On the eve of Co-op Week in Innisfail, Red Deer and Central Alberta Co-ops joined forces to eliminate inefficiencies, develop markets and remain competitive.
Out of 113 members present at a vote in Innisfail Oct. 10, and 113 in Red Deer Oct. 11, not one vote against the amalgamation was registered.
Directors claim the merger will realize $500,000 in initial savings without the loss of a single job. While 2011 sales in Red Deer hit $139.9 million and at Central Alberta Co-op Ltd. hit $73 million – totaling $213 million – the member-controlled entity says it expects that to rise to $275-million over five years thanks to the move.
“We've just got that much stronger of a balance sheet,” said Russell Wolf, president of Central Alberta Co-op. “We have the ability to jump on opportunities that arise.”
Wolf said this will allow the company to continue to directly compete with multinationals.
“We have trucks driving side by side,” he said. “Our competitors don't do that.”
While the amalgamation keep Co-op focused on the larger picture, it will also allow the company to stay community oriented, he said, noting it creates more opportunity for keeping businesses in local hands, such as when they bought the Spruce View liquor store.
Diane MacKay, a director with Central Alberta Co-op, said because their fundamentals are strong, the amalgamation will allow the company to build from that base, and expand its trading area.
“There's a lot of opportunity for growth in our agricultural sector of the business with amalgamating with Red Deer Co-op,” she said. “We've got the services. We just need to expand into that area”
Sam Johnson, a member of both the Innisfail and Red Deer Co-ops, spoke out at the meeting prior to the Red Deer vote, held at the Black Knight Inn, acknowledging his support for the merger but stressed worries he has about such growth.
“We may lose some of the things that make this unique and beneficial,” he said in an interview following the vote.
But Johnson says the potential convenience outweighed the risks. Right now he gets his fertilizer in Innisfail and his liquor in Red Deer, and is frustrated he can't buy barbed wire in Lacombe.
He said other co-ops have grown and either lost touch with their members, or become an accounting casualty, as when the Central Alberta Dairy Pool ended up being sold to Saputo.
Garry Devries, a director from the Red Deer Co-op board is familiar with inherent risks and benefits involved in growing co-ops. After all he had served on the board of the Central Alberta Dairy Pool.
The main difference between the two scenarios is the central Federated Co-op can provide financing if necessary, unlike the dairy pool, which took on debt with a number of financial institutions.
“The biggest thing was the private financing,” Devries said. “And this was set up with Federated backing us.
“We don't need the financing. We're both solid Co-ops.”
