Germany’s largest grain trading house, Alfred C. Toepfer International, said Thursday it is taking over two Saskatchewan trading companies, giving it its first processing facilities in Canada.
Toepfer, whose majority shareholder is Archer Daniels Midland, said it has bought Western Grain Trade Ltd. and Western Grain Cleaning and Processing Ltd., processors and exporters of peas, lentils, mustards, flaxseed and various special crops at North Battleford, in the province’s northwest.
The operations of these companies will form the new Western Grain and Processing division within Toepfer, the German company said. No financial details were given.
The deal comes as legislation moves through Canada’s House of Commons to end the Canadian Wheat Board’s long-held marketing monopoly on western Canadian wheat and barley for export or milling, as of August 2012.
That change is expected to cause a sweeping reorganization of Western Canada’s crop handling and processing industry, which is currently dominated by Viterra, Richardson International and Cargill.
Toepfer’s first Canadian foray into processing, albeit with crops not included in the CWB monopoly, is not related to the marketing change, said Lawrence Yakielashek, president of Toepfer Canada.
"We’ve looked at the industry for a long time," Yakielashek said in an interview. "We have a real strong network around the world trading specialty crops and… we wanted to become closer to the farmers as well."
The acquisitions have a strong sales presence in South America, the Middle East, China, South Asia, India and Turkey, which complements Toepfer’s existing business there, Yakielashek said.
Toepfer CEO Gary Towne added, in a statement: "We believe adding processing to Toepfer is vital to ensuring that we continue to offer customers products to meet their growing demands. We also feel very strongly about bringing new market opportunities to farmers."
Toepfer, which has had a Canadian branch since 1974, has worked closely with the CWB as an accredited exporter, meaning it can buy grain from the CWB for resale. After the grain monopoly ends, Prairie farmers will be allowed to sell wheat and barley directly to any buyer they choose.
Some expect the end of the CWB monopoly to affect how much wheat and barley farmers plant, but Yakielashek said any additional acres for grains won’t necessarily come at the expense of specialty crops.
"Producers are going to grow the crops that pay the bills and it’s going to be the commodity that determines what happens," he said.
Included in the acquisition are two processing facilities near North Battleford, which operate three processing lines. The 10 employees at the two plants will become Toepfer employees.
— Reporting for Reuters by Michael Hogan in Hamburg and Rod Nickel in Winnipeg.