Crop processor's future growing

Legumex Walker Inc. isn't even a year old, but already CEO Joel Horn sounds like a parent who feels like time is flying by.

"It's hard to believe it's been a year since our IPO (initial public offering), especially when we look back to see how much we've accomplished," Horn said Wednesday in Toronto at the company's first annual meeting.

In less than a year, the diversified speciality crop processor and merchandiser set up a Winnipeg head office -- the first new public company head office in the city in the last five years -- and in July merged the Manitoba and Saskatchewan operations of the Roy Legumex and Walker Seed companies to form Legumex Walker Inc. (LWI) last July.

The company has four plants in Manitoba -- two in St. Jean, one in Morden and one in Plum Coulee -- and four in Saskatchewan.

"Former competitors are now colleagues," Horn said. "They have more resources to work with. It's one company from grower to consumer."

Its Tuxedo Business Park head office is cramped, with more than 20 people handling the company's finance and accounting, sales and human resource management. By all accounts, all of those functions will continue to grow. The company was built for growth rather than dividends -- which is how it was sold to investors.

LWI has made its presence known as a player in the market by acquiring Minnesota's St. Hilaire Seeds, one of the largest pinto and black bean processors in the United States, and some of the assets of Anderson Seeds in Mentor, Minn., for nearly $17 million total in February. It started a small bean processing operation in Tianjin, China earlier this year.

Projecting results over the last 12 months, this is a $230 million-a-year company. The plan is for sales to keep growing.

Horn said it's because of that stated growth play that he isn't concerned about the stock price, which took an 8.6-per-cent hit on Wednesday to close down to $6.03. Its IPO price last July was $9.

The company has diversified the sourcing of its commodities from 100 per cent Canadian prairie-based to 75 per cent. By the beginning of next year, its 85 per cent owned Washington state canola oilseed processing facility will be up and running. It will produce 1,100 metric tonnes a day at full capacity. Swiss-based grain trading giant Glencore Grain owns 15 per cent.

"The real value is in what we are building," Horn said in an interview. "We have been clear from the beginning that this is a long-term investment. If you ask me (about the stock price) in 2014 after the canola plant is fully up and running and operational and we've maybe purchased another couple of companies on the specialty crop side, you may get a different answer than today."

He said shareholders at the AGM were quite satisfied when they saw the progress the company has made.

The company is already one of the largest specialty crop processors in Canada, with lentils, whole and split peas, beans, chickpeas, canaryseed, flaxseed and sunflower seeds being sold in over 70 countries.

The diversification play is paying dividends. Before the Minnesota acquisitions, LWI's dominant commodity was lentils, whose price is off a little these days. St. Hilaire specializes in pinto beans, whose price is up after Mexican crop problems.

Demand for canola is on the rise in the U.S., and its Warden, Wash., plant will be the only commercial-scale canola crushing facility west of the Rocky Mountains.

If all goes according to plan, LWI will continue to reconfigure, which will hopefully continue to be a good thing for investors.

martin.cash@freepress.mb.ca

Republished from the Winnipeg Free Press print edition June 21, 2012 B4