Australia’s largest grain company has announced plans to expand its footprint in Western Canada.
GrainCorp, through a joint venture with large Japanese agricultural cooperative Zen-Noh Group, says it will spend at least C$90 million over the next two years in setting up grain delivery sites in Alberta and Saskatchewan.
“A key part of GrainCorp’s value proposition for international customers is to have a multi-origin offering, so that we are in a position to offer a solution for a broader range of requirements. This gives us greater relevance and a broader platform to engage with the customer, creating more opportunities to offer our services,” said Mark Palmquist, GrainCorp’s managing director and chief executive officer in a news release issued Monday. “Of course, the new business also benefits grain and oilseed growers in the Canadian Prairies, by providing an independent and alternative pathway to market.”
Holding a 50 percent share in the Calgary-based joint venture, GrainCorp plans to invest C$30 million in the construction and commissioning of the sites, with additional debt financing of C$60 million.
The locations haven’t been announced, but the sites will be “part of a fully integrated supply chain for the origination, marketing, storage, handling, distribution and exporting of Canadian grain and oilseed.” Construction is expected to occur from the second half of fiscal 2016 to the end of GrainCorp’s 2018 fiscal year.
The company says it has started discussions on rail and port access.
GrainCorp’s current footprint in Western Canada includes a marketing office in Calgary and Canada Malt Co, with malt plants in Calgary, Montreal and Thunder Bay, as well as multiple elevators in Alberta, Saskatchewan and Manitoba.
The Australian business also plans to leverage Zen-Noh Group’s experience and relationships exporting ag commodities from North America to Japan and other Asian markets. Zen-Noh Grain Corporation ships approximately 12-13 million tonnes of US corn, soybeans and sorghum to Japan and other markets annually.
“This is a good opportunity to grow our business in Canada with a trusted partner. It allows us to strengthen further our ability to supply our customers in Japan and Asia and we look forward to a bright future for the joint venture,” said John Williams, president and CEO of Zen-Noh Grain Corporation.