Richardson creates new corporate identity

by Meyer Sosland
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The Richardson family of Winnipeg, Manitoba has been a major part of Canada’s grain industry for more than a century and a half. Known for many years as James Richardson International Limited, the company announced in September that it had changed its name to Richardson International Limited in an effort to "create a stronger, more unified corporate identity."

The company, which celebrated its 150th year in business in 2007, also changed the name of its two largest subsidiaries — Pioneer Grain Company, Limited and Canbra Foods Ltd. — to Richardson Pioneer Limited and Richardson Oilseed Limited.

Curt Vossen, Richardson International President, told World Grain the name change did not represent a major change in the company’s business plan, but it would bring all of Richardson’s enterprises — ranging from grain handling to oilseed crushing to food processing and research — under one brand name.

"We have a number of different divisions of the company that aren’t identified with the name Richardson — one being the Pioneer Grain division, another being what was formerly called Canbra Foods Ltd., which is our oilseed processing business," Vossen said. "So now we have branding awareness across the company. We’re an international company and we’re growing, not just in grain merchandising but in value-added businesses like oilseed processing and packaged products retailing and distribution.

"We also have a new division within Richardson Oilseeds Limited after having divided our oilseed processing into both bulk and packaged products. We now call the packaged products division Richardson Nutrition."

As part of the canola crushing division, Richardson International also carries out product development at its oilseed processing plant in Lethbridge, Alberta, and is in the process of building a new oilseed processing plant in Yorkton, Saskatchewan that will triple its crushing capacity for canola.

Other crop research and field trials are carried out at

Richardson Kelburn Farm south of Winnipeg, Manitoba, and as part of a University of Manitoba program at the Richardson Centre for Nutraceuticals and Functional Foods.

"A lot of that product (canola, canola oil and meal) is moved outside of Canada," he said. "And whenever you increase your capacity by that magnitude, you’re going to look for new markets and new opportunities outside of Canada."

To meet its marketing objectives, Vossen said Richardson International has plans to open an office in Hong Kong in the near future and is considering reopening its office in Guadalajara, Mexico.

In addition to canola and canola products, Richardson Pioneer is also one of Canada’s largest exporters of food and feed peas, primarily to Western Europe and North Africa.

In October 2008, Richardson Pioneer

announced that it was in the process of spending C$40 million on expanding and upgrading its facilities, including construction projects that would increase the number of 100-plus car loading sites from 20 to 27, an additional 90,000 tonnes of storage space and three new fertilizer storage, blending and distribution facilities.

Of the 16 projects slated for 2008, nine were complete by the end of October and the remaining seven were all on schedule to be finished by the end of the year. Further expansions for 2009 are in the planning stage and will be announced early next year.

MARKET SHARE GAIN
A pivotal point in the company’s long history occurred in 2007, when Richardson International became involved in a series of events involving two other major players in the Canadian grain industry — Agricore United and Saskatchewan Wheat Pool (SWP) — that resulted in Richardson becoming the country’s second-largest grain handler.

At that time, Agricore United was the target of a hostile take-over bid by SWP, which was then followed by a friendly bid by Richardson International. The coop’s board of directors decided to accept the Richardson deal, only to have SWP (which is now known as Viterra) sweeten its offer to roughly C$1.8 billion in total enterprise value, which caused Agricore United’s directors to have a change of heart. However, when Agricore United made the decision to switch to the new and more lucrative SWP offer, it brought into play an acquisition agreement entered into between SWP and Richardson International for the sale of certain Agricore United assets to Richardson International.

When the dust settled, Richardson International had emerged with:

• fifteen additional grain elevators, of which 13 were high-throughput facilities;

• nine farm supply centers for a purchase price of C$315 million, including the value of inventory ;

• and a C$35 million termination fee.

Not only had the deal filled in most of the gaps in Richardson Pioneer’s coverage of the Prairies and increased the company’s market share by 40%, the shrillest champions of "cooperativism," which had dominated the Canadian grain industry for much of the 20th century, had been silenced by the transformation of SWP to a public corporation. Grain farmers who were once considered "poolies" were suddenly more willing to deal with Western Canada’s handful of privately-owned grain companies, including Richardson Pioneer.

Although having its offer trumped by SWP was a bittersweet experience, Richardson International ultimately emerged as a much stronger company, Vossen said.

"These facilities filled some very clear gaps for us in our collection system across Western Canada," Vossen told World Grain in the summer of 2007. He said the additional assets made Richardson "a more comprehensive competitor in terms of availability and location, with a stronger presence in Alberta and Manitoba, where the company previously had less presence in the marketplace.

Vossen said Richardson International is a "legacy business that has gone through many generations of the same family, and they have an attachment to it. I think it’s fair to say that it goes beyond what a normal business relationship would be because it’s based on tradition. It’s based on legacies. It’s based on what is almost folklore within the family."

Based in Vancouver, British Columbia, Canada, Leo Quigley writes for a variety of national and international publications specializing in agriculture and transportation. He can be reached at Quigley@dccnet.com.

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