Canada grain handlers Richardson, Cargill plot divergent paths
By Rod Nickel
WINNIPEG, Manitoba, June 4 (Reuters) - Canadian grain handler and processor Richardson International Ltd will look to the United States for growth by acquisitions, while Cargill Ltd favors building on its existing Canadian facilities, senior executives with the companies told Reuters.
The two agribusiness companies are also expanding their canola-crushing capacity, and say they are counting on farmers raising yields, rather than planting more land with the yellow-flowering oilseed, to supply the plants.
Cargill hired Jeff Vassart as its new Canadian president last week, while Richardson President Curt Vossen is planning the next move for a company that this year completed its biggest-ever acquisition.
Canada has become more attractive to global grain handlers since Ottawa scrapped the Canadian Wheat Board's marketing monopoly for the western provinces in 2012.
Richardson, a 156-year-old private company based in Winnipeg, this year completed a C$900-million ($865 million) acquisition of Canadian country elevators and other assets from Glencore Xstrata PLC. The deal included a Nebraska oat-processing plant and Texas wheat mill, giving the company a U.S. beachhead to build on, Vossen said.
"Our size is such now in Canada that it would be problematic to grow much more beyond where we are now," he said. "On an acquisition basis, we would probably look at grain origination outside Canada, (and) we would also look at processing capability in or outside of Canada."
Plants that process crops Richardson already handles, like canola, wheat, durum and oats, make the most sense, Vossen said.
The United States, with a crop mix and trade patterns similar to Canada's, looks to be the most logical place to seek acquisitions, but opportunities are scarce, Vossen said. Continued...