The US$4 million deal was finalized in February and is the culmination of a relationship dating back to 2019 when Ceres first provided LAC storage and handling services from its Port Colborne.
LAC for the past 4 years used the grain elevator for storing and handling corn, soybeans, wheat, and other products.
The agricultural commodity trader, LAC, operates 18 grain elevators, and this recent acquisition will allow them to ramp up their trading operations.
“Supporting the farming sector in Ontario has always been a priority for LAC,” said Richard Smibert, president of LAC.
“This strategic move to take ownership of a facility we have previously leased… exercises our ability to plan for more internationally bound cargo shipments efficiently.”
All former Ceres employees at the Port Colborne terminal will transition to LAC, which will further strengthen the partnership Ceres enjoys with LAC.
“The sale of the Port Colborne facility further enhances Ceres’ strategic partnership with London Agricultural Commodities and aligns with our long-term strategy of optimizing our footprint around our core products and the locations where we operate,” said Carlos Paz, CEO of Ceres.
Ceres, with its affiliated companies, operates 11 locations across Saskatchewan, Manitoba, and Minnesota, with an aggregate grain and oilseed storage capacity of approximately 29 million bushels (0.789 million tonnes).
The sale of the Ontario-based facility will reduce the overall storage capacity of Ceres but will allow the company to invest in other areas aligned with its business.
Ceres said it plans to use the proceeds from the sale to execute its broader strategy to increase core product farmer-direct origination from key growing regions and optimize capital structure by paying down term debt.
Ceres’ staggering debt has been in the limelight in the recent past and focusing part of the proceeds from the US$4 million facility sale will go a long way to reduce its debt problem.