Slideshow: Richardson expanding its horizons

by Arvin Donely
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Richardson
Richardson Milling's oat mill in South Sioux City, Nebraska, U.S.
Photos by Arvin Donley.
To view the complete slideshow, click here.
 
James Richardson has been a name associated with the Canadian grain industry for more than 160 years, but the founder of what is today the country’s largest agribusiness company didn’t set out to be 
a grain trader. In the mid-1800s he was running a successful tailoring business in Kingston, Ontario, and, in some instances, was accepting grain as payment for his clothing services.

Richardson saw the opportunity in the grain business, so he established a one-man grain trading operation. What started as a solo operation now has more than 2,600 employees — 1,300 of which have been added during the past seven years when the company has made numerous acquisitions — working at more than 100 facilities in North America and England. Richardson International is a privately-held worldwide handler and merchandiser of all major Canadian-grown grains and oilseeds and vertically integrated processor and manufacturer of canola-based products and, more recently, oats.

For the first 140 years or so, the company was primarily a grain trading company with ownership of hundreds of Richardson Pioneer elevators across Western Canada. Today, the company handles close to 16 million tonnes of grain, has ownership of seven export terminals — its largest in Vancouver — which export over 10 million tonnes annually, operates over 80 retail crop input facilities and processes about more than 1.8 million tonnes of grains and oilseeds annually.

It wasn’t until 1999 that the company branched out into the value-added side of oilseed processing with the acquisition of Canbra Foods’ canola crushing and packaging facility in Lethbridge, Alberta, Canada. In 2010, Richardson built a second, state-of-the-art canola processing plant in Yorkton, Saskatchewan, and has since expanded that facility.


Richardson International
Workers bagging finished product at Richardson Milling's South Sioux City, Nebraska, U.S., oat mill.
 

Expanding into England

In 2013, Richardson acquired $800 million in assets from Viterra, including 19 country elevators 13 crop input centers co-located with those elevators, and the milling business, which included oat processing plants in Portage la Prairie, Manitoba; Martensville, Saskatchewan; Barrhead, Alberta; and South Sioux City, Nebraska, U.S.

“We are excited to continue our diversification and value-added processing and build on the success we have achieved in canola processing,” Curt Vossen, president and chief executive officer of Richardson International, said at the time of the acquisition. “The oats processing business provides us with an opportunity to establish a presence in the U.S., which will increase our profile and enhance our ability to meet the needs in the global marketplace.”

The addition of the oat milling business has led Richardson to expand its reach beyond North America.

In June 2017, the company acquired European Oat Millers, which is based in Bedford, England. European Oat Millers is the second largest oat miller in Europe, with its products being sold throughout the U.K. and exported to continental Europe, Africa, the Middle East and Asia.

“As the largest oat miller in North America, we now look forward to building a presence in Europe to enhance our ability to compete in the global marketplace,” Vossen said.

At the time of the acquisition, Bill Jordan, who cofounded European Oat Millers with his brother, David, said he was happy to pass the business to another likeminded, family-owned company.

“We are pleased to be passing it on to a similar family-owned business that shares our vision for growth and our core values and we look forward to watching the business evolve,” he said.

The Bedford facility makes a variety of products, including groats, flakes, flour, bran, protein crispies and extruded ingredients.

Because the companies share many of the same core philosophies and values, the transition has been relatively smooth and Richardson Milling U.K., which it is now called, is an excellent addition to the Richardson family of companies, said Darwin Sobkow, Richardson’s Executive Vice-President, Operations.

“Over the last five months, we have been working with our management team in the U.K. to integrate the business into our Richardson network and I am pleased with the progress,” said Sobkow. “As we become more familiar with our operations in the U.K., we have identified strengths as well as opportunities for improvement.”

Moving forward, Sobkow said the company will continue to invest strategically in the U.K. business to enhance its operations and services.

“Specifically, we will be investing in our Bedford facility to increase production capacity. We have also identified opportunities to invest in the latest technology to strengthen our commitment to providing quality products and ensure we remain a reliable supplier of choice,” he said.

Richardson is the largest oat miller in North America and now one of the largest, if not the largest, in the world. Having made that initial step outside of North America, Richardson will be looking to further expand its global footprint in the coming years.

“This is yet another step in our growing value-added processing business. Over the last 18 years, Richardson has grown from a new entrant in the food business to a leading manufacturer of canola-based food products and an effective global supplier of oat products,” Vossen said. “We will continue to pursue new opportunities to grow and expand our business both at home and in new markets.”

Richardson International
This 93,000 square-foot distribution center was added to the South Sioux City mill in 2016.
 

New research and development lab

In the United States, Richardson Milling recently opened a research and development lab and sales office in Lenexa, Kansas, a suburb of Kansas City. Jason Hines, senior director of sales for Richardson Milling, said the central location of the office gives Richardson Milling relatively quick access to its customers across the continent.

