Winnipeg Free Press

Winnipeg Free Press (Newspaper) - June 21, 2012, Winnipeg, Manitoba C M Y K PAGE B4 .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. BUSINESS EDITOR: STEVE PONA 697- 7264 business@ freepress. mb. ca I MARKET DETAILS B6,7 I winnipegfreepress. com THURSDAY, JUNE 21, 2012 B 4 L EGUMEX 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, producing 1,100 metric tonnes a day. 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 Warren, 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 MARTIN CASH Crop processor's future growing WASHINGTON - The U. S. Federal Reserve acted Wednesday to lift an economy held back by a weakened job market, extending a program designed to spur borrowing and spending through lower long- term U. S. interest rates. The Fed also reiterated its plan to keep short- term rates at record lows until at least late 2014 and is prepared to act further if necessary. The Fed lowered its outlook for U. S. growth, predicting the economy will grow 2.4 per cent at most this year, compared with an April forecast of 2.9 per cent. It forecasts the current unemployment rate of 8.2 per cent won't fall much further in 2012. After a two- day meeting, the Fed said it will continue a program called Operation Twist through year's end. Since September, it has been selling $ 400 billion in short- term Treasurys and buying longer- term Treasurys. It will extend the program through December using $ 267 billion in securities. " This move is largely symbolic," said David Jones, chief economist at DMJ Advisors, projecting the extension of Operation Twist to have only a slight effect on long- term rates. At his quarterly news conference Wednesday, Chairman Ben Bernanke said the Fed is open to another bond buying program if the job market doesn't improve. The Fed has completed two such programs, buying over $ 2 trillion in Treasury bonds and mortgage- backed securities and expanding its portfolio to over $ 2.8 trillion. Investorsseemedunimpressed. Stocks and Treasury bonds were largely unchanged for most of the day, and yields on Treasury bonds were unchanged. During Bernanke's news conference, stocks began falling. Late- afternoon trading saw the Dow Jones industrial average down about 86 points. John Canally, investment strategist at LPL Financial, says the Fed delivered what investors expected and offered a hint at further easing. " If there's another misstep somewhere in Europe, the Fed's going to do more," he said. Canally also suggested that the Fed may be reluctant to be aggressive in an election year. Justin Wolfers, an economics professor at the University of Pennsylvania's Wharton Business School, suggested on Twitter that the Fed might be on the cusp of going further. He characterized their view as: " One more bad jobs report and we'll do more." Job growth averaged only 73,000 in April and May, after average gains of 226,000 per month in the first three months of the year. The number of people seeking unemployment benefits has risen about 5 per cent in the past six weeks, and employers posted sharply fewer job openings in April compared to the previous month. Critics have complained about the Fed's efforts to boost growth over the past three years by purchasing more than $ 2 trillion in bonds. They say the extra money added to the banking system could ignite inflation once the economy rebounds. - The Associated Press Fed moves to lift economy; ' Twist' continues By Martin Crutsinger SUBMITTED PHOTO Construction is on schedule for Pacific Coast Canola, Legumex Walker Inc.' s $ 110- million canola- crushing plant in Washington state. It will be the only plant of its kind west of the Rocky Mountains. B_ 04_ Jun- 21- 12_ FP_ 01. indd B4 6/ 20/ 12 9: 58: 20 PM ;