AS SOLLIO LETS go of its grain handling facilities in Southwestern Ontario, grain handler DG Global Inc. hopes the acquisition of the facilities will help meet demand for smaller, more customized grain markets.
Sollio — one of Canada’s largest agricultural co-operatives — announced plans in 2022 to sell its six grain handling facilities in the region to focus on its agricultural input business.
The facilities include the Shetland Road elevator at Florence, the Talbotville elevator at St. Thomas, the Becher elevator at Wallaceburg, the former Palmerston Grain elevator at Palmerston, and the elevators at Princeton and Staples. The company maintained operations at the facilities during the 2022 harvest season, albeit at reduced capacity. It also stated it intended to honour all existing contracts and fulfill all business obligations.
An agreement of sale of the six elevators was announced on March 24, 2023, between Sollio’s Ontario Grain LP., DG Global, and Belmore-area elevator operator Rolling Acres Grain Ltd. Talks to finalize the the sale followed, with the formal agreement to purchase signed in June 2023. The Palmerston elevator was acquired by Rolling Acres, with DG Global taking over operations of the other five locations.
Dwight Gerling, Chief Executive Officer and Owner of DG Global stated in a press release from June 2023 that he would “like to personally reassure existing customers that all five elevators will continue to operate as they normally do as we transition this business behind the scenes.” Most of the existing staff, he says, chose to continue working at each location, adding he expects no interruptions in elevator operations during the ownership transition.
HOPES OF INCREASED EXPORT OPPORTUNITIES
Dana Dickerson and Hayley Micallef — Grain Farmers of Ontario’s market development and sustainability manager and market development coordinator, respectively — say the organization is pleased the new elevator owners will continue supporting Grain Farmers of Ontario’s crop assessment efforts.
“For us, these elevators were ones that supported insights into wheat quality. They were sites that offered a good representation of regional production,” says Micallef. However, both Micallef and Dickerson add the bigger story will be DG Global’s capacity in the “specialized container business.”
“There could be potential for looking at containerized businesses for crops outside [Identity Preserved] soybeans,” Dickerson says. “Given DG Global trade containers into such a range of global markets, it could provide new options for other crops.”
Gerling reiterated, in an August 2023 interview, that finding and developing new markets in a variety of crops is indeed what DG Global is aiming to do. While many companies focus on bulk shipments of tens of thousands of tons of grain with homogeneous characteristics, his company’s focus on container-level shipping provides significant flexibility.
“Buying these [elevator] facilities gives us one more toolkit. We understand our customers overseas, but everyone has a different use or need or how they want it packaged. We have the ability to control and put that in a container and expand markets and volumes to different countries,” says Gerling, citing wheat with specific protein or moisture levels as examples.
“We’re doing smaller lots. We might do 50,000 tons, but it might be over six months and allows us to segregate different stuff.”
KEY AREAS OF INTEREST
Southeast Asia has long been a major destination for Canadian grain, particularly food-grade soybeans. Gerling says the region is increasingly an opportunity for products featuring more specific characteristics. Africa offers another option, as does Europe, where bulk product has dominated.
“It’s not new customer areas per se, but there may be customers who didn’t buy bulk as it didn’t meet the specifications they wanted,” he says.
“In Africa, the population is strong and growing. Same with Southeast Asia. Between those two areas, there’s very strong population growth. Especially in Asia, the populations are getting more affluent and want better quality food that maybe bulk doesn’t quite fit as well.”
Purchasing the sixth Sollio elevator in Palmerston, Ontario, is Rolling Acres Grain Ltd., a Belmore, Ontario-based company.
Rolling Acres 1892 Ltd. offers custom agricultural services in addition to its grain handling facilities. The addition of a second facility in Palmerston gives the company the opportunity to expand its services and support farmers in the area.
“The Palmerston grain elevator will be a tremendous addition to our operations in the region, where we have been servicing and helping farmers succeed since 2008,” said Evan Renwick, vice president, Rolling Acres Grain., in a March 2023 news release. “As we grow to meet local demands, we look forward to building new relationships in Palmerston and the surrounding area.”
The Palmerston elevator was originally owned by the McLaughlin Family and was sold to Southwest Ag Partners in 2014. Sollio subsequently acquired the facility in 2018, operating until its sale to Rolling Acres Grain Ltd. in 2023. •