opinion
This editorial was posted on RealAgriculture by Gregory Heckman, CEO of Bunge.
Grassland farmers, stakeholders, and communities – the Bunge and Viterra teams have met with many of you in recent months, both directly and through industry associations. We listened to our customers’ concerns and answered their questions about what the complementary combination of Bunge and Viterra means for them. You want to learn about future integration organization efforts for Canadian farmers and workers. And we want to know how and why this agreement will be good for Canada.
I would like you to hear the answer directly from me.
The new company will employ Canadian workers and the transaction will not result in the closure of any Bunge or Viterra facilities in Canada. This commitment means we maintain a significant office presence in Regina and continue to employ thousands of Canadians in good-paying jobs across the country. In keeping with this commitment, the company announced that Kyle Jeworski, currently CEO of Viterra North America, will lead the combined company’s Canadian operations and remain in Regina. Kyle has deep ties to Canadian farmers, a proven track record of leading high-performing teams, and a history of working closely with Canadian producers and communities.
Simply put, this combination represents a major, multi-billion dollar investment in the future of Saskatchewan and Canada and their rightful place in the global agricultural industry.
we disagree Based on the findings of the March 27 report The award is from three scholars at the University of Saskatchewan. They acknowledge that their research is based on assumptions and incomplete data, and they refuse to share those data. Utilizing this flawed basis, the report makes a number of unsubstantiated and false economic claims about the expected adverse effects of the proposed transaction.
For example, the authors state: “This model is used to simulate the merger of Bunge and Vitera, assuming that the combined company (BV) operates his G3 (Bunge) and Vitera’s grain export elevator capabilities as a single company. The latter requires some behavioral assumptions.”
This “minor behavioral assumption” is the basis of the report’s conclusions and is objectively false. It would breach G3’s fiduciary duties to its shareholders and potentially violate Canadian competition law. That makes no sense at all and is clearly wrong.
The truth is, G3 and Viterra are currently competitors, and after the merger, G3 will be a strong competitor to the Bunge-Viterra combination.
The Bunge-Viterra merger will compete with dozens of grain handling companies that operate hundreds of elevators and numerous terminals in Western and Eastern Canada. We will continue to buy the same crops we do today, help Canadian farmers export more of their produce to more places around the world, and keep Canada at the forefront of a competitive agriculture industry. Success will increasingly be defined by global reach. Providing Canadian producers with greater certainty and economic security by increasing resilience to supply chain disruptions.
We work closely with Canadian government authorities.is reviewing this transaction as part of its regular and rigorous review process to address concerns and highlight the benefits that Saskatchewan and Canada will derive from the combined company.
As for the University of Saskatchewan academics’ report, this ignores both history and market realities, which are currently seeing an unprecedented increase in demand for canola. They appear to lack confidence in the competitiveness and dynamism of Western Canada’s farm producers and grain handling and processing sectors.
History speaks for itself. Viterra was founded in 2007, and the following year Saskatchewan’s GDP increased by nearly $3.2 billion, and agricultural GDP increased by more than $1.3 billion. In 2012, Glencore acquired Viterra, and the following year Saskatchewan’s GDP increased by more than $4.4 billion, and its agricultural GDP increased by nearly $2.2 billion. Since 2007, Saskatchewan’s crop income has increased by more than 228 per cent. You can debate trends in globalized agricultural markets, but it’s clear that Saskatchewan and Canada are positioned to thrive.
The combination of Bunge and Viterra will only accelerate this growth. I can’t wait to get started.
Related: Bunge-Viterra agreement is expected to require approval from more than 25 countries
