Canadian prairies provide quality corporates despite lacking in quantity

Aug 01, 2009
<p><em>IR magazine </em>investigates how the prairie of Saskatchewan produces award-winning investor relations departments.</p>

The province of Saskatchewan, a vast swath of prairie and forest in the middle of Canada’s own vastness, has just 1 mn people and a mere handful of listed companies, including PotashCorp and Cameco, both on the S&P/TSX 60 large-cap index. These few can give the world’s many an object lesson in hard work and high-grade IR.

Viterra, the province’s third-biggest stock, is its current greatest pride. In 2003 the drought-stricken Saskatchewan Wheat Pool stared down bankruptcy and did a massive balance sheet restructuring. In 2006 it made a gutsy bid for Agricore United in neighboring Manitoba province and took the name Viterra after winning the C$1.8 bn ($1.5 bn) takeover fight.

Shrugging off the worldwide financial crisis, Viterra returned to the equity markets in 2008 and 2009 to build another war chest. In May this year it launched the C$1.4 bn acquisition of Australia’s ABB Grain.

Colleen Vancha, senior vice president of IR and corporate affairs at Viterra, built the IR department after Saskatchewan Wheat Pool went public in 1996 and has been at the center of the action all along. She is now steering an M&A campaign that would do justice to companies 100 times the size of Viterra and ABB.

Having already visited Australia to learn about the deal’s strategy and ABB’s people and culture, Vancha masterminded a joint press release, conference calls and roadshows straddling the two time zones and disclosure regimes. Now her sights are set on ABB’s August shareholder vote and the preceding 400-page scheme document. ‘It’s massive, it needs to drive all disclosure and we need to uncomplicate it,’ she explains.

She is also focused on the deal website,, which includes a feature that calculates the value of the three purchase options (cash and shares, cash only or shares only) depending on currency rates and Viterra’s share price.

Vancha, who in June hosted a group of Australian growers studying the proposed deal, says the two companies’ cultures mesh. ‘Australians will open the door to anyone. Western Canadians are the same,’ she says.

Open door
That openness is exemplified by PotashCorp, Saskatchewan’s largest company, whose annual reports and sustainability reports consistently win praise. The tradition of top-notch IR was set by Betty-Ann Heggie when PotashCorp went public in 1989 and has being carried on since Heggie’s 2007 retirement by Denita Stann, senior director of IR, and IR manager Tim Herrod.

As the disclosure policy officer for PotashCorp, Stann works with sustainability manager John Hewson on the annual sustainability report. The company started including CSR discussion in its annual report in 1999 and produced its first stand-alone report in 2002.

PotashCorp’s 2007 sustainability report made a significant departure: it went from 92 pages to a 32-page printed summary with signposts directing ‘data miners’ to more detailed information online. This year’s 28-page print report came out in June, months earlier than it used to. Now PotashCorp is considering whether to update key online data from its sustainability program every quarter.

PotashCorp’s financial reporting has been evolving the same way, with summary printed reports pointing to deep troves of online information. The annual report and sustainability reports also have a theme in common. This year it’s ‘More per acre’.

Defragmenting the message
When Cameco’s Cigar Lake mine in northern Saskatchewan was completely flooded after a rock fall in October 2006, the company’s response was textbook crisis communications. With scanty information and well before any remediation plan, the world’s largest uranium miner began talking to the press and investors almost immediately.

‘The guiding principle is always to be forthright, and our CEO Jerry Grandey is very supportive of that,’ says Bob Lillie, Cameco’s IR director. ‘It’s a trade-off between wanting to be open today and waiting until tomorrow when we’ll have better information. We’ve always tried to practice the former.’

When senior management went out on roadshows within a few weeks of the flooding, investors would say, ‘I’m surprised you’re in New York considering the problems.’ ‘But that was the very point of it,’ Lillie explains. ‘Investors wanted as much information as we could share so we got senior management out there.’

Cameco is helped by having all its communications functions – community (critical in relation to Canada’s northern aboriginal communities), media, investor and government – in the same department. For many years the group was led by Alice Wong, who was recently promoted within the company and replaced by Sheryl Fox.

Prairie work ethic
Saskatchewan’s IR pros are high in quality but not numbers, so while Vancha and Stann are CIRI board members, they don’t have a local chapter. They have, however, helped nurture some strong local service providers. For example, Saskatoon-based Creative Fire has worked on annual reports and other projects for PotashCorp, Cameco and Viterra.

Another Saskatoon company, communications, has been with PotashCorp and Cameco almost since it was founded around 15 years ago by Ryan Lejbak and Tony Zuck. It now has 55 employees. Over the last year, built a whole new website for CN and an IR website for Rogers Communications, two of Canada’s biggest companies. According to IR Web Report, also does Intel’s online proxy statement and annual report.

So how did a little company on the prairie end up handling some of the biggest jobs in IR? And how come Saskatchewan’s three biggest stocks all have such outstanding investor relations?

‘We’ve got the prairie work ethic here,’ Lejbak suggests. ‘Our grandparents and great grandparents were farmers. They had to work hard to make ends meet, and they passed that habit down from generation to generation.’ One result, he adds, is that talent has been one of Saskatchewan’s biggest exports.

‘There’s no question – I’ve never met a harder-working group of people than Saskatchewan people,’ agrees Stann, who has also lived in the US and Australia.

These days that pride is boosted by the fact that Saskatchewan, with its farms, mines, oil sands and talent pool, looks recession-proof – which is a nice change after years of pale comparisons with booming Alberta to the west. ‘It’s a pocket of prosperity you’re not really seeing anywhere else,’ Stann says.

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