Three ag co-ops poised for possible merger
ROCK VALLEY, Iowa -- Following months of study and preparations, the Board of Directors for United Farmers Coop (UFC), Farmers Elevator Cooperative (FEC) and Cooperative Elevator Association (CEA) have approved a merger/unification to be taken to...
ROCK VALLEY, Iowa - Following months of study and preparations, the Board of Directors for United Farmers Coop (UFC), Farmers Elevator Cooperative (FEC) and Cooperative Elevator Association (CEA) have approved a merger/unification to be taken to a vote of the Class A Members of the three companies.
“This is an exciting time for these three co-ops, each having a rich history,” said Kennis Peters, board president of UFC. “What a great opportunity for three financially strong companies to come together and position themselves with strong leadership and the capability to be viable for the next generation of our co-op membership.”
Eleven membership informational meetings took place between the UFC, FEC, and CEA companies to inform members of the potential benefits of the proposed merged company. Fifty-seven employees and six outside consultants worked to put together the proposed structure, synergies and benefits to the members.
Potential benefits of the merger include: long-term financial strength; collaboration of information/technology; enhanced buying power; greater market intelligence; capturing Arbitrage opportunities; aiding in employee retention and career development; utilizing transportation alternatives; and strategic placement of assets (agronomy, feed and grain).
“We are committed to creating a company that has long-term financial strength while protecting our members’ equity,” said Dave Van Holland, board chairman of Farmers Elevator Cooperative. “We want to do this in a way that reinforces treating our customers and our employees with honesty and respect. This is a unique opportunity to bring three companies together that have strong balance sheets and also have strong histories in their commitment to customer service.”
Other considerations in the merger include:
- 100 percent of allocated equity will be protected.
- Patronage revolvement will remain a key strategy to the new cooperative. Proposed operational efficiencies will allow an opportunity to retire patron equities, while balancing the need to invest in upgraded facilities and rolling stock.
- The new company will have local governance and local management. All three cooperatives will have current board members serving on the new board of directors.
- Customers will continue to be served by current employees and locations.
- As the oldest company, Rock Valley’s charter will remain the charter of the new company and the home office will be in Rock Valley.
- All three administrative offices will remain open. As VP of Grain, Jeff Christensen will maintain his office in George, Iowa as CEO Rob Jacobs will maintain his office in Ocheyedan, Iowa, and as CFO Mark Finck will maintain his office in Rock Valley.
- All employee jobs are secure. The combined company will continue to strive to be a “destination employer” for all employees.
- Cost savings will be achieved through improved logistics, divisional synergies and inventory controls.
- This new cooperative will be a strong, diversified cooperative positioned to be a relevant long-term provider of markets, goods and services.
“The executive boards have worked over the past few months to determine how this new cooperative will look, and they have been great to work with,” said Brent Tewes, Board Chairmen of CEA. “In addition, our employees on the study committees have put in a lot of work to provide us with excellent information of how a unified company would look.” Ballots were mailed out March 30 and must be received by Friday. Members can return their ballots by mail in the postage-paid, addressed envelope that was included in the mailing or they can drop them off at any UFC location.
Fifty percent of Class A members must vote, and two-thirds of the votes received must be in favor of the merger, in order for the merger to pass.
Questions may be directed to Jeff Christensen, General Manger, UFC (712) 475-3347; Mark Finck, General Manager FEC (712) 451-6280; or Rob Jacobs, General Manager, CEA (712) 758-3636.