Judge Shawn Smith of Court of Queen’s Bench in Saskatoon on Friday approved the sale of Morris to a numbered-company arm of Superior Farms Solutions Ltd. (SFSL), the operator of Rite Way Manufacturing. The numbered company will operate as “Morris Equipment.”

The deal will see Morris’ Saskatoon head office, its Minnedosa, Man. manufacturing plant and its patents and related intellectual property go to Rite Way. The deal’s financial terms and dollar amounts are redacted in court documents posted online.

Rite Way and Morris’ court-appointed monitor have agreed to target a closing date of Dec. 31 for the deal.

In its report to the court on Dec. 11, Alvarez and Marsal, the monitor for Morris, described the deal as “the culmination of all of the efforts and resources expended by Morris Group and its stakeholders over the course of the last 12 months.”

If approved and completed, the monitor said, the deal “will preserve the core components of the 90-year-old farm equipment manufacturing enterprise carried on by Morris Group (and its predecessors) continuously from the 1920s until the present date.”

However, in its “exhaustive sale process” to find an investor or buyer for Morris, “no party had expressed to the monitor an intention to purchase, acquire or operate the Yorkton plant,” the monitor said.

The deal as reached means the Yorkton plant will close down when the deal is completed, officially putting the plant’s 20 remaining employees and another 50 laid-off employees out of work.

Without a letter of understanding, as was reached earlier this year between the company and the Yorkton plant’s union, the plant’s collective bargaining agreement would have required any buyer to “take on a degree of labour relations risk for their existing business operations” even if it didn’t buy the Yorkton facility.

The Yorkton plant’s workers, members of the Retail, Wholesale and Department Store Union Local 955, approved the terms of the letter in August in a vote at an open-air meeting at a Yorkton baseball diamond.

The exact contents of the letter were kept confidential in the monitor’s Dec. 11 report. It calls for creation of a fund to manage payments to Yorkton plant employees “whose employment is anticipated to be terminated.”

The importance of the letter of understanding to the deal “on which the survival of this business enterprise is based cannot be overstated,” Alvarez and Marsal wrote in its report.

BMO, which as Morris’ principal secured creditor is owed about $25 million, has said it supports the proposed sale but also now plans to file for an application-for-bankruptcy order against Morris Group, likely to be heard in court next month.

A bankruptcy would see the employment terminated for Morris’ Saskatoon and Minnedosa staff but, as the monitor’s report puts it, “reasonable prospects exist” for those staff to get employment with the new owner.

Operating in creditor protection since January this year, Morris’ businesses include manufacturing air carts, drills, seeders, harrow bars and bale carriers.

Founded in 1929 as Morris Rod-Weeder, the company was owned by the Morris family up until 2007, when it was sold to an ownership group led by then-CEO Casey Davis. Another ownership group, led by Ben Voss replacing Davis as CEO, took majority control in 2017.

Morris has operated a plant at Yorkton since 1949 and at Minnedosa since 1960, and went on to expand both plants several times. A company-owned dealership and service centre at Virden, Man. closed earlier this year.

Rite Way, founded by Regina machine shop owner Les Hulicsko, is today headquartered in Regina but has its main plant at Imperial, Sask., about 130 km north of the city. Hulicsko, who began building rock pickers in 1972, sold the business in 2012.

Apart from rock pickers and rock windrowers, Rite Way’s product lines today include land rollers, heavy harrows, rotary harrows, crimper rollers, bale carts, grapples and high-speed compact discs. — Glacier FarmMedia Network

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Calgary consultancy Alvarez and Marsal, the court-appointed monitor for Morris, said Tuesday in its latest report to Court of Queen’s Bench in Saskatoon it recommends approval of a sale and vesting order, clearing the way for Morris’ sale to Superior Farms Solutions Ltd. (SFSL), the operator of Rite Way Manufacturing.

The report also recommends Morris’ creditor protection, which has been in place since Jan. 8 with several extensions and otherwise expires Friday, be extended again to Nov. 30.

