Tuesday, March 20, 2012

Richardsons to Buy Part of Viterra

The Richardson family continues to be one of the strongest business entities in Canada all the while based in Winnipeg.

Today we learn, the Richardsons will pick up part of Viterra as the Regina-based company is bought up by Switzerland's Glencore International.

Despite the sale of large chunks of the Viterra company, it will remain headquartered in Regina.

We didn't end up so well when Viterra bought up Agricore United a in the past decade. Even now, huge gaps in the once filled Canwest building remain open due to the the purchase and closure of the grain offices (compounded by Canwest being grabbed by Shaw as well).

There had been some promises that Winnipeg wouldn't be so bad off from the purchase of Agricore United but alas, hundreds of employees were shed from the head office that was numbered around 500.

And Agricore's loss came on the heels of United Grain Growers and Agricore joining together. At that time, hundreds more lost their jobs. At least in that event, it was two Winnipeg companies joining forces.

As the Canadian Wheat Board ends (with the loss of hundreds of jobs there as well), the once great agricultural enterprises that employed so many seem to be dwindling.

I wonder how long it will be before we ask: how do we preserve the old Wheat Board building or what should go in there?

Anyways, it is hard to have too much sympathy for Viterra given we got thrown under the bus when they took over Agricore. The Richardsons pick up more grain trading business for a shade under a billion. Agrium from Calgary picks up all the retail stores. Glencore picks up the overseas businesses and makes Regina its base in Canada.

It is hard to measure what value that promise has from Glencore. As much as the promise Winnipeg had from Viterra?

Glencore is in the middle of a even greater $90 billion merger with a mining corporation. Hard to imagine where they will be or where their head offices might exist even a few years from now.

Th Richardsons are not likely to go anywhere. With any luck, this will result in more head office jobs and more economic spin offs for the city.

Likewise, Paterson and Cargill appear to be entrenched in the city.

However, the downtown continues to remain littered with hundreds of jobs lost in agriculture. It is hard to imagine that the end of the Canadian Wheat Board will spur a new movement of ag business that will replace what was lost.

And in many cases what does exist may ultimately be owned and controlled in places like Switzerland.

It will be an interesting year ahead.


Anonymous said...

Viterra's presence in Regina is nothing compared to what it once was. They are a Calgary outfit. It's Regina that will really feel the sting from this deal.

The gains for Wpg will be marginal, but at least it stem the loss of ag jobs that's been happening over the last 20 years. Hopefully Wpg can sustain a small cluster of ag companies. With the demise of the wheat board, Calgary has become the new ag capital.

Anonymous said...

RE: What to do with the CWB bldg when all the employees are gone? ... Simple - Ask Impark!

John Dobbin said...

Anon 1: I agree that Viterra had started shifting to Calgary since the merger. One wonders if Glencore will reverse that.

Some of the independent observers seem to think it will be good for Winnipeg in terms of jobs and influence.

However, we have indeed seen some companies move to Calgary such Agrium and the (formerly based in Winnipeg) Louis Dreyfus.

And other cities such as Saskatoon are trying to eat our lunch by trying to lure grain research outfits to them.