The Saskatchewan-based grain and oilseed handling firm, part of Glencore, recently announced the signing of a purchase agreement for Twin Rivers Technologies Enterprises De Transformation De Graines Oléagineuses Du Québec (TRT-ETGO) oilseed processing plant.
The CN$190 (US$143m) deal is still going through the routine regulatory process, said Kyle Jeworski, Viterra president and CEO for North America. But, it is forecast to be concluded by the end of the year. “We expect to have it in the last quarter of 2015,” he said.
“We think it’s a very strategic asset for us,” he told FeedNavigator. “We’re already in the crushing business, we have a crushing plant in Manitoba, but this is the largest plant in eastern Canada.”
Crush expansion
The TRT-ETGO facility, based in Bécancour, was built in 2010 and, as a swing facility, has the ability to process either canola or soybeans, which complement the company’s origination base, said Jeworski.
“We’re the largest grain originator in western Canada,” he said. “We’ve got about 66-67 assets in western Canada in some of the geographies like Manitoba and Saskatoon.”
The new facility will greatly expand the Canadian company’s current crushing ability, he said. The existing crushing plant in Manitoba has the ability to process about 350,000 tons annually. However, the new facility would add the option of hiking production by 1.05m MT every year.
“It’s a very significant increase,” he added.
Market expansion
With the additional production capacity, the new facility offers the opportunity to expand the company’s reach and strengthen current market presence, said Jeworski.
“It does open up some new geographies in terms of meal marketing,” he said.
The firm’s Manitoba plant produces canola meal for the swine, poultry and dairy industries in addition to oil. The new facility also produces livestock meal and oil.
The acquisition “extends and expands” Viterra’s reach without branching into unknown territory, said Jeworski. However, the additional product may allow for either increased traffic in those current areas or more exporting possibilities if the opportunity arises.
Additionally, the plant’s location offers access to the St Lawrence Seaway, along with rail and trucking routes, he said.
“It’s got a lot of options with (being a) swing plant and all the modes of transportation,” he said. “And it is a facility that has exported both oil and meal.”
While it can pull crops in from surrounding areas, it also has the ability to import materials if necessary, he added.