91st Annual General Meeting - La Coop fédérée reaches new heights

Feb 28, 2013, 11:33 ET from LA COOP FEDEREE

MONTREAL, Feb. 28, 2013 /CNW Telbec/ - Meeting in Montreal for their 91st annual general meeting, members of La Coop fédérée have once again proven the strength and vitality of the cooperative model in announcing record results.

Despite market volatility and the fragile state of the economic recovery, La Coop fédérée ended the fiscal year on October 27, 2012 with a surplus, before patronage refunds and income taxes, of $96.6 million and sales of $4.9 billion, two new records for the enterprise. These results reflect increases of 4% in the surplus and 10% for sales compared to the previous year.

"We could not have hoped for better results to celebrate our 90 years of existence and the International Year of the Cooperative as declared by the United Nations for 2012," said Denis Richard, president of La Coop fédérée.

Other outstanding achievements this year, aside from the record financial results, are that La Coop fédérée has announced an investment of $1.2 billion to construct a new urea production plant in Bécancour; it has made a first foray into the little developed industry of agricultural biomass; it has pursued pan-Canadian development with the acquisition of one of the most important pork producers in Canada, a transaction that was completed after the books were closed in 2012; it has reinforced its financial stability thanks to the issuance of $100 million in preferred shares; and it has pursued the deployment of the Chrysalide project after improving efficiency.

"These results confirm once again that cooperatives, which generally fare better against financial crises compared to other businesses, are able to successfully combine respect for individuals, social progress, sustainable development, efficiency and financial success," mentioned Claude Lafleur, Chief executive officer of La Coop fédérée.

(Fiscal year ending October 27, 2012 and October 29, 2011)
(In millions, unless otherwise noted) 2012 2011 Variation
Surplus before patronage refunds and income taxes on the surplus 96.6 92.7 4%
Sales (products or sales) 4,867.1 4,442.4 10%
Patronage refunds 32.2 36.5 (12%)
Assets 1,517.1 1,393.3 9%
Equity and preferred shares 590.4 457.1 29%

All sectors contributed to the year's excellent results, whether it be crop and livestock production, or the commercialization of grains (under the Elite and La Coop brands), machinery and agricultural equipment (under the Unimat brand), energy (under the Sonic brand) or meat processing (under the Olymel brand).

With regard to all who contributed to the surplus, the results benefitted particularly from the contribution of the Agronomy Company of Canada Ltd, a company acquired in 2008, as well as Agrico Canada Limited, an important fertilizer distributer acquired in September 2011. The machinery and energy sectors have done equally well, as did the poultry division of Olymel, thanks to the margin improvement on inputs. Only the Olymel pork sector saw its surplus fluctuate in 2012, after 2011's exceptional year, as a result of a decrease in Quebec and western Canadian pork production.

On the sales side, the 10% increase comes from an increase in the volume of sales from different sectors as well as from the firming up of sale prices for numerous products (notably grains, poultry and petroleum products). Specifically, the increase of Olymel poultry sales, which benefitted from progression in market prices, as well as the intake from the first full year of activity at Agrico Canada Limited and Grower Direct Exports, a grain commercialization business acquired in July 2011.

Patronage refunds and accrued financial stability
The year's good performance allowed La Coop fédérée to pay patronage refunds for a sixth consecutive year and to strengthen its financial position.

The patronage refunds to affiliated members reached $32.2 million in 2012, the second highest record for the organization, compared to $36.5 million in 2011, and the assets of the enterprise, including preferred shares, rose to $590.4 million on October 27, 2012, which represents an increase of 29% compared to the end of the previous fiscal year. This increase is explained primarily by the successful implementation of two new series of preferred shares, totalling $80 million.

"We are happy to share our success with our members," said Denis Richard. "Also, last year we've paid, for the first time in our history, a patronage refund to pork producer members in the Pork Network cooperative."

Several investment groups also showed their confidence in La Coop fédérée in 2012. Le Fonds de solidarité FTQ and Capital régional  et coopératif  Desjardins invested $100 million in the social capital of La Coop fédérée, as well Farm Credit Canada consolidated an existing credit facility and processed an additional loan of $33.6 million for La Coop fédérée. "The fact that partners of such a quality have an outstanding comprehension of the issues that concern us, and financially support us, bodes well for our future," Mr. Lafleur said with pleasure.

