Martin Harder spent 21 years working for a multinational grain company before realising he had what it takes to succeed on his own. In 1995, Harder founded Delmar Commodities, a company that started as a grain broker, but soon took advantage of opportunities to expand, mainly through acquiring grain elevators. Today, Delmar is a multimillion-dollar company serving western Canadian farmers with Canadian Wheat Board grains, non-board feed products and oilseeds. With four grain elevators and one soy bean crushing plant, all of Delmar Commodities’ facilities are located in southern Manitoba (Winkler, Jordan, Somerset and Gladstone).
“When I started Delmar Commodities, I was determined not to be a rinky dink company,” says Harder. “I wanted to develop something that had value to both myself and those people working with me. I wanted the company to be self-sustaining, even if I wasn’t involved. That was the goal. I was able to achieve that with some friends who were interested in joining forces. I promised to make a portion of the company available to them as far as an owner group.”
The team Harder is referring to includes his son, Darryl, who joined in 1996 as Office Manager; a friend and former employee, Dale Heide, VP Marketing; and George Wieler, Operations Manager, who Harder describes as a real people person. “With my visionary qualities and ability to distinguish a good opportunity, we had the four corners covered,” he smiles. “That was the ground work and those individuals are still with me today.”
Harder said his goal was to create something valuable. And he has succeeded in doing that following through with this mandate: Service with integrity. “It’s a huge task,” he says. “Values can be easily be refuted if you don’t fulfill them, so it’s something we pay close attention to. That focus on integrity is still a priority today; it is shown from the management and employee perspective, and every deal we make is supposed to meet that criterion.”
Separating the wheat from the chaff
While Delmar trades the same commodities as big grain companies do—barley, oats, canola, flax, corn, wheat, rye and soy beans—it has managed to set itself apart in innovative ways. “Where we have developed an advantage is in going after niche markets,” explains Harder. “We’re focusing on distributing to smaller mills the big grain companies are ignoring.”
Interestingly, the businesses Delmar Commodities is catering to now wasn’t always on its radar. In fact, its new distribution method was born out of necessity, when the company faced rail line abandonment. Harder explains: “We had three facilities on a short rail line for a number of years, and we relied on it for distribution. But CN Rail shut down the line and ripped it up, because the price of steel was too good. We didn’t know what to do. We could lie down and get run over, or look at it as an opportunity.”
Delmar developed a system that was truck related, looking for companies where it could send products directly. “Some mills aren’t suited to take big unit trains, so we started shipping grains right to those end users,” he says. Shipping by truck proved to be a great solution, especially when compared to the method of loading product in a rail car, shipping it to a central point and distributing it from there.
Trucking also created another niche opportunity to leverage the back hauls from the trips going south. “Before, we would ship 25 railcar units of oats by rail to the United States,” Harder continues. “But now we have a system where we ship oats down there by truck, then load up the truck with corn and bring it back to other end users. This process costs us less money than rail, and it takes less time.”
Location, location, location
Around the same time the rail line was removed, Delmar had built the soy bean crushing plant. This also turned out to be a wise business decision, as the plant’s location is right in the middle of a high-consumer area for feed (due to hog and poultry industries in Manitoba), as well as an area that is well-suited to grow soy beans.
“It used to be that any soy beans grown in southern Manitoba would get exported to the United States, and any soy bean meal brought into the province was brought in from the United States,” says Harder. “Our plant takes the best advantage of that growing area, finishing with a 100-mile product. We don’t purchase any soy beans outside our 100-mile radius, and we also sell very little soy bean meal outside that radius. We created our own local market by doing that.”
At a time when Delmar could have gone under, Harder demonstrated his knack for seizing opportunities to not only keep the company afloat, but thriving as well.
As Delmar Commodities looks ahead, the team has several plans to continue expanding. One of the first items the company is working through is the completion of its recent Jordan Mills purchase. As of January 1, 2010, Delmar owns all of the remaining mill shares, and now the company must integrate and streamline all processes to make sure everything is flowing smoothly and efficiently.
Beyond that, Delmar is looking to handle new products. “At one of our facilities, we’re implementing a complete cleaning program that cleans to export standards, so we can get into markets like food-grade flax or wheat that is ready for the flour mill,” says Harder. “We’re starting on that side of things, which will open up the business significantly. We’re looking at developing that aspect further over the next number of years.”