The Rural Voice, 1992-03, Page 14CANADIAN
CO-OPERATIVE
WOOL GROWERS
LIMITED
ACCEPTING
WOOL CLIPS
ON CONSIGNMENT
',Lc,141ei 11t4
Skirted Fleeces
* Well -Packed Sacks
For more information contact:
RIPLEY
WOOL DEPOT
John Farrell
R.R. 3, Ripley, Ontario
519-395-5757
PURPLE GROVE
Portable Seed•
Cleaning
And Treating
00
Grains, Beans and Forages
Bag or Bulk
Convenient and Economical
Serving Mid -Western Ontario
R. R. #2
Kincardine, Ontario
N2Z 2X4
396-4559
10 THE RURAL VOICE
CHANGES AHEAD
FOR UCO
Robert Mercer is editor of the Broad-
water Market Letter, a weekly
commodity and policy advisory letter
from Goodwood, Ontario LOC 1AO.
UCO is out of the retail business. It
will concentrate on being a wholesaler to
larger, multi -unit regional member co-
ops. It is forging ahead with a major re-
structuring that will see 25 to 35 member
co-ops with "branches." It will see a total
work force of 1,350 in 1989 reduced to
1,000 this year and the head office staff
cut to 200 from 350.
Executive vice-president of UCO Gor-
don Cummings told a meeting of the Can-
adian Agri -Marketing Association at the
time of the Farm Show in Toronto that to-
tal sales in 1992 might be only $300 min,
without petroleum — down from $500
min in 1990 — but the company will con-
centrate on what it knows best, and is best
suited to supply for customer satisfaction
and service.
He said that the new vision for UCO
is as a strong wholesaler, with fewer
stronger, larger member -owned retail co-
ops in a federated system. Although UCO
was getting out of retail sales directly to
farmers, he said he expected the local
member co-ops, current or new, to pick
up the volume.
In summary, the new executive vice-
president, who has been with UCO for
just over two years, said, "We expect that
by the end of 1992, the changes we have
made will result in an organization that is
customer -responsive right across Ont-
ario."
What has this restructuring of UCO
cost in terms of physical plant and asset
changes? First, there was the restructur-
ing of 84 retail stores that were re -focused
on specific product sales lines for custom-
er traffic building. Many of these stores,
Cummings said, did high volume business
in bird seed and pet food as well as their
more traditional farm supply items.
In his review of the challenges and
changes, he noted the lack of change,
commenting that over the years the UCO
had acquired 75 of the local co-ops and in
that time had not tumed one around back
to members or profitability. There are, he
said, "too many co-ops in Ontario!"
UCO, as a new wholesaler only, has
gotten out of the com seed business, and
will remain as a distributor only. It sold
the two fertilizer plants at Stratford and
Tillsonburg. It closed retail locations at
London, Brampton, Newmarket, Inwood,
Georgetown and Mt. Elgin. It closed feed
mills at 11 locations, rationalized petro-
leum distribution, cutting six trucks with
no loss in volume, and entered into a 10 -
year supplier agreement with Sunoco.
In grain, UCO has a marketing agree-
ment with ADM, reducing cash require-
ments by $10 min and has sold the Wind-
sor grain terminal which Cummings said
caused over $10 min losses to UCO in the
1980s. Total inventory has been reduced
by $30 min and head office staff by 33
per cent.
This is a dramatic change in Ontario's
sleeping giant of ag supply industries.
Co-operative restructuring in Ontario, as
Cummings calls the new vision for UCO,
has shaken the co-op movement. It has
gotten rid of excess baggage; focused on
the need for larger co-op retail units; fo-
cused on services, wholesale, and on a
two-year time frame to get the job done
with the help of the banks. After his ad-
dress, Cummings stated that UCO had not
received any new money from the prov-
ince, although a request had been made
and considered.
The new form of the retail end of the
co-op business that serves farmers direct-
ly will be "county" sized co-ops, doing
possibly 5-7 times the volume of previous
co-ops. There will be the central location
with 3, 4, 5 or 6 satellite operations, all
member -owned. This is the first major
restructuring of a co-op movement in
North America; according to Cummings,
no others have bitten the bullet, although
many in the U.S. admit to problems.
Will this new approach work? Cum-
mings says, "When you talk about vision
you have to stick your neck out and be a
leader." That is what is happening in On-
tario now. It will not be easy.
"It is easy to understand the vision,
but hard to apply," he adds. There are the
local problems of pride, history, comfort
with the present, concem for the unknown
and the usual human fear of the unknown.
UCO is changing from the top down;
it is also slimming down. It has, at last, a
new management style. This is the year
when UCO will either survive or die.0