World Grain - September 2007 - 76

FEATURE: BLOCKBUSTER DEAL

Pool Elevators and Alberta Wheat Pool
to form Agricore, followed by the merger of United Grain Growers with Agricore to form Agricore United
Burdened with a growing debt load,
SWP struggled to shed itself of hundreds
of small elevators, a grain terminal in Poland, Robin's Foods, XCAN Grain, Premium Brands and Heartland Livestock.

It also dismissed its president, Don
Loewen, and hired Mayo Schmidt, from
the U.S., as its new leader.
With C$1 billion in debt threatening to push SWP into bankruptcy, the
shakeup continued under Schmidt. The
farm newspaper, The Western Producer,
was sold, livestock operations were sold
or shut down, the oilseed crushing plant

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CSP Foods was sold, feed mills were
sold and CanAmera Foods was sold.
But most importantly, in March 2003
SWP underwent debt restructuring during which convertible notes were exchanged for shares in the company.
While SWP had no other choice, the
move from a farmer-owned cooperative
to a publicly traded company meant
the demise of what was once Western
Canada's largest farmer-owned grain
cooperative.
But Schmidt, who joined the pool in
2000 after building a reputation for restructuring businesses at ConAgra and
General Mills, was not finished. He
wanted Western Canada's second-largest grain cooperative, Agricore United.
"There were two lines of thinking,"
Schmidt told World Grain. "One was
that agriculture was entering a new era of
optimism and that there were a number
of events that were beginning to align.
Some of those were the demand from
China and India. Ethanol and biodiesel were also driving
changes. These were
long-term events, but
there were also shortterm events that were
crop events in different countries. For example, in Australia,
Schmidt
there were several
years of drought. In general, food and
food resources were becoming much
more important. The other was the fact
that I saw the opportunity to improve
our financial stability and flexibility by
combining the two companies."
On Aug. 30, in a move made to better
reflect the breadth of its business, SWP
announced that it will now be known as
Viterra (www.viterra.ca), a name that
WG
means "life from the land."
Based in Vancouver, British Columbia, Canada,
Leo Quigley writes for a variety of national
and international publications specializing
in agriculture and transportation. He can be
reached at Quigley@dccnet.com.
We want to hear from you - Send comments and
inquiries to worldgrain@sosland.com. For reprints of
WG articles, e-mail reprints@sosland.com.

For more information, see Page 98.

September 2007 / World Grain / www.World-Grain.com

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World Grain - September 2007

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