By Lynda Kiernan
La Coop fédérée, the largest agri-food body in Quebec and the only nationwide agricultural cooperative in Canada, announced it has secured an investment of C$300 million (US$227 million) from Caisse de dépôt et placement du Québec (“CDPQ”), the Fonds de solidarité FTQ, Fondaction, and Desjardins Capital.
Founded in 1922, La Coop fédérée is not only the one nationwide agri-food co-op in Canada, but the 24th largest in the world, representing 120,000 members, agricultural producers, and consumers in nearly 60 co-ops in multiple Canadian provinces. Including its affiliated cooperatives, it has more than 19,000 employees, combined sales of C$9.5 billion (US$7.2 billion), and provides tax revenues of C$1 billion (US$760 million) on an annual basis.
Its business is divided across three divisions: Olymel SEC (under the Olymel, Flamingo, Lafleur, Aliments Triomphe and Pinty’s banners), Sollio Agriculture (under the La Coop, Elite, Agrocentre, Agrico, Agromart, and Country Stores banners) and Groupe BMR inc. (under the BMR, Unimat, Agrizone, Potvin & Bouchard, The Shop, and Country Stores banners).
“Desjardins Capital has been a financial partner of La Coop fédérée for almost 15 years and is proud to have been one of their first equity partners. This brings our total investment up to $100 million in preferred shares. This partnership supports vibrant rural communities in Quebec and across Canada,” says Luc Menard, COO, Desjardins Capital.
Caisse de dépôt et placement du Québec (CDPQ) launched Fonds agroalimentaire CDPQ – a $125 million fund targeting investments in Québec’s agri-food industry in 2017.
The fund is part of la Caisse’s strategic plan for the agribusiness sector in Québec, and is targeting investments between C$1 million (US$760,000) and C$30 million (US$22.7 million) across three main segments of the food chain: agricultural production, food processing, and food distribution and marketing, including farmers and SMEs that are looking for growth.
“The sustainable agri-food industry is essential to Québec, its population and the development of its regions, and Fondaction has made it one of the major themes of its investment strategy,” said Stephan Morency, chief investment officer at Fondaction. “Our renewed support for La Coop fédérée is in line with this objective.”
The agri-food chain in Québec produces a diverse range of high-quality foods, with prominence in the production of maple syrup, pork, milk and dairy products, veal, grain, fruits, and vegetables. Additionally, the province is home to 2,200 food processing businesses including international players Agropur, Saputo, and Olymel among others, of which, 90 percent are SMEs. As of 2016, the province accounts for one-third of the pigs in Canada, and ranks third nationwide in acres under soybean cultivation, second for corn, and first in the country for blueberry, cranberry, and overall fruit and nut acreage, according to Statistics Canada.
Québec is also home to Exceldor, one of Canada’s biggest food cooperatives, which in June 2014 acquired Ontario-based P&H Foods, the producer of Butterball turkeys in Canada, from its parent company Parrish & Heimbekcer Ltd.
Amid such a rich backdrop, La Coop fédérée is a leader in the regional agri-food economy, with the direct, indirect, and induced spinoff from La Coop fédérée contributing nearly C$4 billion (US$3 billion) to the country’s GDP.
“By supporting one of the largest Québec cooperatives, we are also contributing to the social economy, as it is well equipped to respond to the sustainable development issues across Québec,” said Morency.
The investment will take the form of preferred shares, and the capital invested will be paid into the share capital of La Coop fédérée, which will use the funds to finance acquisitions and investment projects for itself and its divisions aligned with the cooperative’s 2019-2022 strategic goals.
“The agri-food industry, at the very heart of people’s day-to-day life, is an important driver for Québec’s economy,” said Marc Cormier, executive vice-president and head of fixed income, CDPQ. “This investment will allow La Coop fédérée, one of the world’s largest agri-food cooperatives, to pursue its growth strategy while generating stable revenues for our depositors over the long term.”
– Lynda Kiernan is Editor with GAI Media and daily contributor to the GAI News and Agtech Intel platforms. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.