Al-Katib.
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The 150,000 tonnes of combined capacity added through the two acquisitions pushes Saskcan’s total special crops processing capacity above 600,000 tonnes, making it one of North America’s largest pulse processors. It was already the largest pea and lentil splitter in North and South America.
Pulse Depot is one of North America’s five largest lentil processors, but the company also processes peas, chickpeas and canaryseed. Alliance paid $8.5 million for the Rosetown firm. The deal includes a 25 car spot with Canadian National Railway.
Alliance now owns both pulse processing plants in Rosetown, which doesn’t sit well with Don Sanderson, a local pulse and cereal producer.
“Saskcan Pulse are quite good to deal with, so that helps, but I do feel I don’t have an alternative now,” he said.
A year ago, Sanderson had the option of delivering to three companies in his area. However, with the demise of the processing plant in Zealandia and Alliance’s recent acquisitions, there is only one player in the immediate vicinity.
“I’m not disgruntled, but I’d rather it hadn’t happened,” he said.
“It’s the world we’re in. They’re not crooks, I don’t think, and that’s the good news.”
Sanderson is generally pleased that Saskcan continues to expand its presence because with its Turkish ties, the company has been one of the main drivers behind the emerging red lentil market.
The other recent acquisition, Tradewind Commodities, is a pulse and special crops processor 60 kilometres south of Regina that has a 25 car spot with Canadian Pacific Railway. Alliance bought the assets of the company for $2.9 million.
“The moves were really aimed at solidifying our rail loading presence in the west-central and also in the Regina plains,” Al-Katib said.
“Tradewind is a strategic asset that will solidify our bulk processing and freight capacity and allow us to have strong linkages north to south into the U.S.A. and Mexico,” he noted in a news release announcing the purchase.
Alliance has passed the $100 million mark in market capitalization, a measure of a company’s size calculated by multiplying the share price by the outstanding shares. And it’s not done growing.
“We’re aggressively looking at further expansion possibilities,” he said.
In July, the company completed a share offering that raised $15 million to be used for acquisitions, working capital and general corporate purposes.
“We’re continuing to look at other provinces on the pulse crop side, with a focus on beans and other specialty crops,” Al-Katib said.
Alliance is considering adding bean processing capacity in North Dakota and Minnesota and another pulse processing firm in Australia.
