New Generation Co-op allows variety of shareholders to invest
By Jennifer Neutel
Westlock Terminals hauls 200,000 tonnes of grain a year, a five and a half fold increase over a decade of operation.
“It has a huge, huge financial impact on the community,” says Dave Felstad, founding board chair and current ambassador.
The terminal has bought between $50-70 million worth of grain annually during the past few years. The accompanying cheques that go out to the producer are often injected back into the community, notes Dave.
Ten years ago, Dave learned that the grain elevator in the town of Westlock, Alta., was for sale through a newspaper article, though at the time he was the parent company’s delegate.
There are more than 1,000 farms in Westlock County and more than twice that in the surrounding counties, making Westlock the heart of a productive grain growing region.
“We knew we had a good thing going here,” Dave says of the fertile grain land.
Feeling betrayed about how the company was selling the grain terminal, on a personal level and on behalf of the community, Dave formed a committee to discuss how to keep the facility operating.
“I felt like I owed the community something after a disaster like that happening,” he says.
The committee spent more than three months touring people from every grain company in Western Canada through the facility, but no one wanted to buy it.
The committee decided to go to Plan B — to buy and run the facility themselves.
The group expanded to nine people, and after a month considering what business structure to use a lawyer convinced them to start a New Generation Co-operative.
Geared towards agriculture businesses, New Generation Co-operatives allow the co-op to issue investment shares to the community who are not members of the co-op.
Dave says the model was a novel idea for the province at the time, and Westlock Terminals became the first New Generation Co-operative in Alberta.
Because of a considerable time constraint to have the business operation running in time for the November/December harvest, they opened the initial share offering — with five share classes available — to the community for six weeks.
Dave says this timeline was a good move because it “put a fire under ourselves” to get busy and sell. On the last day of the offering, $300,000 of the $1.2-million raised came through.
If they hadn’t purchased the facilities, Dave says the result of people hauling grain elsewhere “would have been disastrous for the community.”
The terminal receives grain deliveries from all over the region, from more than 160 kilometres away.
With about 300 shareholders, Westlock Terminals has held three limited-time share offerings since the initial call. There’s a waiting list of people wanting to purchase shares.
Westlock Terminals is an example of a community successfully unleashing its local capital to keep a keystone economic asset in the community. A new project co-ordinated by the Alberta Community and Co-operative Association called Unleashing Local Capital is empowering Alberta communities to learn about investing locally through a Community Investment Fund (CIF). Learn more at http://acca.coop/unleashing.
Watch for upcoming news stories on the Westlock Terminals and the CIF model.
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