Alvarez and Marsal said it expects the “transactions contemplated” in the proposed deal to close on or before Nov. 15, and has “continued to work towards satisfying the remaining conditions” of asset purchase agreements (APAs) with SFSL for Morris.

The monitor said it believes it’s appropriate to seek a sale and vesting order now, since it’s working to address those outstanding conditions on or before Friday (Sept. 18). The APAs, it noted, have the approval of BMO, Morris’ largest secured creditor.

The APAs, Alvarez and Marsal said, “represent the highest and best offer received for the assets” of Morris, and a deal with Rite Way “would be more beneficial to (Morris’) creditors than a sale or disposition under a bankruptcy given the offers previously received.”

Remaining conditions for a deal include SFSL reaching an acceptable financing arrangement with its lender — and for Morris to negotiate an “acceptable arrangement” with the union representing employees at its Yorkton, Sask. manufacturing plant.

On the latter, Alvarez and Marsal said a letter of understanding between Morris and the Retail, Wholesale and Department Store Union Local 955 was drafted and submitted to union members. The membership then approved the terms of the letter on Aug. 26 in a vote at an open-air meeting at a Yorkton baseball diamond.

That letter proposes setting up a fund to manage payments to an unspecified number of Yorkton plant employees “whose employment is anticipated to be terminated” once the sale closes.

Further details weren’t available; the monitor has also asked Queen’s Bench to place the letter under confidential seal along with the proposed APAs.

Apart from its plant at Yorkton, Morris also has a plant at Minnedosa, Man. The Saskatoon-based company’s businesses include manufacturing air carts, drills, seeders, harrow bars and bale carriers.

Founded in 1929 as Morris Rod-Weeder, the company was owned by the Morris family up until 2007, when it was sold to an ownership group led by then-CEO Casey Davis. Another ownership group, led by Ben Voss replacing Davis as CEO, took majority control in 2017.

Apart from BMO, Morris’ secured creditors include Avrio, Kubota Canada, Wells Fargo and the financing arm of fabricating equipment maker Trumpf, among others. Unsecured creditors include Western Economic Diversification Canada and various trade vendors.

Rite Way, founded by Regina machine shop owner Les Hulicsko, is today headquartered in Regina but has its main plant at Imperial, Sask., about 130 km north of the city. Hulicsko, who began building rock pickers in 1972, sold the business in 2012.

Apart from rock pickers and rock windrowers, Rite Way’s product lines today include land rollers, heavy harrows, rotary harrows, crimper rollers, bale carts, grapples and high-speed compact discs. — Glacier FarmMedia Network

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Calgary consultancy Alvarez and Marsal said in a report Tuesday it received a letter of intent for a “proposed sale transaction” from Superior Farms Solutions Ltd. (SFSL), the operator of Rite Way Manufacturing.

Alvarez and Marsal, the court-appointed creditor protection monitor for Morris, said it had worked in “extensive negotiations” with SFSL — and with the support of BMO, Morris’ largest secured creditor — to execute the letter of intent last Friday.

Details of the Rite Way proposal aren’t available. An order, to be submitted for approval Friday at Court of Queen’s Bench in Saskatoon, has been drafted requiring that the letter of intent be sealed as confidential for now.

The draft order would also extend Saskatoon-based Morris’ creditor protection to July 3. The company has been in creditor protection since Jan. 8 and has since been granted three extensions, the most recent of which is due to expire Friday.

Alvarez and Marsal, in asking that the letter be sealed, said disclosing information about the Rite Way proposal “could potentially jeopardize the Monitor’s efforts to attract future offers” for Morris’ assets.

The monitor had got court approval on Jan. 16 for a “sales and investment solicitation process” for Morris — but it said in its May 6 report that the process hadn’t led to an “acceptable offer.” It then went back to talk to parties that had shown “continued willingness” for a deal.

Though the Rite Way letter of intent is non-binding, the monitor said it’s of the view that reaching a deal by June 19, with a target closing date of June 30, “appears to be achievable.”

