SASKATOON, Sask. – About 100 people will lose their jobs and almost 100 United Grain Growers elevators will close over the next three years in an effort to improve the company’s financial situation, said its chief executive officer.
“We are under pressure to do better on the bottom line,” said Brian Hayward of Winnipeg.
“I think every-one in the grain business is not happy with the returns they are achieving being involved in the industry,” he said.
Focus on high volume
The company has announced it will close several older, less-profitable grain elevators. Their grain-handling system will revolve around 125 newer, high-throughput elevators in key locations.
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United Grain Growers has more than 200 grain elevators across the Prairies. At the company’s peak there were 700 UGG grain elevators dotting the prairie landscape.
Hayward could not give a list of grain elevators marked for closure or which staff members are facing job loss, but he said many farmers would be able to guess which elevators are likely to close in their area.
Out with the small
Many of the company’s smaller elevators that are not able to handle large grain trucks, or elevators that are on high-cost branch lines will likely be phased out, he said.
“It’s not breathtaking news to a lot of people. We’ve talked a great deal, to a lot of people, that we would be consolidating.
“With the changes in transportation law that just occurred, we thought it was appropriate to reflect that today,” he said.
The company’s last quarter ending July 31 will show a “one-time provision of $11.6 million to cover the three-year country elevator consolidation and dismantling cost.”
Despite the multi-million dollar cost of the consolidation, Hayward said the final quarter was profitable because of a 35 percent increase in sales of seed and chemicals.
“It was a good quarter, a very good quarter.”