Main achievements
2012 was full of events. Other than the financial results which reached a historic high and the measures taken to strengthen the capitalization of the enterprise, 2012 was marked by a number of achievements:

  • The first foray into the renewable energy sector, with the signing, in June 2012, of a partnership with the most advanced biomass material company in Canada, Prairie Bio-Energy Inc., located in Manitoba. Notably, this partnership allows La Coop fédérée to become a Canadian leader in the development of agricultural biomass.
  • The announcement in October 2012 of an investment of $1.2 billion in partnership with the Indian Farmers Fertiliser Cooperative (IFFCO) and in collaboration with Investissement Québec, for the establishment of a urea production plant in Bécancour.
  • The acquisition of the assets of Big Sky Farms Inc., the most important pork producer in Saskatchewan, and the second largest in Canada. This acquisition, worth $65.3 million, was completed by Olymel. The confirmation of the purchase offer was received on December 24, 2012 and was approved by provincial authorities in Saskatchewan on January 20, 2013. The figures related to this acquisition were not included in the 2012 results, as the transaction was completed after the close of the fiscal year.
  • Continued deployment of major Chrysalide projects within the different entities of La Coop fédérée and affiliated networks. These projects will help the cooperatives which hope to share certain tasks, all the while preserving their independence and local base, to improve their efficiency with synergy research and pursuing under-utilized assets.
  • Participation, as a major partner, in the International Summit of Cooperatives. More than 2,800 people from 91 countries participated in the event, which was held in Quebec in October 2012. This summit took place during the International Year of the Cooperative as declared by the United Nations for 2012.

Significant involvement in the community
La Coop fédérée, including Olymel, spent throughout the year a total of $1.3 million to encourage, through donations and sponsorships, organizations and events that the enterprise found worthy. The development of agriculture as a career, sport and health, culture as well as helping those less fortunate were the principal causes funded by La Coop fédérée. Olymel donated funds primarily towards the fight against poverty and social dislocation.

In addition to the amounts donated and sponsored, La Coop fédérée spent about half of the $760,000 dispersed throughout the fiscal year to young winners of the Fonds coopératif d'aide à la relève agricole. Fifty-two new young farmers met the required conditions in this fiscal year, which brings the total number of young winners in 2012 to 195. La Coop fédérée is concerned with the training and establishment needs to support solid farm transfers that can, in time, help with the succession of farms within the affiliated networks of La Coop.

Developing the Canadian market
Discretely, yet efficiently, La Coop fédérée continued its development outside of Québec as part of its triennial strategic plan. Over the last five years, La Coop fédérée has acquired numerous businesses outside of Québec, the most recent being Agrico Canada Limited, Big Sky Farms as well as a grain commercialization company for south-western Ontario (Grower Direct Exports), and signed several partnership agreements to develop the organization so that a urea production plant in Bécancour and agricultural biomass development could occur.

"The limited size of the Québec market forced us to strategically invest and constantly research opportunities to better use our facilities in Québec, to show the huge potential of our people and to further push the competitive advantages of our skills," explained Lafleur, "The exceptional results that we see today give us the stability and the confidence to seek to understand and reach out with our model across Canada as well as around the world."

About La Coop fédérée
Founded in 1922, La Coop fédérée is the largest agri-food enterprise in Quebec and ranks amongst the 100 largest co-operatives and mutual societies in the world, across all sectors. It is owned by over 100,000 members grouped into 102 cooperatives located in several Canadian provinces. La Coop fédérée is present throughout the agri-food chain and, as well as being a wholesaler, it also provides agricultural producers with all the goods and services they require for their farming operations. The network has five brands: Elite and La Coop (animal and crop production, grain marketing), Unimat (hardware and farm machinery), Sonic (energy) and Olymel (meat processing). La Coop fédérée employs over 9,500 people with sales totaling over $5 billion. Including its affiliated network, La Coop fédérée employs almost 15,500 people with sales of $7,8 billion. www.lacoop.coop and twitter.com/LaCoop_federee.