Rite Way, founded by Regina machine shop owner Les Hulicsko, is today headquartered in Regina but has its main plant at Imperial, Sask., about 130 km north of the city. Hulicsko, who began building rock pickers in 1972, sold the business in 2012.

Apart from rock pickers and rock windrowers, the company’s product lines today include land rollers, heavy harrows, rotary harrows, crimper rollers, bale carts, grapples and high-speed compact discs.

Saskatoon-based Morris, founded in 1929 as Morris Rod-Weeder, today has plants at Yorkton, Sask. and Minnedosa, Man., making air carts, drills, seeders, harrow bars and bale carriers.

The company was owned by the Morris family up until 2007 when it was sold to an ownership group led by then-CEO Casey Davis. Another ownership group, led by Ben Voss replacing Davis as CEO, took majority control of Morris in 2017.

Apart from BMO, Morris’ secured creditors include Avrio, Kubota Canada, Wells Fargo and the financing arm of fabricating equipment maker Trumpf, among others. Unsecured creditors include Western Economic Diversification Canada and various trade vendors.

A company-owned sales and service centre at Virden, Man. was shut down in mid-March and some “redundant assets” of that business were sold to auctioneer Ritchie Bros. to be included in a March 31 sale.

Other assets and inventory from the Morris Sales and Service site at Virden are expected to either be sold or relocated to Morris Industries sites by the end of this month, Alvarez and Marsal said in its report. — Glacier FarmMedia Network

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The company was approved for creditor protection Jan. 8, 2020 by a Saskatchewan court.

The company has since been embroiled in restructuring efforts, including a “wind-down” of Morris Sales and Service.

The company was “saddened,” to announce the closure, a statement on the Morris Industries website states.

The company claims that Morris Sales and Service, “has been unable to generate the liquidity required for continued operations.”

“The Virden store and its loyal employees have served the local community and surrounding area for the last 53 years,” the statement read.

The company went on to urging Morris brand customers to check for the next closest dealer now that the Virden location is closed.

David Draper, former sales staff with the dealership, said they received final notice of the closure March 4, although the news was expected.

Last year, the company had told the dealership that it would be shutting its doors, although the timeline for the closure was pushed back several times.

Farmers with Morris equipment will now have to look further afield for parts, staff at the former dealership have said.

Draper says the next likely location for Morris parts and service would be Van L Equipment in Reston, Sask., or even the company’s manufacturing plant in Yorkton.

Local farmers and Virden residents, likewise, will likely feel the loss of local service.

Those with Kubota lawn mowers will likely have to look to Brandon for service.

Options explored

Staff at the now closed dealership say they are not giving up hope quite yet. During a public meeting March 11, Draper said they were hoping to hear from another company wanting to set up shop in Virden, allowing them to continue the business under a different agreement.

“We’ve been looking at different options to try and keep it in town,” he said.

The dealership’s “hands have been tied until this point,” due to dealer agreements and the ongoing credit protection proceedings, he noted.

Morris Industries would have had to split their dealer agreements or be bought out for that kind of deal to happen, he added.

They have heard from several companies who have noted a gap in dealerships between Brandon and Moosomin, according to Draper.

“Different companies are looking for different things so to put a whole package together, to say that that’s happening, I can’t say that,” he said.

Keeping Kubota, another major company to sell out of Morris Sales and Service in Virden, will be a challenge without Morris Industries, Draper told the room, although he has also not written off the company’s future involvement entirely.

At the same time, residents were told during the March 11 meeting, “you’d need a lot of Kubotas,” to equal the business the dealership had derived from Morris air seeders.

“We don’t want to give up,” Draper said. “But there’s no building, nothing in place yet to make that happen.”

The dealership had been renting a temporary building for months prior to the closure. Morris Industries initially had plans last year to build a new location for the business after selling the original building.

The end of their relationship with Morris Industries also signals an end to that rental, Draper said.

The Municipality of Wallace-Woodworth has incentives in the works that they hope will entice businesses to the area, such as a new potential partner for the dealership.

