On June 15 Agrium Inc. President and CEO Mike Wilson reasserted the company’s commitment to its retail business and emphasized its importance to Agrium’s vision for continued growth at Agrium’s recent investor day session in Baltimore, Maryland.
The investor day included a tour of a nearby Agrium retail farm center. In discussing Agrium’s strategy and outlook for the company, Wilson spoke repeatedly of retail’s importance within the company’s core strategy – “to invest across the value chain and continue to add to our stable earnings base.”
In speaking of Agrium’s ongoing efforts to acquire CF Industries, Wilson remarked that when the CF news was released, many people were concerned Agrium would abandon retail. Wilson replied “No. Understand our strategy: it’s across the value chain.” Agrium said Wilson was very clear that when Agrium seeks to grow its wholesale business, it doesn’t mean the company is abandoning its retail business. “And when we invest in retail,” he added, “it doesn’t mean we’re abandoning wholesale.”
Wilson went on to explain that Agrium will grow its retail business through acquisitions, continued enhancement of the base business, including growth in its seed business, and broader offerings of Agrium’s private label products. “We will double our retail business in the next five years,” he told the audience.
Following his presentation, Wilson fielded a question from the audience about whether it makes sense for Agrium “to give the public markets a chance to invest in a ‘pure play retail asset.'” While Wilson acknowledged that spinning off its retail business “is always an option,” Agrium said he was unequivocal that the company has no plans to divest its retail business. A Bloomberg article was published based on this response, claiming that Agrium was considering spinning off its retail business. Wilson reiterated his position, noting that the remark about looking at all options was taken out of context. “We continually evaluate all options as we strive to provide our investors with superior returns. That includes the possibility of divesting or spinning-off various segments of our business. But simply considering a possibility doesn’t mean it is likely to occur … especially when such a move would be out of line with the company’s strategy, clearly retail will continue to play a crucial role in Agrium’s vision for growth for the foreseeable future.”
As Green Markets previously reported, Agrium earlier asserted retail’s importance to Agrium, and that Wilson did not mean to indicate it was to be spun off (GM June 15, p. 14).