For what it's worth......
WINNIPEG — The Canadian Grain Commission has revoked six licenses for Global Food and Ingredients, a plant-based and plant protein company with facilities in Saskatchewan.
The CGC pulled the licenses as of May 16.
“We’ve revoked Global Food’s one grain dealer license and three primary elevator licenses for their facilities in Lajord, Sedley and Zealandia, Sask., as well as two process elevator licenses in Bowden, Alta., as well as Zealandia, Sask.,” said CGC spokesperson Remi Gosselin.
The commission decision came after Global Food and Ingredients (GFI), with headquarters in Toronto, announced May 7 a “wind down” of its business operations. GFI said it cannot service its debt.
“(This) is a result of recent macro-economic events, which have caused GFI to experience challenges in purchasing adequate supplies of raw material inputs for its processing assets, which has resulted, and is expected to continue to, result in a material decline in the company’s sales and gross profit until new raw material supply becomes available from the fall 2024 Canadian harvest,” GFI said.
“Management and the board of directors have determined that these challenges will make it near impossible for (GFI) to continue to operate and service its debts, leaving no other option than to wind down its operations.”
The company purchased peas, lentils chickpeas and other high protein crops from farmers. In a financial statement released in February, GFI says it has four lines of business — Core Ingredients, Value-Added Ingredients, Plant-Based Pet Food Ingredients and Downstream Products — and ships to 37 countries around the world.
While operating, GFI manufactured pea and lentil flours, pea protein, pasta made from lentils and its own brand of pulse-rich pet food.
It had a pea processing plant in Zealandia and a pet food processing plant in Bowden.
From April 1 to Dec. 31, 2023, GFI had revenues of $76.1 million, a decline of 18 per cent from the same period in 2022.
A May 8 company news release said GFI has received letters from its secured lenders demanding immediate and full payment of the “outstanding debt balances of $14,987,992 and $6,844,973.”
The main creditors have applied to have GFI placed into receivership. On May 23 a hearing will be held to “discuss the application for receivership,” Gosselin said.
In addition to revoking its license, the grain commission has prohibited GFI from purchasing grain from farmers and trading in grain.
“In terms of security, the CGC holds a $2 million Intact insurance company payables insurance policy, which would be used to compensate producers who have delivered grain to (GFI) and who have not been paid and make eligible claims for payment to the Canadian Grain Commission.”
Grain commission staff will be visiting GFI locations in Saskatchewan to determine the outstanding liabilities to farmers.
“Our payment protection program provides … protection to producers who are eligible, by obtaining security from licensees,” Gosselin said.
“But we can’t guarantee that producers will be paid in full, if the licensee (GFI in this case) defaults on its payment obligations.”
So, if the money owed to farmers exceeds $2 million, some producers may be reimbursed less than 100 per cent.
“If the outstanding liabilities are $2.2 million, then we would pay producers back on a pro-rated basis,” Gosselin said.
“What we do know … is we have $2 million in security. We need to conduct a final audit to determine what is owed to producers.”
Farmers who haven’t received payment from GFI should contact the grain commission immediately, he added.
“A claims process will begin as soon as possible.”
Contact
robert.arnason@producer.com
