Buhler Industries and Başak Traktör Tarim Ziraat Ve Iş Makinalari Sanayi Ticaret A.Ş., a subsidiary of ASKO Holding, entered an agreement to purchase common shares held by Russia-based Combine Factory Rostselmash Ltd., and to acquire all outstanding debt Buhler owed to Rostselmash, for $60.5 million.

“We believe that ASKO Holding’s deep understanding and involvement in the agricultural equipment industry, will assist the Company in achieving its immense potential for future growth and innovation.” said Grant Adolph, chief operating officer of Buhler Industries in a news release Wednesday.

Rostselmash owned about 97 per cent of Buhler’s shares. It purchased some 80 per cent of shares in 2007 for $145 million and increased its stake with a $12.25 million purchase of 16.3 per cent of shares in 2021.

Buhler Industries manufactures the Versatile tractor line and Farm King equipment.

It’s heavy ties to Russia led to the company distancing itself from that country’s invasion of Ukraine in February 2022. Buhler put out a statement saying it “operates with autonomy” and its “decisions are made in Canada.” Shortly thereafter, its board accepted the resignation of long-time member Konstantin Babkin, who had Russian political ties.

Also Wednesday, Linamar announced it had reached an agreement to acquire Bourgault Industries Ltd., of St. Brieux, Sask., for $640 million.

Bourgault manufacturers seeding equipment and other ag implements.

“The Bourgault name is synonymous with broad acre agricultural seeding innovation and offers a tremendous opportunity for Linamar to further diversify and grow our agriculture platform, as well as our Industrial segment overall,” said Linda Hasenfratz, Linamar’s CEO, in a news release.

Linamar also owns stakes in MacDon and Salford.

“The Bourgault family is incredibly proud of the legacy we have created both here in in St. Brieux, Saskatchewan, but also around the world,” said Bourgault president Gerry Bourgault in a news release. “We are excited to have our team of over nine-hundred people in Saskatchewan, and over one thousand worldwide, join the Linamar family.”

—Geralyn Wichers is associate digital editor of AGCanada.com. She writes from southeastern Manitoba.

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Winnipeg-based Buhler Industries on Aug. 14 reported net income of $16.1 million on $67.6 million in revenue for its second quarter ending June 30, up from $1.1 million on $57.8 million in the year-earlier Q2.

Buhler said it “achieved higher sales as it begins to see improvements in the supply chain issues experienced over the last two years.”

The company said it also expects increased sales during the rest of 2023, on a “large backlog of sales (and) strong demand for agricultural machinery and equipment.”

Buhler in its second quarter also booked its revenue from the sale of its tillage equipment manufacturing plant at Vegreville, Alta., which it shuttered in 2021. The company closed on the sale of the former Ezee-On plant in April.

The Q2 ledger also includes proceeds from the sale of Buhler’s property at Woodstock, Ont. — on which it has exercised an option to lease back for up to five years.

Buhler said in April that the combined net proceeds from those plus the sale of its property at Fargo, N.D., which it booked separately in its first quarter, came in at $24.3 million. In its Q2 report, it logged the combined Vegreville and Woodstock sales as a gain on disposal of assets valued at $12.4 million.

The company said in July that the sale of those “underutilized assets” has helped it to secure “sufficient capital for current operational needs” — but it also announced at the time it has hired a Toronto firm, Origin Merchant Partners, to identify a new “long-term investment partner” for Buhler.

Buhler said in July it “seeks to bolster its position in the agricultural industry and continue its commitment to serving farmers and dealers with high quality farm equipment.”

The company didn’t say what its future plans would be if a new investment partner is brought on board. It said its “search for the right investment partner is driven by a commitment to preserving the legacy of the iconic Versatile and Farm King brands.”

Buhler also said it wants a partner “who understands and respects the historical significance of these brands, as well as their immense potential for future growth and innovation.”

Shares in Buhler today are about 97 per cent owned by Russian farm equipment firm Rostselmash, while the remaining three per cent are publicly traded and held by employees and other investors. A Buhler representative wasn’t available for comment this week. — Glacier FarmMedia Network

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Buhler Industries, which manufactures the Versatile tractor line and Farm King equipment, is majority-owned by the Russian firm Combine Factory Rostselmash. That firm purchased an 80 per cent stake in Buhler in 2007 and boosted that to 97 per cent ownership in a share acquisition deal announced just before Christmas.

