Boards of farmer-owned cooperatives unanimously approve process for due diligence, potential member vote
RALSTON —The boards of directors at two of Iowa’s leading farmer-owned cooperatives yesterday signed a letter of intent to study the membership benefits of a unification. The boards of Farmers Cooperative Company (FC), of Ames and West Central® Cooperative of Ralston have unanimously approved the first step towards a potential unification of the two companies.
“This letter of intent allows us to further explore equity, governance, organizational structure, asset investment and other member-focused efficiencies,” explained Sue Tronchetti, a Paton-area farmer and chairperson of the West Central board.
Both FC and West Central are profitable companies with strong balance sheets.
“In our first series of discussions, we have identified several opportunities that we believe will benefit our members today and for decades to come,” explained John Scott, an Odebolt-area farmer and president of the FC board of directors.
“We recognize we must continue to serve the needs of our members in order to remain relevant in a global supply chain and in turn, protect our members’ cooperative investment,” added Tronchetti.
“Our early discussions highlight opportunities to improve productivity by sharing resources to better deploy assets like application equipment, rail access and truck logistics,” explained FC chief executive officer Jim Chism. “Being more effective in our execution would reduce costs and allow us to better serve customers.”
Chism added, “We believe the opportunities in a combined company would also provide more consistent, value-added customer service.”
“Each organization brings unique strengths to the table which we believe would further diversify our businesses,” said West Central president and chief executive officer Milan Kucerak. “For example, FC has access to every major rail line in Iowa and West Central has built-in soybean demand for 20 million bushels annually at our SoyPlus® manufacturing plant.”
“In addition, by strategically channeling capital we would be able to target larger, more substantial investments to benefit members,” added Kucerak. “We aim to always better utilize member resources and in turn, improve our services.”
In coming weeks, the companies will host a series of employee and member meetings and conduct due diligence. Then, the boards will determine whether to take the unification proposal to a membership vote. Should the process move to a membership vote, both FC members and West Central members would vote.
Board chairs Scott and Tronchetti urged members to participate in member meetings during the due diligence phase to share feedback and concerns with management and the board. A list of meeting dates and locations is available online via each company’s website (http://www.fccoop.com/ OR http://west-central.com/) in the customer log-in section.
