Westlock Terminals
Situated in Westlock, Alberta north of Edmonton, Westlock Terminals is the province’s first NGC grain company. Westlock Terminals is a jointly owned commercial operation with the ownership structure comprised of more than 270 shareholders, including local farmers and community businesspeople. The mission of the co-operative is to pursue sustainable growth and exceptional customer service, and lead by example as Alberta’s forefront co-operative within the grain agri-services industry.
Westlock Terminals’ success largely comes through the determination of its investors, who believe in the co-operative method and a strong presence within the grain sector. As a result, Westlock Terminals continues to enhance customer experience, expand its business operations, and its abilities to market grain had been recognized by feed mills, feed lots, and ethanol plants across Western Canada.
The Canadian Business Journal spoke with Clifford Bell, CEO of Westlock Terminals, about the latest business developments, new services that provide value to its customers and investors, as well as issues currently faced by the Canadian grain industry.
“What makes Westlock Terminals unique is its grassroots governance in management and all those involved in the operation — whether it be directors, employees, farmers, or local businesspeople, everyone has skin in the game. We have a lot of motivated and knowledgeable farmers and staff that have demonstrated that can-do attitude that has carried the co-operative through to this day,” says Bell.
In the past several years Westlock Terminals has focused on its core business and on developing new ways of adding value to its customers and shareholders. Today the company also offers commercial trucking, grain cleaning and additional storage capacity. The fundamental synergies are at the core of all of these additional services, simply tying with Westlock Terminals’ core operation.
“We have seen slow but steady growth of our business in the past few years, and we have ventured into several new services that provide service and value. One of the big things is that we introduced commercial trucking. We are bringing grain from the farm to the elevator, which has expanded our operations by a fair amount. So now we also offer on-farm pick up as a service to the farmers who trade grain with us, so we now also control a percentage of our inbound grain volume. For us it’s all about providing value and convenience to the shareholders and producers. We are simply providing additional service to farmers as they continue to trade larger and larger blocks of grain,” explains Bell.
The terminal also finalized a $2 million expansion of its facilities, upgrading its existing bins, and adding a canola cleaning line. “This has really enhanced our operations,” continues Bell. “We have been providing wheat cleaning but more and more farmers are growing canola, and we are now able to secure additional revenue from the grain cleaning service. All grain gets cleaned, but traditionally it gets cleaned at the coast — we shipped it to the coast, the grain got cleaned, and loaded onto the boats. With the ability to clean the grain locally, we save of freight, we save on volume – we get more volume into the cars – and it gives us additional source of revenue. We have done it on the wheat side and now we clean canola as well.”
The company operates with the mindset of adding the most value to the grain before it leaves the facility. That’s why the company always seeks additional opportunities to do as much as possible when it comes to grain management and processing according to Bell. “If we can extract more dollars and more margin out of that ton of grain before it leaves our control, that’s what we will do — whether we crush it, clean it, put on a freight incentive, whether we add value with trucking, storage or blending, it just gives us another option to bring revenue and therefore be more competitive.”
Freight trains being the core means of grain transport from Westlock, and Bell also notes a serious issue facing the company and the whole of Canadian grain industry — a lack of rail cars to move the grain to the coast. “The hopper cars have life expectancy, and they are coming of age,” explains Bell. “Every grain car has a date stamp on them and once they reach their 40th birthday they have to be scrapped, and most Canadian hopper cars will come of age within the next decade. So it’s imperative that the industry secures more rail cars, and the conversation within the industry is about who will purchase the cars, who will build them, and who will manage them, and it is being pushed down to the local operators to supply and maintain the cars. This is a serious issue for us and the whole grain industry in Canada.”
With this issue in the wings across Canada, the company is looking at shipping alternatives, and is starting to test shipping grain domestically and internationally using standard shipping containers. “This is not a traditional way of shipping grain, but with the issues of securing rail cars we are looking at this as a possible alternative. Just think of the volume of goods that come from the coast inland, and nothing to really go back, so there is abundance of empty containers making their way back to the coast. So that works in our favour, and we expect to be loading significant volumes of grain through Westlock in this manner.”
Funded through capital investment from an extensive shareholder group, Westlock Terminals represents a profitable venture that continues to lower costs of agricultural services to the Westlock community, and continuously develops new ways of adding value to customers and shareholders through innovative services that enhance Westlock Terminals’ core operation, and extract the most value out of every ton of grain than passes through.