Buhler Industries said in a statement Thursday it “strongly opposed” the invasion and “does not condone this attack.”

The company went on to state “Buhler is not a Russian company. Our values are rooted in North America, where the company has been in operation since 1932.”

Buhler said it “operates with autonomy” and its “decisions are made in Canada.”

According to Buhler’s 2021 fourth-quarter report, however, several senior company leaders are Russian nationals and former Rostselmash managers. Those include president Marat Nogerov, vice-president Maxim Loktionov, CEO Yury Ryazanov, chairman Dmitry Udras and board directors Oleg Gorbunov and Konstantin Babkin.

Babkin is particularly vulnerable to Canadian sanction as a co-founder of Russia’s Action Party, which is said to be allied with Russian President Vladimir Putin and his regime. Udras and Ryazanov are also said to be members of the party.

In 2014, the Ukrainian-Canadian Congress called on the federal government to sanction Babkin for publicly supporting a Russian invasion of Crimea.

Buhler said Thursday it “will continue operations as usual, maintain production targets and continue to build tractors and implements to support farmers in North America.”

The Winnipeg firm said it “appreciate(s) the longstanding relationships we have with our dealer network, suppliers and partners and look(s) for grace during this disturbing time.”

The Canadian government on Thursday announced a new round of sanctions against 62 individuals and entities, including senior Russian ministers, and also said it would cancel export permits to that country. Canada exported about $666 million in goods to Russia in 2019. — Manitoba Co-operator staff, with files from Reuters

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Winnipeg-based, publicly-traded Buhler Industries announced Wednesday that Combine Factory Rostselmash has bought another 16.3 per cent of Buhler shares for $3 per share, or about $12.25 million.

Buhler, whose own product lines include Versatile tractors, combines, seeding and tillage equipment and Farm King implements, also makes the M8 tractor line for Kubota at its Winnipeg plant.

Rostselmash, which bought its 80 per cent stake in 2007, has picked up the additional shares in a private deal with Highland Park Financial, controlled by Buhler board member and former chair John Buhler, the company said.

The deal raises Rostselmash’s stake from 80.4 per cent up to 96.7 per cent of Buhler Industries, which said Wednesday the Russian firm’s latest purchase was made for “investment purposes.”

Buhler’s TSX-traded stock closed Wednesday at $2.95 per share, its lowest value since February.

Starting as a state-owned factory in 1929, Rostselmash started producing combine harvesters in 1931, went publicly traded in 1992 and was taken private in 2000.

The company, based at Rostov-on-Don on the Sea of Azov, today makes combines, forage harvesters and tractors. — Glacier FarmMedia Network

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Farm equipment maker Buhler Industries announced Friday it will halt production at the former Ezee-On manufacturing plant at Vegreville, Alta. in September 2021 and set up that plant’s tillage equipment production lines in Winnipeg.

Products to be made in Winnipeg starting next year include Versatile tandem and offset discs, vertical tillage and high-speed compact discs.

The tillage production line will be set up in the Winnipeg plant’s former component staging and storage area, a move Buhler said will improve the overall plant’s efficiency but also allow the existing tractor assembly lines to step up production by “capitaliz(ing) on existing resources and economies of scale.”

Buhler said demand for its Versatile Fury high-speed compact disc units has “drastically increased” in the past three years, largely from markets in the U.S.

The company also plans to introduce an updated Versatile Viking vertical tillage unit next year and said it expects much of the demand for that tool to come from the U.S. as well.

Making those product lines in Winnipeg “puts them significantly closer to those key markets, reducing logistics time and costs,” the company said, adding it expects “no delays in product delivery” during the move.

Sales of “legacy” tillage tools, including tandem and offset discs under the Versatile and Farm King brands, will continue, Buhler said.

Versatile’s main Canadian parts distribution warehouse, next to the Winnipeg factory, will now handle distribution of tillage parts, a move it said will improve access to an increased parts supply.

Buhler said it will also make more tillage parts available through its U.S. distribution centres at Blair, Nebraska, just north of Omaha, and at West Memphis in Arkansas. The West Memphis warehouse, starting Tuesday (Dec. 1), will be a “primary distribution point” for Versatile service parts.

