The sign at Seed Hawk’s air drill manufacturing facility in rural Saskatchewan says “Welcome.” Maybe, though, it should now be “Välkommen,” seeing that Väderstad, a global tillage and seeding equipment brand founded and still headquartered in Sweden acquired a minority interest in Seed Hawk in 2007, and earlier this year took over its former Canadian partner.
“We have been part of Seed Hawk since 2007 and we know each other very well,” said Christina Stark, CEO and managing director of Väderstad, during an exclusive interview with Country Guide earlier this summer. “So it was actually a very natural step when we bought the rest. We are both technically innovative, driven companies. And we are always thinking of how we can develop products that are best for farmers.”
It was that technical innovation that actually led to tighter integration between the two brands, and it’s ultimately what drove executives in their respective corner offices to realize that a Swedish takeover made sense from both sides of the Atlantic.
“They were looking at how to get (the new Väderstad Tempo high-speed corn planter) into the North American market,” says Pat Beaujot, former president of Seed Hawk and now its director of strategic market development.
- More Country Guide with ‘Machinery Guide’: A quick look at the Seed Hawk Tempo planter
“We started talking about how are we going to do this. We’ve got a company that they own 49 per cent of that wants to be a part of the U.S. corn market. For freight reasons they looked at whether they should build the planter in Iowa in the heart of corn country. We convinced them they have a good factory here. It can only be more efficient if we just get bigger. I think in the end they decided we were probably right. It’s better to grow the plant where it is.”
Väderstad agreed, but didn’t feel comfortable investing that much more in the plant without owning more of it, which was a point that made sense with Seed Hawk’s Saskatchewan owners. But the Saskatchewan team couldn’t see pumping in the dollars that the corn expansion would require.
“That required more investment than we were ready for at our stage,” Beaujot says.
“When we launched the Tempo, which can work at higher speeds, we saw the possibilities in North America so we wanted to keep on investing here,” confirms Stark. “We had a discussion, and after a while we came to the conclusion that it was time for us to take over the rest (of Seed Hawk). We saw a lot of synergies between the companies, also with R&D and sales development.”
Those synergies were the reason Väderstad management first decided to partner with the Canadian firm.
“We were looking for big air seeders for the market in Australia, Russia and Kazakhstan,” says Stark. “Seed Hawk was mainly sold in Canada and we had a big market in other parts of the world, so it fit very well together and there were no competing products.”
That also made Seed Hawk drills part of a larger line of products here. From Beaujot’s point of view, expanding Seed Hawk’s offerings was important for maintaining the long-term viability of that brand.
“I could see corn and soybeans were moving north into our country, and that was going to reduce the air seeder market a little bit, and I had been concerned about that for a number of years,” Beaujot recalls. “There is an evolution of how people will farm in Saskatchewan.”
Currently, the global market for tillage and seeding equipment is a relatively crowded one, so technical innovation and a good product line are front-and-centre priorities for the survival of any brand, whether it has a regional or global focus.
“There are a lot of manufacturers,” says Stark. “You have to keep on with development and keep on being ahead of your competition.”
So with the official takeover announcement early in 2014, Seed Hawk became a Swedish-owned firm. But its products won’t simply be absorbed into Väderstad’s equipment line. Instead, its Canadian-built air drills will retain their familiar name, and the firm will continue to operate autonomously from its Saskatchewan home.
“We have made Väderstad and Seed Hawk what we call sister companies,” Stark explains. “It means there is no one at Väderstad in Sweden who will be the boss of Seed Hawk. Our long-term ambition is to keep on investing in Seed Hawk, where it is situated in Langbank.”
There will, of course, be a new CEO at the helm, yet Seed Hawk’s current principals, Beaujot and Brian Dean, vice-president of research and development, will remain with the company as senior executives for the foreseeable future. “We’ve signed on for five years,” says Beaujot. “We’ll see where things go after that. They wanted us to stay on during the transition.”
Transitioning a previously independent company into its fold is new territory for Väderstad management. Despite its global footprint, the firm has never taken over another brand.
“It’s the first ever,” Stark says with a smile. “We have 12 subsidiaries, but only for sales, and we have a small, small production facility in Russia. But this is the first time we buy another company.”
Retaining the existing executive staff in Saskatchewan seems likely to not only ease the integration, but also to help Swedish owners deal with the cultural differences that could be a stumbling block if not handled correctly.
“Of course, there are cultural differences between running a company in Canada and in Sweden,” Stark acknowledges. “You make sure you travel here frequently and some Seed Hawk staff travel to Sweden to get good co-operation between the companies, which is most important, getting people to work together.”
The acquisition gives Väderstad an even stronger foothold for growth in North America. It also means the Langbank, Sask. plant will see faster expansion in the near term. Beyond that, Stark isn’t ruling out further acquisitions as part of the brand’s global strategy.
“It could be part of it at least,” Stark says. “Maybe in the future there will be something more coming.”
But it is unlikely executives will want to wander outside their current manufacturing field by adding additional equipment types. Instead, expansion into previously untapped market regions is more likely.
“We think we should stay with seeding and tillage,” Stark says. But she does seem to have a never-say-never approach to business, and she pauses and smiles at the question of expansion plans.
“There are always possibilities,” Stark says. “You shouldn’t restrict yourself too much. We’ll see what the opportunities are.”
This article was originally published as “Swede Hawk” in Country Guide’s September 2014 issue