Smaller grain handling companies across the Prairies have welcomed the addition of a new player to the Vancouver grain handling scene.
“It’s another terminal option at Vancouver and it’s certainly always good to have competitive choices,” said Rob Davies, chief executive officer of Weyburn Inland Terminal.
Terminal One Vancouver, a consortium of five Saskatchewan-based inland terminals, has purchased a 102,070 tonne grain terminal at the west coast port from Agricore United.
The new owners, who are to take over the facility by Aug. 1, say they’ll be looking for other players to take an equity position in the venture or sign a grain handling agreement.
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Some of those potential partners said last week that while they aren’t yet in a position to make such commitments, they think the Terminal One project will benefit grain shippers and farmers.
“I don’t see how having an (ownership stake) in a facility like that could be a bad investment,” said Andrew Travers, manager of Gardiner Dam Terminal at Strongfield, Sask.
“If you can afford it and it works, I can’t see it being a bad idea.”
While his company hasn’t made any decision about participating in the venture and may be hamstrung by the fact that it has a handling agreement with AU, Travers doesn’t think Terminal One will have any problem getting other players on board, particularly other locally owned inland terminals.
“I think ITAC (Inland Terminal Association of Canada) members will jump on with tonnes or money or both,” he said.
The five companies making up Terminal One Ñ North West Terminal, North East Terminal, Great Sandhills Marketing Centre, Prairie West Terminal and South West Terminal Ñ can generate about 500,000 tonnes of grain annually.
They’ll be looking for enough grain from other grain shippers to achieve annual throughput of 1.6-1.8 million tonnes.
Davies of Weyburn Inland Terminal said his company will have discussions with representatives from Terminal One about joining in, but it’s too soon to say what the outcome of those talks might be.
“We’ll have to evaluate the opportunity and see what it looks like and whether it’s a good fit for us,” he said.
Like other grain handlers that don’t have a physical presence at the West Coast, WIT has a handling agreement with one of the terminal operators. That could be an issue for companies that do want to get involved with Terminal One.
“Whether we could change that arrangement if we wanted to, we’d have to investigate before making any comment,” said Andrew Kolbeck of CMI Terminal JV at Naicam, Sask.
The CMI facility is a joint venture with AU, which makes it even more problematic in terms of potential federal competition bureau concerns.
Another company in a similar situation is Westlock Terminals of Westlock, Alta., which has a terminal handling agreement with AU. The agreement provides AU with the right to match any offer from any other terminal operator.
But manager Bob Heck said that regardless of whether his company participates directly, he thinks the Terminal One venture is a good idea.
“The major companies have dominated there in the past,” he said.
“Now we’ll bring some independents into it and there’s more competition.”
One of the biggest companies not represented at Vancouver is Paterson Grain, which operates 42 primary elevators across Western Canada.
Marketing director Keith Bruch said his company, which has a handling agreement with Cascadia Terminal (which is 50 percent owned by AU), has had preliminary discussions with Terminal One officials about getting involved.
“We haven’t got a lot of information about it, but we would evaluate it and assess it and see if it would make sense for us,” he said.