The decision to halt production at Vegreville marks Buhler’s third such consolidation this year, after closing its Fargo, North Dakota plant in September and moving that work to its plant at Willmar, Minnesota — which in turn was slated earlier this month to close in early 2021.

The Willmar plant’s work is to be then moved north to Buhler’s other major manufacturing plant at Morden, Man.

The company didn’t say Friday what it plans to do with the Vegreville facility after production ends there. Buhler has owned the plant since 2011, when it bought the Ezee-On farm equipment manufacturing business from TerraVest Income Fund.

Ezee-On had made air drills, air carts, offset and tandem discs, post pounders and front-end loaders. The plant began producing tillage equipment for sale under the Versatile and Farm King brands a few months after the acquisition.

Running multiple assembly lines is also nothing new for the Winnipeg plant. Buhler, which bought the Versatile business from CNH in 2000, noted the facility’s previous “long history” making equipment such as swathers, combines, sprayers and cultivators along with its flagship tractors. — Glacier FarmMedia Network

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After consolidating its U.S. manufacturing this summer into one plant at Willmar, Minn., about 140 km west of Minneapolis, the company said Thursday it will also halt production at Willmar in early 2021.

Buhler, which also has Canadian plants at Winnipeg and Morden, Man. and Vegreville, Alta., said Thursday the Morden plant “will now be the primary source of Farm King production” and other product lines now made at Willmar.

Buhler’s Farm King product lines include include augers, mowers, bale carriers, snowblowers, compact implements and tillage tools. The company’s other product lines include Versatile tractors and sprayers.

The company described the Morden plant, about 110 km southwest of Winnipeg, as “one of the original and most efficient Buhler Industries factories.”

Relocating the U.S.-made Farm King product lines to Morden this winter “will optimize output at that facility while capitalizing on the fluctuations in the exchange rate,” Buhler said.

In its third-quarter financials in August, Buhler had said it faced “unpredictability in the agriculture commodities market and fluctuations in the exchange rate, as dealers in Canada market several U.S.-based Farm King-branded products.”

Farm King dealers in Canada and the U.S. “will not experience delays in delivery of whole goods or service parts” as a result of the move, the company said Thursday.

Buhler has operated at Willmar since 2011, when it bought an existing 135,000-square foot facility and set up production lines there for Versatile sprayers and Farm King application equipment.

Other Farm King work was moved to Willmar this summer as the company wound down operations at its Fargo, N.D. plant and shut the latter facility in late September.

Shutting the Willmar operation also follows “further analysis of trends in agriculture and manufacturing,” Buhler said.

Following a run of four straight quarterly net losses, Buhler in August reported a small Q3 profit of about $462,000 on $76.6 million in sales for its third quarter ending June 30, up from a $1.17 million net loss on $64.1 million in sales in the year-earlier period.

The increase in sales stemmed from a “strong return to the U.S. market,” Buhler said at the time, while sales into Canada and Eastern Europe “remain below historical levels.”

Buhler, majority-owned by Russian harvest equipment maker Rostselmash, said in August it has made “improvements in manufacturing efficiencies,” but found “competitive pressures have led to reduced gross margins.”

Losses on foreign exchange and “decreased gain on the sale of surplus assets” have offset its cuts in research and development spending and lower interest costs, the company said.

The ongoing COVID-19 pandemic “will continue to have an impact on the company as farmers, dealers and governments work through the next stages,” Buhler said, but added management couldn’t provide guidance on that impact. — Glacier FarmMedia Network

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The Winnipeg company, whose product lines include Versatile tractors and sprayers and Farm King application, tillage and hay equipment, said Monday it’s “optimizing” its U.S. production to boost efficiency and cut overhead costs at its factory at Willmar, Minn., about 140 km west of Minneapolis.

To do so, the company said the manufacturing now done at Fargo will be relocated to Willmar over the summer, and it will “cease” production at Fargo effective Sept. 30.

Buhler, which also has Canadian plants at Winnipeg and Morden, Man. and Vegreville, Alta., has operated at Willmar since 2011, when it bought an existing 135,000-square foot facility and set up production lines there for its Versatile self-propelled sprayers and Farm King application equipment.

The Fargo plant and warehouse, which today employ about 35 people working on various Farm King product lines, have been owned by Buhler since 2002.

