December 14, 2001
Crown Investments Corporation of Saskatchewan (CIC) has outlined a detailed strategy for restructuring the province's investment in the potato business. The strategy includes maintaining infrastructure, but having an orderly withdrawal from the business of growing seed potatoes.
"We believe this is the most sensible way to manage the assets and the investment we have put into the potato business over the years," CIC Minister Maynard Sonntag said. "We have consulted with the industry and individual growers, and this is the direction they want us to take."
CIC took over management of the province's potato assets in mid-2000 after Sask Water's SPUDCO unit was transferred to CIC. The business has been operating as a wholly owned subsidiary of CIC called Saskatchewan Valley Potato Corporation (SVPC).
"Our goal has always been to turn over ownership to the private sector, and our new strategy will see to that," Sonntag said. "We will maintain potato storage facilities and continue to provide market development services to growers during this transition phase. However, we will be right out of potato production within two years, and we will sell storage assets whenever we receive reasonable offers."
SVPC has agreements to sell two of its storage facilities. Pending final approvals, one of the Broderick potato storage facilities will be sold to Barrich Farms for $1.6 million and Pak-Wel Produce is expected to purchase the Lucky Lake facilities for $2.75 million. Negotiations are continuing with potential buyers for the other storage bins.
"We will recover a substantial amount of our investment from the timely and orderly sale of these assets," Sonntag said. "Proceeds from prudent sales will help improve SVPC's financial picture. In the next couple of years, our plan calls for SVPC to decrease its debt by $5.1 million and have a positive net income.
"We believe we have a solid business strategy that will allow us to continue to support the potato industry in Saskatchewan. We have gone through some difficult times financially with our investment, but we are proud of the infrastructure we have developed for growers. The province's irrigation system and the efforts of the Saskatchewan Valley Potato Corporation have built the foundation for a promising industry."
For more information, contact:
Crown Investments Corporation
Phone: (306) 787-9039