Viterra’s buying spree continues.
The company announced June 15 that it is buying Associated Proteins, a canola crushing plant in Ste. Agathe, Man., for $64 million.
Although the price tag pales in comparison to Viterra’s $1.4 billion bid for ABB Grain Ltd. in Australia, chief executive officer Mayo Schmidt said the Associated Proteins deal strengthens the company’s position in the value-added business.
“This acquisition is an ideal fit for Viterra,” Schmidt said in a news release.
“It bolsters our presence in food processing and complements our position as Canada’s leading canola exporter.”
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The Associated Proteins facility has a crush capacity of 1,000 tonnes per day and advertises itself as the largest expeller pressed canola crushing plant in the world.
However, Viterra noted that the Ste. Agathe plant is a scalable operation, meaning expansion is feasible.
Viterra expects the deal to be completed by June 25.
An agriculture industry analyst in Toronto said the purchase fills a void in the Viterra’s portfolio.
“Strategically it makes sense,” said the analyst, noting that Richardson, Louis Dreyfus and other companies are already in the crushing business.
“It seemed like a natural hole for them, relative to the other guys in the industry.”
Brian Oleson, chair of the University of Manitoba’s agribusiness department, said the purchase is a side issue compared to the ABB Grain bid, but it demonstrates that Viterra is determined to become a multi-dimensional agribusiness and food company. He said Saskatchewan Wheat Pool was the same size as Archer Daniels Midland in the 1970s, but by the 1990s ADM was a giant.
Oleson said Sask Pool’s previous attempt to expand was high risk, but Viterra’s effort to become the next ADM looks more thought out.
“They’re taking what I think is a cautious diversification approach.”