That’s when Alloway Industries, a joint venture between Deere and Co. and Woods Equipment Co., dissolved and the partners sold off their manufacturing site and its equipment.

Consolidating operations at Willmar is expected to “reduce excess manufacturing capacity and will enable the company to remain competitive without compromising quality,” Buhler said in a release.

The company said its decision stems from “unpredictability” in ag commodity markets and flux in the Canada-U.S. exchange rate, as Buhler’s dealers in Canada market several of its “U.S.-based” Farm King-branded products.

Buhler in February booked a net loss of $5.45 million on $49.24 million in revenue for its first quarter ending Dec. 31, down from a $4.44 million loss on $57.33 million in revenue in the year-earlier period.

The company at the time cited “trade uncertainties, bad harvest conditions and poor crop yields” as well as low commodity prices for the drop in revenues. Q1 sales were “below historical levels” in Canada and Eastern Europe, while U.S. sales had “return(ed) to historical levels” for the period. — Glacier FarmMedia Network

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Net incomes plunged last year, and that setback was followed in March by China’s halting purchases of canola, Canada’s biggest crop. Now farmers are turning to government aid to avert disaster, lenders are extending the term on loans and machinery dealers are seeing declining sales.

Prime Minister Justin Trudeau’s Liberals hold only a handful of rural western seats to potentially lose in the October election, but they have also angered eastern dairy farmers for surrendering greater market access in recent trade deals.

Agriculture is not as directly important to Canada’s economy as the service sector, for example, said Brett House, Scotiabank’s deputy chief economist. But farm spending indirectly underpins other sectors, said Alberta Agriculture Minister Devin Dreeshen.

“Farmers reinvest every dollar they get. (The pullback) reverberates throughout the entire economy,” he said.

Shaun Dyrland, who farms near Kyle in western Saskatchewan, said conditions are the toughest in about 20 years, forcing the farm to make its first claim from AgriStability, a federal government program that helps farmers weather losses due to poor crops, rising costs or market disruptions.

“Things were running along pretty good and now we’ve had to make some changes just to make ends meet and make the numbers continue to work,” he said.

Dyrland, 40, has eliminated two hired positions on his fourth-generation farm and cut chemical and fertilizer purchases.

“It’s definitely reminding me of the late ’90s, early 2000s, where we had to really squeeze every penny and make sure every decision was the right one.”

Canadian farmers’ net income plummeted 21 per cent last year to $11.6 billion due to soaring debt and labour costs, marking the lowest income level in seven years. Farmers owed a record-high $106 billion.

Payments from AgriStability have jumped 37 per cent year over year, a spokesman for the federal agriculture department said.

“(Farmers’) stress level is extremely high,” said Wendy McDonald, an agronomist at Manitoba farm consultancy 360 AG. “They need this crop to do well and it’s not off to a great start.”

Canadian farmers have fared relatively better under low commodity prices than U.S. growers in recent years due to a low dollar that helped exports and greater crop diversity, said Ryan Riese, national director of agriculture at Royal Bank of Canada. Now amid harder times, interest in buying farmland is tapering off, he said.

In Ottawa, there is still hope that farmers can withstand a short-term decline.

“They had a good number of years with significant increases (before the downturn). I’m still optimistic,” said federal Agriculture Minister Marie-Claude Bibeau, whose government has increased limits on interest-free farm loans.

But farmers are already making adjustments.

“They’re not buying new equipment. They’re fixing what they have,” said Steve McCabe, executive director of Agricultural Manufacturers of Canada, whose members include Ag Growth International and Buhler Industries.

“Buying is really down from last year.

Farm supplier Nutrien is “particularly concerned for the financial health of Canadian farmers” who are shut out of China, their best export market, said spokesman Will Tigley.

Bankers ‘hoping for soft landing’

Lenders are anxiously penciling out farmers’ growing risk.

“There is a significant amount of nervousness in both the cattle and cash crop sector at the moment,” said Glen Snyder, agribusiness manager for Bank of Montreal in Saskatchewan, Canada’s main canola-growing province.

“I’m hoping for a soft landing, and not a hard one that we experienced in the late 1980s early 90s.”

The prospect of soft crop prices and potential for lower yields raises concerns about farmers’ debt service coverage ratio (DSCR) – a metric closely watched by lenders that indicates a farm’s profitability and ability to manage debt, Snyder said.

