Winnipeg grain firm Parrish and Heimbecker and Cargill’s Canadian grain handling arm plan to share a single port terminal at Thunder Bay, Ont. in a new joint venture.
The two privately-held companies on Thursday announced a letter of intent on a joint venture agreement, in which both firms would own and operate Cargill’s Thunder Bay terminal as equal partners.
Financial terms of the deal weren’t disclosed, except that Cargill will sell its port terminal to the yet-to-be-named joint venture, into which both companies would then divert their incoming grain.
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Cargill’s Thunder Bay terminal, served by CN, has handling capacity for 176,020 tonnes of grains. The port facility dates back to 1910 but was substantially overhauled after Cargill bought it as part of its takeover of National Grain in 1974.
P+H’s smaller multi-product Thunder Bay terminal, meanwhile, “may in the future” be used to handle “commodities not handled by the joint venture,” the companies said Thursday. The P+H terminal has storage capacity for 40,000 tonnes.
Len Penner, president of Cargill’s Canadian operations in Winnipeg, said the deal “is about creating a business arrangement that will help build a long-term sustainable business.
“Both of our terminals have been underutilized in past years,” he said in a release. “With P+H as our partner, we’ll make the business stronger by sharing costs and efficiencies.”
Unionized staff at both the Cargill and P+H terminals already work under a common collective agreement, the companies noted. The joint venture “will continue to abide by the agreement currently in effect.”
“Creating a long-term, sustainable model is what the industry needs to remain competitive, and together we can better adapt to those changes,” P+H president John Heimbecker said in the same release.
