Embed Size (px)
Citation preview
Experience With International Membership
Bill DavissonGROWMARK, Inc. CEO
Point of Reference
GROWMARK is:– Regional farm supply & grain marketing
cooperative– Based in Bloomington, Illinois– $2.8 billion in sales (2005)– Nearly $1 billion in assets– Ranks among the largest agricultural
cooperatives in North America
Point of Reference
GROWMARK:– Began as Illinois Farm Supply Co. in ’27– Expanded to Iowa/Wisconsin in ’60s– Consolidated with Ill. Grain Corp. in ’80 to form
GROWMARK– Purchased assets of UCO in ’95
(35 member cooperatives in Ontario)
Point of Reference
GROWMARK:– Expanded marketing territory in ’90s– Investment in Mexican feed company in ’96– Purchase of AgWay agronomy assets in ’02– Today, business in 21 states, Ontario, and
Mexico
Point of Reference
GROWMARK Strategic Direction– Maintain strong member system– Grow & expand from core products– More involvement with “value added”– Expand marketing territory– Mergers/acquisitions supporting
business strategies
Point of Reference
GROWMARK Ventures/Investments:– Benefit to core membershipBenefit to core membership– Related to core business Related to core business
competenciescompetencies– ROI (15%)ROI (15%)– Further strategic directionFurther strategic direction
Canadian Member Business
Acquisition of UCO assets (1995)Factors in the decision…- UCO structure – similar to GROWMARK
- Federated- Loyal members- Farmer focused- A “system” approach to business
- Common agriculture - Corn- Soybeans- Livestock
Canadian Member Business
Factors in the decision continued…
- Core businesses- Agronomy- Energy- Feed- Grain- Consumers
- Economic opportunity/growth
Canadian Member Business
Where is Ontario agriculture?
Canadian Member Business
Why approach as member business?
Canadian Member Business
Why approach as member business?
Ownership options:
- Canadian General Business Corp
- Canadian Cooperative Subsidiary
- Operate in Canada as GROWMARK
(member basis)
Canadian Member Business
Why operate on member basis?
Largely a philosophical decision…- UCO members wanted to “buy” a regional co-op
- UCO members willing to invest in GROWMARK up front & over time
- UCO members desired to be “equal” with U.S. members(Note: All but 2 of the former UCO members became members of GROWMARK)
Canadian Member Business
Challenges: Legal and tax issues
- Revenue Canada rulings
- Canadian Securities Commission issues
- Anti-Trust laws in both countries
- Bankruptcy issues (UCO)
- Pension/benefit laws/programs
- “Doing business with Cuba”
Canadian Member Business
Other challenges:
- Expatriate management & Customs
- Governance (GROWMARK Board)
- Acceptance of U.S. company in Canada
- Acceptance of decision by U.S. members
- How would ownership investment by members be equalized?
Canadian Member Business
Other challenges:
- Cultural issues
- French Canadian issues
- Acceptance of U.S. company in Canada
- Acceptance of decision by U.S. members
How would ownership investment be equalized?
- Currency issues
Canadian Member Business
Process of assimilation:
- It’s about the people!
- Joint meeting of member co-op managers/ board presidents
- “Teaming” of co-op leaders (US/Canadian) for facility tours
- Employee meetings
- We discovered our similarities were great
Canadian Member Business
Process of assimilation:
- Staffing started as combination of former UCO and a few key, long-term U.S. employees
- Today, the Ontario region staff is all Canadian
Canadian Member Business
Given 20/20 hindsight,
would we change anything?
Not much –
- Pleased with Revenue Canada rulings
- May have kept some things separate (patronage pools, etc.)
Canadian Member Business
No more “one size fits all”
Tension: Unity vs. Uniqueness
Canadian Member Business
Keys to success:
-In this instance, having Ontario member cooperatives as full, “equal” members was essential
-Recognize differences, but blend the family
International Non-Member Business Example
maltaCleyton
- 2nd largest animal feed company in Mexico
- Diversifying into pet food/ aquaculture
- 44% management ownership
- 44% GROWMARK ownership
- 12% private investor ownership
Non-Member Business
maltaCleytonWhy make the investment?Supports strategic direction
- Core business- Geographic expansion- Solid ROI- Growing market- Market for grain
Non-Member Business
maltaCleytonWhy non-member investment?- Not a cooperative to begin with- Different risks/challenges:-Country’s economy/government-Security-Language-Culture
Determining the Appropriate Strategy
- Let principles guide
- Think globally
- Calculate risks
- Monitor results
- Nurture relationships
- Be aware of issues/attitudes in each country
Questions?
