July 12, 2006

Canadian company Agricore buys US feed company 

Canadian company Agricore United's made its first venture into the US with a US$38.5 million acquistion of Texas-based Hi Pro Feeds last week.

Agricore's feed business, Unifeed, has increased four-fold over the last 12 years through acquisitions and organic growth.

Agricore, based in Winnipeg, Manitoba, has plans to expand beyond western Canada and its main base of operations.

Agricore's operations in Canada have a capacity of 1 million tonnes, which includes processed commodities like steam-rolled corn and premixes.

Hi-Pro has 4 plants in the south-western US with a combined feed production of 500,000 tonnes annually. The acquistion would increase Agricore's total capacity by 50 percent.

The company saw the investment as a hedge against unexpected factors that might cause instability in the market, such as mad cow disease.

Hi-Pro has also expanded beyond cattle feed and branched into dairy feed.

Agricore said Hi-Pro would increase the livestock feed division's earnings contribution to the company from 15 to 22 percent.

Agricore is one of Canada's leading agribusinesses. Besides feed, its operations also involve sales of crop inputs and grain merchandising.