The municipal council hired an economic development officer last fall. The incentives are not yet set in stone, although Reeve Clayton Canart noted that a tax rebate based on assessment has been proposed.

“I just think that it’s disappointing to the area if it goes ahead and closes,” he said of Morris Sales and Service. “They’ve been in business here for 50-some years. They have a real history in the area, a real following of clients with their products and service — lots of parts, I know, and they’ve employed a lot of people and cover a big area for our surroundings.”

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The Court of Queen’s Bench in Saskatoon on Wednesday approved the Morris Group’s Jan. 3 application, which stays any proceedings or actions against the company until Jan. 18 at the earliest.

Saskatoon-based Morris, founded in 1929 as Morris Rod-Weeder, today has plants at Yorkton, Sask. and Minnedosa, Man., and makes equipment including seeders, drills, air carts, packer harrow bars and bale carriers.

The company was owned by the Morris family up until 2007 when it was sold to an ownership group led by then-CEO Casey Davis. Another ownership group, led by Ben Voss replacing Davis as CEO, took majority control of Morris in 2017.

Morris’ secured creditors include BMO, Avrio, Kubota Canada, Wells Fargo and the financing arm of fabricating equipment maker Trumpf, among others. Unsecured creditors include Western Economic Diversification Canada and various trade vendors.

Morris, which sells through dealer networks in Canada, the U.S., Australia and Eastern Europe, pointed in its Jan. 3 application to “significant losses” in recent years due to “the unfortunate combination of multiple factors.”

Listed first among those factors were rising overhead and production costs from expanding the business and introducing both its proprietary new ShieldCore welding technology and, in 2018, a new product line, the Quantum Air Drill.

On its launch, the Quantum was a success for Morris in Canada and abroad, particularly in Australia, which typically accounts for about 30 per cent of the company’s sales, according to Morris chief operating officer Kevin Adair in a Jan. 3 affidavit.

However, the Quantum’s drill openers developed problems, which in North America were dealt with through an upgrade program. But in Australia — where the units come under more wear and tear due to heat, dryness and soil conditions and a longer growing season — the problems called for changes to the design and “complete replacement” of the drill openers.

Given that drill openers make up about 40 per cent of the air drill’s unit cost, the resulting warranty issues called for “a significant capital investment far beyond any foreseeable estimates,” the company said.

On top of the Quantum issues, China’s ban on Canadian canola seed imports and “inclement weather conditions in successive crop years” cut into Morris’ sales in Western Canada, while the 2018 tariff fight between the U.S. and Canada led to added raw material costs, Adair said.

Furthermore, he said, up against lower revenues and greater debt, the company in 2019 lost access to a “factoring” facility previously provided by National Bank of Canada.

Losing that credit facility — which previously allowed Morris to improve its cash flow through early access to insured receivables in Australia — keeps the company from getting at about $10.8 million in receivables until late April this year.

With limited demand for new machinery, Adair said, Morris is also faced with “significant inventory” of completed equipment, work in progress and raw materials. It also has “floor planning” arrangements with its dealers, in which the company takes on a portion of the dealerships’ carrying costs.

Morris started short-term cost-cutting in September 2019, including “partial shutdowns” at Yorkton and Minnedosa as well as salary cuts and work-share programs, he added.

As of now, he said, the company’s restructuring strategy may also include, among other options:

• consolidating manufacturing into a single plant and selling off other facilities and equipment;
• auctioning off “older-generation” products and shuffling inventory between dealerships to cut its floor-planning costs;
• relocating to a smaller head office and/or cutting head office and support staff positions;
• winding down a company-owned equipment dealership at Virden, Man.; and/or
• working with its secured creditors and its court-appointed monitor, Alvarez and Marsal Canada, on a “sale and investor solicitation process.”

As of Jan. 3, Adair said, the Morris Group has 134 employees, and “further reductions” to its workforce will be necessary.

