What was once almost unthinkable has now become almost routine.
Alberta Wheat Pool and Manitoba Pool Elevators announced last week a joint venture with a local group of farmers to build a high throughput grain terminal at Naicam, Sask.
Just a couple of years ago the notion of the two pools setting up shop in Saskatchewan Wheat Pool’s backyard would have shocked the grain industry.
But competition between the pools has become the norm and last week’s announcement was shrugged off by Sask Pool president Leroy Larsen.
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“I’m not surprised at this,” he said in interview from the pool’s head office in Regina. “We’ve moved into their territory and they must see some opportunities in that area and are pursuing it.”
Alberta Pool spokesperson JoAnne Meents said the company looks at every investment opportunity that comes along, regardless of where it’s located.
And if there ever was any unspoken agreement among the pools to respect provincial boundaries, she said, that’s no longer the case.
“Saskatchewan has moved into Manitoba and Alberta and we’re moving into Saskatchewan, so obviously that door is open,” she said. “We’re all businesses and we need to be looking at what makes the most sense for each of us.”
Sask Pool is building six new elevators in Alberta and two in Manitoba as part of its Project Horizon program. Its subsidiary AgPro Grain already buys grain in Manitoba. The pool is also selling farm supplies through United Farmers of Alberta.
Meanwhile, Alberta Pool is building a terminal at Dodsland, Sask., in a partnership with local producers, and AWP and MPE recently tried unsuccessfully to buy Humboldt Flour Mills, which operates a network of 12 farm supply outlets in Saskatchewan.
Those two pools have also entered merger talks with the intention of setting up a prairie-wide co-operative that would buy grain in Saskatchewan.
Tension building
The three pools still work together in a number of corporate ventures like Western Co-operative Fertilizers Ltd. and Xcan Grain Pool, and lobby together through Prairie Pools Inc., but the spirit of competition between Sask Pool and the AWP/MPE alliance grows more intense with every new incursion into the other’s traditional territory.
But Ron Loyns couldn’t care less about all that. He’s just happy to see a 20,000-tonne grain terminal being built in his community about 130 kilometres east of Saskatoon.
“We’re doing this strictly because of the economics,” he said in a telephone interview from his tractor cab. “If there’s political motivation behind the companies and it’s to our favor, I guess that’s good for us.”
Loyns is chair of Community Marketing Initiative, a group of 22 Naicam-area farmers who decided a terminal would be good for the community and a good investment.
CMI discussed a joint venture with all the major grain companies before deciding to form a partnership with the two pools. The group initially settled on Alberta Pool, but Manitoba Pool was included at AWP’s suggestion.
Loyns said having the two pools involved will provide access to export terminals at both Vancouver and Thunder Bay, along with extensive additional marketing and management expertise.
The $10.6 million project will be a 50-50 partnership between CMI and the pools, with construction slated to begin this fall or the spring of 1999, depending on CMI’s success raising funds through a public share offering this summer.
