P & H makes bid for Owen Sound port

Tuesday, September 17, 2013

by SUSAN MANN

Grain marketer Parrish & Heimbecker Ltd. is negotiating with Transport Canada to take over ownership of the Owen Sound Port.

Rob Bryson, P & H grain group vice president, says they’re negotiating for ownership of the port to “keep it alive. I think the fit with Parrish & Heimbecker is we’ve done a good job of growing the business in the Port of Owen Sound and by lowering shipping costs to our customers that promotes more growth.”

Bryson says as part of the negotiations P & H has signed a letter of intent and a confidentiality agreement with the federal government. The company has also already received engineering reports, environmental and financial information about the port from Transport Canada. P & H has just started to review the data and Bryson says he doesn’t yet know what the value of the port is.

Transport Canada spokesperson Clay Cervoni says by email that the confidentiality agreement puts restrictions on both sides from releasing information about the negotiations. He didn’t reveal how much the port is worth either.

Bryson says the bulk of negotiations will happen in the next two months. “We’ll be able to get our head around pretty quickly as to what the cost-effectiveness is, and what the risks are.”

Bryson described Owen Sound as a small port and the “last surviving Georgian Bay port.”

P & H, a private, family-owned company founded in 1909 with locations throughout Canada and the northern United States, ships grain in an out of Owen Sound and also has a terminal at the port that can hold about 100,000 tonnes of grain. It has had the terminal at the port for about 85 years. Bryson says the amount of grain the company ships in and out of the port annually is confidential.

“We’ve built the business up there considerably in the last 10 years,” he notes, adding the port was very quiet previously. The company brings in milling wheat from Western Canada through the port while Ontario grain for export is shipped out within the Great Lakes to Toledo, Ohio or Buffalo, New York and also to overseas markets.

P & H is pretty much the only user of the port but there is “a little bit of cement business” too, he says.

The company owns the active part of the port already. It has always owned its own dock, which is the only dock being used in the port, along with the land and the pier walls that separate the land from the water. “The difference in this is we’re just kind of taking on the unused portion of the port and looking at developing economic opportunities for it,” he says.

Bryson says the port’s channel access is silting in and is nearly unnavigable. P & H is pushing Transport Canada to dredge but they “won’t dredge until after it’s divested.”

Cervoni says the federal government has owned the Owen Sound Port since the mid-1800s. The port is part of Transport Canada’s port divestiture program, designed to transfer regional and local ports to other federal departments, provincial or territorial governments, or local interests, including municipalities or port authorities that can be formed locally. These groups are better “positioned to operate them in a manner that is more efficient and responsive to local needs,” he says. That program ends March 31, 2014.

Since the divestiture program began in 1996 Transport Canada has offloaded 489 ports for a savings of $470 million. There are still 60 federal ports slated for divestiture.

This isn’t the first time Transport Canada has transferred a regional port to a company, Bryson notes. But if negotiations are successful it will be the first time P & H will own a port.

Cervoni says it’s not unusual for port users to become new owners under the port divestiture program “nor would this be the first time a company handling grain has acquired a port.” BF