However, he said, given “time and interim financing,” the company believes it can “weather the present difficulties” and rehire laid-off staff when production resumes. — Glacier FarmMedia Network

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Morris on Tuesday announced its president, Ben Voss — a Saskatoon engineer and farmer, and one of the players in the new investment group — has also been named CEO, replacing Casey Davis.

Davis, who until now was also Morris’ majority shareholder, will remain a minority shareholder and a member of the company’s board of directors, moving to an “advisory” role.

Morris, founded by George Morris as Morris Rod-Weeder in 1929, is based in Saskatoon and also has manufacturing plants at Yorkton, Sask. and Minnedosa, Man. The company’s product lines today include air seeders, air carts, air drills, press drills, harrow bars and bale carriers.

Morris’ president since 2015, Voss came to the company from a stint as CEO for MLTC Resource Development, a private-equity partnership owned by the nine Meadow Lake First Nations in northwestern Saskatchewan. Voss also owns a fourth-generation grain farm at Spiritwood, Sask., about 150 km southeast of Meadow Lake.

Voss and Davis, Morris said, made a “joint decision” to transition majority ownership to the investor group, led by Voss and including Calgary investment firms Avrio Capital and Lamont Brown Group.

The sizes of the various players’ new investments in Morris weren’t disclosed Tuesday.

For Avrio, whose partners Aki Georgacacos and Steven Leakos also now join Morris’ board, the Morris stake is billed as one of its “largest investments to date.”

Avrio, in a separate release Tuesday, said its stake is part of a $20 million deployment it made across three companies, also including mushroom producer M2 and plant genetics firm Phytelligence. Of that amount, Avrio said it had committed $6 million to Phytelligence.

“We are delighted to have attracted Avrio to lead the recapitalization of our company,” Voss said in Avrio’s release, citing its “depth of food and agriculture expertise and track record.”

“With its strong market position and a renewed commitment to the company’s core values of innovation and service that has built the Morris legacy, we believe the opportunities to grow this business are limitless,” Leakos said in the same release.

Lamont Brown Group is billed as a “family office” set up by businessman Keith Brown, who launched Saskatchewan trailer manufacturer Trailtech and also operates a farmland investment company.

“(W)e are all together today launching the next generation of Morris,” Brown said Tuesday in Morris’ release, noting “we know Morris, Ben Voss and Avrio and we couldn’t be happier that all these ingredients are combined in this very exciting business opportunity.”

Morris on Tuesday billed the new investment overall as “a significant commitment to growth and re-investment in the company” and said it will be “undertaking an ambitious and exciting plan as a market leader, playing a key role in the future of farming around the world.”

“There are existing and evolving market opportunities that will continue to allow Morris to grow,” said Davis, who had been Morris’ CEO since 2001 and bought control of the company from Wendy Morris in 2007. — AGCanada.com Network

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The funding support will be a co-investment with Morris to accelerate implementation of new manufacturing technology that will incorporate advanced features in their products and position the company to remain globally competitive, a federal release says.

The new technology is expected to result in a new generation of equipment that benefit farmers with longer product life cycles through increased durability and performance, the release says. This technology enables Morris to offer advanced technology to farmers around the world and expand the company’s global competitiveness.

Since 1929, Morris has developed and manufactured high-quality equipment and is recognized for farmer-inspired innovative technology and responsive customer support. Their products are sold extensively through Canada, the USA, and Europe, as well as Africa, Asia, Australia, and New Zealand.

WINN aims to bridge the gap identified in pre-commercialization funding for small- and medium-sized enterprises (SMEs), assisting them in the process of bringing their ideas to market-ready products, processes, and services.

Announced in October 2013, WINN will invest $100 million over 5 years in the form of repayable contributions to for-profit SMEs based in Western Canada.

Also announced Friday, Saskatchewan Trade and Export Partnership (STEP) will receive $700,000 through the Western Diversification Program (WDP) to rent trade show floor space at Agritechnica 2017 in Hanover, Germany, a federal release said.

Morris will showcase its new features in its products when it attends Agritechnica in November, along with more than 40 western Canadian agricultural equipment manufacturers, agricultural service companies, and technology companies.