“We do a lot of development work for our larger customers here in Kansas City,” Hines said. “In today’s environment, food companies have reduced product launch lead times and decreased their own product development resources, so they are relying more on their suppliers. We found it to be a very important sales tool to have our product and development team and sales people all in one location.”

Hines said the company’s four North American mills are well positioned to react to customer demand. Its mill in Portage la Prairie is the company’s largest mill and produces groats, flakes, flour and bran. The Martensville facility, located in the heart of oat country, specializes in whole and steel-cut groats delivered in bulk. The South Sioux City mill specializes in the production of clusters, coated grains as well as both conventional and gluten-free groats, flakes and flour. And the Barrhead facility is organic certified, producing groats, flakes, flour and bran as well as conventional oats products.

Hines said that while oats aren’t necessarily viewed as “an exciting product,” Richardson is looking to capitalize on several recent trends. In the United States, for instance, organic is showing strong growth as well as gluten-free products and the company’s oat division is making those products available to consumers.

“People might not find oatmeal exciting, but it certainly has become a staple for a lot of people because of its health benefits,” he said.

Perhaps most promising for a company like Richardson, which is in growth mode, is there are signs that oats consumption is on the upswing in some parts of the globe.

“Consumer products containing oats have taken hold in Mexico and South America and we are seeing the opportunities grow in Asia, too,” Hines noted. “People around the world are looking for healthier and more convenient foods such as granola bars and instant hot cereals.”

Richardson International
Richardson Milling's oat mill in SOuth Sioux City, Nebraska, U.S., specializes in the production of clusters and coated grains as well as groats, flakes and flour. 
 

South Sioux City upgrade

One of the key assets that Richardson acquired from Viterra in its 2013 transaction was the oat mill in South Sioux City, Nebraska, U.S. The facility was built in 1986 by ConAgra during the peak of the oat bran craze in the United States, and later was sold to 21st Century Grain Processing which eventually sold it to Viterra.

Today, the facility, which employs 89 workers, produces a wide variety of products, including clusters and coated grains for major cereal manufacturers around the United States, said Tony Pulford, plant manager at the South Sioux City facility.

Shortly after purchasing the mill, Richardson upgraded the facility with new equipment and a major expansion of its warehouse. Pulford, who started working at the South Sioux City facility in 1999 filling 50-pound bags and worked his way up to plant manager in November 2017, said Richardson’s investment in the plant over the last four years has made for a much more efficient operation. He said before the 93,000-square-foot distribution center was completed in 2016, storing and shipping product had become a logistical challenge.

“We had to shut down the mill at times because we would run out of storage space,” Pulford said. “If a driver wasn’t here with a trailer on time for us to load it, we had no choice but to shut the place down.”

The distribution center can hold up to 3,600 pallets of product and ingredients that are stacked on five rows of 50-foot-high racks. An automated fork lift stacks and retrieves products.

“Before we used to load trucks seven days a week,” he said. “Now, with the distribution center we run five days a week and have the flexibility to store product instead of constantly loading trucks.”

The upgrade also involved installing some new equipment in the six-story facility, including a new flaking line supplied by Bühler that was installed shortly after Richardson purchased the plant.

Located in the middle of corn and soybean country, the South Sioux City plant brings in most of its oats by rail from across Western Canada. It has oat storage capacity of 4 million bushels (Richardson doesn’t disclose its oat milling production capacity at its facilities).

In addition to expanding the oat mill in South Sioux City, Richardson also renovated the office area, built a new parking lot on the south end of the facility and constructed a new truck scale and probe house. And the company has left open the possibility of adding production capacity at the mill at some future date.

“We enhanced our facility in South Sioux City to meet growing demand from our customers and continue to provide top quality products, ensure food safety and meet the needs of the market today and into the future,” says Sobkow.

Richardson's recent acquisitions, expansions and upgrades

  • Dec. 8, 2017 – Acquired Bestland Air Ltd., an independent crop inputs retailer located near Starbuck, Manitoba.
  • Oct. 31, 2017 – Acquired 10 retail crop inputs located in Western Canada from CHS Canada LP.
  • Aug. 28, 2017 – Acquired two new crop inputs facilities in northeastern Alberta from Webb’s Crop Services Ltd. and Agro Guys Inc.
  • June 26, 2017 – Acquired European Oat Millers in Bedford, England.
  • Jan. 31, 2017 – Acquired retail crop input located in Saskatchewan from Crop First Agro.
  • Sept. 19, 2016 – Began construction on three new crop input centers in Saskatchewan.
  • Aug. 16, 2016 – Invested $120 million to upgrade its canola processing plant in Lethbridge, Alberta.
  • May 16, 2016 – Invested $140 million to double storage capacity export terminal in North Vancouver.
  • March 2016 – Completed construction of 93,000-square-foot warehouse facility at oat milling facility in South Sioux City, Nebraska, U.S.

To view the complete slideshow, click here.

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