(Adds CEO comments starting at paragraph 3)
By Rod Nickel
WINNIPEG, Manitoba, March 24 (Reuters) - CWB has started building the first in what it hopes will be a network of grain elevators as the company formerly known as the Canadian Wheat Board attempts to re-position itself as an independent grain handler.
CWB said on Monday that it will build a grain elevator at Bloom, Manitoba, and it will be ready to receive grain for the 2015 harvest. The high-throughput elevator, near Portage la Prairie, will have 33,900 tonnes of crop storage.
The company, controlled by the Canadian government, hopes to buy and build more grain elevators and secure a foothold in Port Metro Vancouver, the country’s biggest port, CWB Chief Executive Ian White said in an interview.
”We’re trying to put together a network of country and port assets that will make us a reasonably significant sustainable player in the Canadian industry,“ White said. ”What we’re really doing is starting to look at one part of our strategy, to build some elevators in places we think are appropriate.
“This is the first announcement of those.”
CWB has downsized sharply since the government removed its marketing monopoly on most Western Canadian wheat and barley in August 2012. Since then, the Winnipeg-based company has bought and sold farmers’ wheat, durum, barley, canola and peas, relying mainly on grain facilities owned by rivals such Richardson International Ltd and Cargill Ltd.
CWB started to assemble its own network of handling facilities in November, when it acquired Mission Terminal Inc from Upper Lakes Group. Mission Terminal includes a terminal at Thunder Bay, Ontario, a grain facility at Trois-Rivieres, Quebec, and a stevedoring service.
In January, CWB also bought a 10 percent stake in Prairie West Terminal, a farmer-owned network in Saskatchewan.
The Canadian government agreed to guarantee CWB’s borrowings until it is sold or develops a plan to be self-sustaining by 2016. To finance its acquisitions and elevator construction, CWB is using its retained earnings and debt that does not require the government’s guarantee, White said.
White said there have been no takeover offers for the CWB. He said CWB and the government have not yet agreed on a privatization process. Once that is clarified, CWB would look to add a strategic investor, but not take it over, White said.
Part of CWB’s plan to become self-sustaining involves farmer ownership. Farmers can receive an equity interest in CWB based on their grain deliveries.
Construction has already started on the Bloom elevator, which will be serviced by the Canadian National Railway Co mainline with track for 130 rail cars. (Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Peter Galloway and Grant McCool)