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East’s biggest oilseed crusher goes to Viterra

Glencore's grain arm to buy plant for almost $192M

Viterra
(Dave Bedard photo)

Eastern Canada’s biggest oilseed processing plant is poised to become part of Canada’s biggest grain handler.

Regina-based Viterra announced last week it has signed a deal to buy the shares of Twin Rivers Technologies-Entreprises de Transformation de Graines Oleagineuses du Quebec, or TRT-ETGO, whose main asset is its canola and soybean crushing and refining plant at Becancour, Que.

Viterra didn’t lay out the terms of its deal last week, but TRT-ETGO’s owner, Felda Global Ventures (FGV), said in a separate release that Viterra gets all TRT-ETGO’s common shares for 608.2 million Malaysian ringgit, or about C$191.7 million.

The plant at Becancour, across the St. Lawrence River from Trois-Rivieres, has a crushing capacity of 3,000 tonnes per day (1.05 million tonnes per year) and 1,200 tonnes of daily refining capacity.

TRT-ETGO, built in 2010, processes vegetable oils for food and industrial markets, plus meal for livestock feed.

FGV, which took over the plant when it bought Boston-based Twin Rivers Technologies in 2007, is “streamlining our downstream focus, and hence strengthening the group’s competitive position” by selling the facility, FGV CEO Dato’ Mohd Emir Mavani Abdullah said in the seller’s release.

The company, Dato’ Emir said, is “ready to take hard calls when it comes to delivering high total shareholders’ returns. We trust that this divestment will improve the group’s profitability position.”

Kuala-Lumpur-based FGV, the world’s biggest crude palm oil producer, said last week the sale to Viterra is part of a “transformation strategy which FGV has embarked on since 2013” to shed non-core businesses and “ensure that our organization is focused on achieving efficiency and profitability.”

TRT-ETGO has recorded “weak financial performances” in its past three fiscal years, FGV said in a separate statement, citing low crush margins on top of “unfavourable weather and environmental conditions” in fiscal 2014, for net losses of between $35.8 million and $45.3 million in those three years.

The plant, FGV said, “is not expected to become profitable and contribute positively to the FGV group in the near future.”

TRT-ETGO’s processing capacity was briefly committed to a joint procurement and marketing venture with Bunge from 2011 to 2013, combining the outputs of the Becancour plant and Bunge’s comparably-sized Hamilton, Ont. crush plant.

Owning “the largest full swing plant in Canada” is expected to give Viterra the “ability to optimize our output by crushing canola or soybeans, depending on market conditions and end-user needs,” Kyle Jeworski, Viterra’s CEO for North America, said last week in the buyer’s release.

For Viterra, the Canadian grain arm of commodities firm Glencore, the plant “will allow us to connect our farm customers to more marketing opportunities, further leveraging our origination capabilities through our industry leading asset network.”

FGV had been rumoured since June to be seeking a buyer for TRT-ETGO. La Terre de Chez Nous, the news arm of Quebec’s Union des producteurs agricoles (UPA), that month cited a report in Malaysian media that FGV planned to shed non-core assets and focus on its palm oil business.

The TRT-ETGO deal is expected to close later this year, Viterra said. — AGCanada.com Network

 

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