Agritechnica, with an attendance of 450,000 visitors from over 75 countries, is the world’s most important trade show for western Canadian companies.

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A lot of the Big Iron on display for 2012 will be showcasing not just equipment, but some new, factory-installed technology to help make farmers more efficient and environmentally friendly.

A recurring theme for 2012 is the new Canadian Tier 4 emission standards for all off-road engines, including farm equipment, which comes into effect January 16, 2012 and applies to all equipment produced after that date. Many of the new models on display are Tier 4 compliant.

John Deere heads up the technology offerings with its new JD FarmSight, which uses wireless technology to link operators, farm managers and dealers. The technology helps them gather and manage information via their mobile devices or laptops, to optimize farm and equipment operations.

JD FarmSight, which is standard on all 2012 John Deere tractors and combines, includes its JDLink telematics technology system, which allows customers to monitor machine performance and create curfews and geo-fences.

Sumo subsoiler

Agco will feature three brand new products: The Massey Ferguson 9500 series Combine, Fendt 800 series tractor and a new Massey Ferguson SP Windrower, all of which will be seen in Manitoba for the first time. All are Tier 4 compliant and new features and technologies.

Local Brandon dealer, Hepson Equipment will feature its ever popular Claas Jaguar Harvesters, and a couple of new products: the Sumo subsoiler, built in England and Salford Vertical tillage systems.

Manure spreaders can have a tough time holding up to the rigours of the Prairie landscape and conditions, but Degelman Equipment has a tough, rugged new model which can handle the impact of rocks, concrete and other materials that get caught up with the manure. It has a 60-foot spread and comes in two sizes: the M28 can hold 28 tons and the M34 has a 34-ton capacity.

Kuhn will be featuring its LSB1290 square baler with crop-processing capabilities and a patented six-twine knotting system. Its VB2190 round baler features an automatic binding system.

Look out also for H & L Motors of Glenboro, that will have some new vario-transmission Duetz Fahr tractors on display.

Versatile will unveil its new line of IT4, Tier 4 compliant, 4WD tractors, which range in size from 350 hp to 550 hp. It’s also unveiling a recently added line of precision seeding equipment, featuring the DH730 air drill and DH730 air cart.

New generation

MacDon has a new generation of windrowers (the M155 and M105) which offer increased horsepower via new Tier 3 Cummins engines, as well as all new cab suspension with the M155 model. Equipped with Intermediate Speed Control, all header functions operate at full power with reduced engine r.p.m. for increased fuel savings.

All of the T6, 7, 8 and 9 series tractors and combines on display at the Manitoba New Holland Dealers Association exhibit will be Tier 4 compliant and range from a small chore tractor right up to a 630-hp 4WD. Also on display will be their recently launched, 200 model skid steer, which features a roomy, comfortable cab and incorporates New Holland’s patented vertical lift Super Boom design for better height and reach.

A big story at the Morris Industries stand is its latest C2 Contour Drill that features a new shank design which sheds trash easier and faster while the “true one-to-one parallel linkage gives outstanding seed depth and more yield potential,” says marketing communications manager, Darrel Schindel. Still in the vein of precision seeding, they offer a new 650-bushel tow-between air cart, with a conveyor auger that loads and unloads at 60 bu./minute.

On the technology front, Morris will unveil its Input Control Technology, which works with a GPS system to shut off modules of the seeding unit to help conserve inputs and reduce costs due to overseeding.

An improved engine air filtration system and a Pro700 monitor in the cab are just two of the new features on the 2012, Tier 4, Case IH 8230 combine, which has 30 more hp than the previous model. It has a redesigned spreader system, an unload auger long enough for a 45-foot head and an increased unload rate of four bu./second. There is also the option of a more efficient 40-blade magnacut chopper, and all 30 series Case IH combines will feature fuel saving Tier 4 SCR technology.