Even a well-managed farm could see its DSCR slip into a worrisome range this year if crop receipts decline by 10 per cent, a realistic scenario given Saskatchewan’s drought, Snyder said.

The drop in net income “is a big deal for sure,” said Jean-Philippe Gervais, chief agriculture economist at government lender Farm Credit Canada. “Producers are going to have to be a little bit more careful.”

Gervais said some farmers are spreading their debt over longer periods of time.

“I always felt the good times couldn’t roll forever,” said Dyrland, the Saskatchewan farmer. “Nobody likes to see it come. But I think in agriculture, it’s bound to happen.”

— Reporting for Reuters by Rod Nickel in Winnipeg and Kelsey Johnson in Ottawa.

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Winnipeg manufacturer Buhler Industries, the maker of Versatile tractors, on Thursday announced a “long-term” original equipment manufacturer (OEM) deal with Japan’s Kubota Corp. to “develop and produce a new tractor platform in the mid-range front-wheel assist segment.”

For Kubota, the OEM deal allows it to expand its tractor lineup to a horsepower range above its “currently largest” M7 170-hp line and “strengthen its large tractor business in the North American market.”

Development of the new tractor platform began almost five years ago, Kubota said, and the new higher-horsepower tractors are to be introduced in the U.S. and Canada starting from the second half of 2019.

Production of the new units will begin “immediately,” Buhler added.

The new line will incorporate Kubota’s “proprietary knowhow on ease of operation and functional design” to make new large tractors customized exclusively for the Japanese firm.

For Buhler, which will make the new tractors at its Clarence Avenue factory in Winnipeg, the deal will “increase overall production at the Versatile facility… which will reduce overhead and increase efficiency.”

The Clarence Avenue plant, which according to Buhler has built over 100,000 tractors in its lifetime, makes fixed-frame front-wheel assist tractors from 265 to 365 hp and articulated four-wheel drives from 380 to 610 hp.

Buhler, owned by Russian farm equipment maker Rostselmash since 2007, has operated the plant since 2000, when it bought the Versatile business from New Holland. The Versatile brand dates back to 1966, when the eponymous company began mass-producing articulated four-wheel-drive tractors.

“The Versatile brand has a global reputation in agriculture for building high-horsepower tractors that are reliable and well-built,” Buhler’s chief operating officer, Grant Adolph, said Thursday in a release.

“The result of this agreement is an increase in production at the factory in Winnipeg which will bring additional stability to the supply chain and employees.”

Kubota, whose Canadian and U.S. operations are headquartered at Markham, Ont. and Grapevine, Tex. respectively, today supplies over 1,100 dealerships in the U.S. and 150 in Canada.

The company’s compact and sub-compact tractors for the North American market are assembled in the U.S. at Gainesville and Jefferson, Georgia. Kubota’s current highest-horsepower tractor, the M7, is built at the company’s plant at Bierne in northern France, just south of Dunkirk.

“Today’s announcement will allow us to broaden our horizons as our engineers will work with Buhler’s employees, in order to develop and produce tractors specific to our local market’s needs and tailored for their applications,” Kubota Canada president Bob Hickey said in a separate release. — Glacier FarmMedia Network

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Citing “depressed” sales due to “weak” commodity prices, the Winnipeg company on Thursday booked a net loss of $4.4 million on $57.3 million in revenues for its first quarter ending Dec. 31, down from a $5.8 million loss on $74.6 million in its year-earlier Q1.

Buhler, the maker of Versatile tractors and Farm King implements, said it already expects its sales in fiscal 2019 to come in below its 2018 level of $288 million.

However, it said Thursday, it also aims to “significantly reduce its losses in 2019 as it focuses on margin improvement.”

Specifically, Buhler said it has “already reduced overhead costs at the beginning of the year through staff reductions and other cost-cutting measures.”

The company also noted a US$5 million (C$6.62 million) loan from its controlling shareholder during the quarter.

That shareholder, Russian ag equipment maker Rostselmash, is “willing to provide financial support until profitability improves,” Buhler said.

Buhler also reiterated Thursday it plans to start shipping its new 170- to 250-hp tractor platform early in fiscal 2019, following “significant investments in product development over the last few years.” — Glacier FarmMedia Network

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