Shareholders in a western Saskatchewan producer car loading firm have approved a deal to sell their loading sites to Regina pulse processor AGT Food and Ingredients for $22 million.
AGT announced Tuesday it has completed its deal, announced in April, to buy the bulk loading assets from Eston, Sask.-based West Central Road and Rail.
The deal would give AGT the company’s bulk loading facilities at Eston, Beechy, Lucky Lake, Dinsmore and Laporte. All five sites are in the area of western Saskatchewan between Kindersley, Rosetown and Swift Current.
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“Facilities in our legacy business in Canada have been capacity-constrained, with high levels of production and customer demand resulting in our need to use some of our value-added processing infrastructure to do bulk-loading programs,” AGT CEO Murad Al-Katib said in a release Tuesday.
The same farmers who grow lentils for AGT are growing durum, he said, and AGT expects the WCRR sites to help it extend its origination options to supply both lentils and durum wheat for pasta production at its Arbel Group operations in Turkey.
Sourcing and bulk loading lentils, peas, durum and other crops for shipment has been a “growing part” of AGT’s business, he said, and the company plans to boost bulk traffic to Turkey “while returning value-added capacity back to our facilities in Canada that are currently doing bulk-load lentil business.”
AGT, he said, views the “turnkey acquisition” of the WCRR sites as offering “augmented capacity, particularly in peak shipping windows,” which will be of help to the company at harvest this fall.
WCRR was first set up in 1997 with plans to buy about 480 km of Canadian National Railway (CN) branch line in the area that was slated for abandonment. CN decided in 2000 to keep the branch line, but grain companies operating on the line had by then either shut or demolished their elevators.
WCRR then refocused on grain gathering, organizing trains of producer cars and eventually setting up its “enhanced” producer car loading systems.
WCRR said in April it would propose to shareholders, at a special meeting in late May to vote on the AGT offer, that West Central would be wound down once the deal is completed. –– AGCanada.com Network