Vertical tillage

The new Case IH 330 Turbo vertical tillage unit is designed to scatter, not streak residue. Its design includes a levelling ability to fill shallow wheel tracks and a three-dimensional soil action which “improves aeration, residue mixing, soil warming, weed removal and levels the soil surface for planting,” says Trevor Hardy, crop production sales specialist for Western Canada.

A new high-horsepower 2013 CVT Magnum concept tractor will also be shown at the Case IH booth. The CVT transmission will be available in Magnum 235- to 370-hp models. The all new Continuously Variable Transmission (CVT) has been designed to transfer torque efficiently to the ground using (Automatic Productivity Management) APM Diesel Saver technology, providing “user-friendly, intuitive speed settings and control,” says Darryl Priel, Case IH tractor product specialist.

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Bothwell Cheese won two first-place trophies at the prestigious 82nd Annual British Empire Cheese Show. This is the fourth year running the Manitoba-based cheese maker has taken first place with its marble cheddar and its first first for its Monterey Jack. “This award recognizes the extraordinary talent of our staff – starting with the cheese makers and extending to everyone. It’s owing to their great work and dedication that our cheese is as good as it is,” said Bothwell Cheese president and CEO Ivan Balenovic.

Elevating the pulse:

The federal government is investing $4.4 million into four projects designed to assist the pulse industry with communications, marketing, research and transportation. The projects being supported will promote pulse products as environmentally friendly, develop health food markets, and improve transportation infrastructure, according to a federal release. The funds are being dispersed through the AgriFlexibility Fund and the AgriMarketing program.

Correction:

While the article “Prairie manufacturers target new markets abroad” (Co-operator, Dec. 3, page 1) correctly identifies Don Henry as the chief operating officer of farm equipment maker Morris Industries of Saskatoon, a “pull quote” attached to the article incorrectly identifies him as an employee of Behlen Industries of Brandon. We regret the error.

Top graziers:

The Manitoba Grazing School honoured three farming families as Graziers of the Year last week. This year’s winners are Alan and Rhonda Vergouwen, who are part of an extended family farm operation at Toutes Aids, John and Kelsey Beasley of Boggy Creek, and Ted, Becky, and Matt Artz of Lyleton.

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“We’re showing in a big way and hope that our customers from eastern Europe are able to attend.”

– DON HENRY, BEHLEN

Walking among the displays at Agritechnica, the world’s largest farm machinery exhibition held here in November, anyone from Manitoba or Saskatchewan could be forgiven for feeling a little proud. Canadian and provincial flags were flying at two pavilions where Prairie equipment manufacturers were using the show to help make their presence known to the world.

Although the Prairies have long been associated with agriculture, farm equipment manufacturing has historically been centred in southern Ontario. But times have changed. Today, Manitoba and Saskatchewan together account for the lion’s share of Canadian agricultural machinery exports, more, in fact, than all other regions of the country combined.

Jointly, international exports of agricultural machinery from Manitoba and Saskatchewan in 2008 amounted to over $856 million, according to Manitoba Trade and Investment statistics. And that figure has been steadily growing, increasing by 55 per cent since 2005. Most other provinces, with the exception of Alberta, have shown small declines over the same period.

There are several reasons accounting for the growth of agricultural manufacturing on the Prairies, but the old expression “build a better mousetrap and the world will beat a path to your door” may help explain it best.

Three or four decades ago, many of today’s Prairie manufacturers were nothing more than creative individuals trying to design a better implement inside farm workshops. With the rapid adoption of no-till technology in various regions around the world, many of those on-farm inventions springboarded fledgling companies into global competitors.

That kind of homegrown evolution isn’t new to farm machinery development. John Deere originally launched the modern-day giant corporation with his invention of a self-cleaning plow that outperformed others in the thick Midwestern soils. Many Manitoba and Saskatchewan implement manufacturers now seem to be following a similar path to establishing a global presence.

TARGETING SIMILAR CONDITIONS

For most, tackling markets in Australia and eastern Europe, where the climate and growing conditions are similar to those at home, is a logical choice. So far, buyers in those parts of the world have been taking notice, especially of seeding equipment.

