With speculation swirling around the privatization of the Canadian Wheat Board, the chief strategy officer for CWB has published an open letter explaining why much of grain marketer’s commercialization plan is being kept confidential. Although she doesn’t mention Farmers of North America’s offer specifically, Dayna Spiring describes why bids to acquire CWB may have been rejected:
Open Letter – December 5, 2014
Following changes to the Canadian Wheat Board Act in 2012 by the Federal Government, CWB has always stated its intention to build a strong and viable CWB in the open market. CWB wants to provide farmers with greater choice, increased competition resulting in better prices, secure access to new markets and customers, and the ability for farmers to pool their grain with a company that they know and trust.
Recently there has been some speculation and inaccuracies regarding CWB’s future and our commercialization plans. We understand that CWB is in a unique position and will address some of the questions that have arisen without jeopardizing our business and putting our farmers- customers or potential investors in an unfair competitive position.
Part of our dilemma is that when the monopoly ended and CWB moved into an open market environment, CWB needed to begin to transition into the same operating conditions as that of our competition. As everyone knows other grain companies are not required to release any confidential commercial information that would disadvantage their operations.
In accordance with the Act, CWB was tasked with providing a commercialization plan to the Government by 2016 and executing on that plan by 2017. CWB has always said it intended to beat those legislated deadlines. For the past two years CWB has been building a network of assets and is on the path towards commercialization.
CWB’s growth strategy requires significant capital. To that end, CWB and its professional advisors have embarked on a rigorous process of looking for a strategic partner that meets a number of criteria, including experience in grain handling, industry expertise and enough capital to continue to expand CWB’s strategic network of grain-handling assets. It is also critically important that an investor support the idea of Western Canadian farmers being provided an opportunity for ownership in CWB going forward.
CWB is currently involved in a commercial process and has engaged expert advisors to assist us. At this time it is inappropriate and in fact detrimental to the process to confirm or deny which companies are interested in partnering with us until we have concluded our due diligence. However, we can say that any bids rejected to date were evaluated by CWB and our advisors using the rigorous criteria listed above. If bids were rejected it was because they did not meet the requirements.
Our objectives are to develop a strong and viable grain-handling company in Canada that can compete with the best in the business and to give farmers an opportunity to have an ownership stake. CWB is not being sold or given away. We are securing an investor to partner with farmers to ensure there is a strong and viable CWB for today and the next generation.
Chief Strategy Officer, CWB