At the height of the recession in 2009, Mike Wilson, Agrium Inc.'s chief executive officer, vowed to double the size of the company's retail business over the following five years. The announcement was viewed as necessary at a time when crop and nutrient prices were extremely suppressed .
Fast forward two years and Mr. Wilson is sticking to his word, even though agricultural fundamentals have roared back. Last week Agrium announced plans to scoop up Nebraska-based International Mineral Technologies for an undisclosed amount.
The deal wasn't significant in financial terms, with annual revenues of only $60-million, but TD Securities analyst Paul D'Amico is "encouraged by the continued strengthening of [Agrium's]diversified business model."
At the moment, Agrium has three business lines. The first is a wholesale unit that produces, markets and distributes nitrogen, phosphate and potash for agricultural and industrial uses. The second is the retail unit that distributes seed, agricultural crop protection products and crop nutrients. The third is an advanced technologies unit that tries to develop and market special fertilizer technologies.
Although Agrium has operated in the U.S. retail business for almost two decades, the company paved its way into the Canadian retail market in 2010 by purchasing 33 retail outlets in Alberta and Southern Saskatchewan. More recently, it bought retail farm centres in Argentina that offer a range of herbicides, insecticides, and fungicides .
The latest South American purchase compliments those operations. International Mineral Technologies specializes in the production, marketing and distribution of what is known as "liquid plant nutrition" and dry micro nutrient products such as zinc sulphate.