“Appetite for the product is very strong (in those regions),” says Don Henry, chief operating officer for Morris Industries, which has been using the biannual Agritechnica exhibition for several years to display its equipment and help attract foreign buyers.

Because of Agritechnica’s location and sheer size, it attracts many potential buyers from eastern Europe, exactly those customers Prairie manufacturers want to talk to. “Agritechnica has been a very, very good show,” says Henry. “(The show) attracts planeloads and busloads of customers from eastern Europe because it is so large.”

But with the current economic crisis looming large over international sales, particularly those to the newly independent states in eastern Europe, Canadian manufacturers have seen a lull in exports, and the short-term prospects for future sales are unclear. “We don’t know how it’s going to be this year with the uncertainty,” adds Henry. We’re showing in a big way and hope that our customers from eastern Europe are able to attend.”

While Morris Industries is a veteran when it comes to showing equipment at Agritechnica, at least one other Prairie company is trying it for the first time this year.

“It’s a big leap for us,” says Trent Meyer of Brandon-based Behlen Industries. “It’s the first time we’ve ever had a display in Europe.”

The importance of being part of a major machinery exhibition with a worldwide attraction lured Behlen to Agritechnica. “The key is to be at a show like this, because the important decision makers are at these kinds of shows,” says Meyer.

PROVINCIAL CO-OPERATION

In many ways, global marketing has been a team effort on the part of Prairie manufacturers and provincial export development agencies. Manitoba Trade and Investment along with Saskatchewan Trade and Export Partnership have been

working closely with manufacturers, helping establish global trading contacts. And, Meyer adds, networking with other Prairie companies experienced in overseas sales has made it easier for firms like Behlen that just are beginning to target that market.

As those efforts continue to focus primarily on eastern Europe, Canadian companies haven’t entirely abandoned the prospect of increasing sales in the West. But that may be a much tougher job. “(Western) Europe is a fairly mature market in a lot of ways, but definitely there is some room for us to manoeuvre in there and get some market share,” says Meyer.

Henry agrees with that assessment. “I think there are some opportunities in western Europe. But there are a lot of strong manufacturers there. And it’s a little bit different from a farming practices standpoint.”

Another consideration is the restrictive regulations concerning equipment design and transportation to consider. They pose additional challenges for Canadian manufacturers. Redesigning equipment to meet those requirements can make it an unprofitable venture for some.

TRADE BARRIERS

But selling into eastern Europe isn’t without its problems, either. “The culture is different, and language is a huge barrier,” says Henry. “But going into the field and doing the work is very similar to here.”

That similarity has many manufacturers willing to make the effort to develop markets there. However, the most troublesome obstacle facing some Canadian exporters may be protective trade barriers.

The restrictive trade policies of some former Sovietbloc countries, particularly Russia, have caught the attention of European machinery manufacturers as well. One expert on a panel assembled by Germany’s Agr icultural Machinery Association, who gathered at Agritechnica to discuss machinery exports, says “an uncertain legal situation” pertaining to imports now exists in Russia.

That country mandates a level of local investment for manufacturers at tempt ing to import some machines, including tractors. However, it is unclear if that investment will then qualify companies as domestic manufacturers or if they will still be considered importers. That is an important distinction, because Russia’s attempt to protect domestic manufacturing by imposing an import tariff based on horsepower ratings has severely curtailed imports of western tractors.

Difficulties such as that, combined with a credit shortfall and devalued currency, have led to a dramatic drop in overall western machinery imports into the country. For German manufacturers, Russia has fallen from second to seventh place as a destination for agricultural machinery exports.

But for Canadian manufacturers who are intent on growing their companies, overseas trade is essential. “You can only do so much in your own backyard,” says Meyer. That leaves Prairie manufacturers with little choice but to cope with the inevitable difficulties. And, for most, their track record so far suggests they’ve been doing a pretty good job of it.

In the future, continuing to show their equipment at Agritechnica remains a key element for many. Corporate managers seem to agree shows like that are extremely valuable in exposing their products to potential customers in foreign markets.

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