Plans major investment in Langbank factory: Väderstad purchases Seed Hawk
October 21, 2013 8:03 am
Swedish implement manufacturer Väderstad, which had owned 49 per cent of Langbank-based Seed Hawk since 2006, purchased the rest of the company Thursday.
Väderstad plans to manufacture a new line of corn planters for the North American market at Langbank, which will require a major investment in the Langbank plant.
Seed Hawk has seen its sales grow from $10 million when it partnered with Väderstad in 2006 to $70 million today. The company has also seen its work force grow immensely, and company founder Pat Beaujot says he sees the growth continuing with Väderstad’s plans.
“When Brad Wall opened our expansion in 2011, we had 100 employees, and right now we’re close to 250,” he said. “I can see that kind of growth continuing. I can see us adding 100 people a year.”
“We see great potential in Seed Hawk,” says Christina Stark, CEO of Väderstad. “One of the keys to the North American market is local presence, and Tempo, our high-speed precision planter, is a strategically important product for reaching that market. Together with Seed Hawk’s product range we increase our chances to succeed for both companies. We also see great synergies.”
She said Langbank will continue to be Seed Hawk’s head office and primary production site for the long term.
“Since the beginning of the co-operation, Väderstad has been impressed by Seed Hawk’s spirit, inherent power, innovations and potential for growth,” she said. “Since 2006 Seed Hawk sales have increased 700 per cent.”
“When Väderstad was considering investing in a North American factory, Seed Hawk management felt strongly that there was no better place to do it than Langbank, Saskatchewan,” says Beaujot, Seed Hawk’s founder.
“However, in order to make an investment of that magnitude, Väderstad wanted controlling interest in the company. When my partner Brian Dean and I looked at what having an even larger factory expansion in Langbank could do for our employees, our community and our province, it just made sense for us to sell. We know Väderstad will continue to build a very strong company in Langbank, as they think very long term.”
Seed Hawk has been around since 1992, when the Beaujots used their first seeder to seed the crop on their farm.
“We decided to start the company that spring,” says Pat Beaujot. “There were air seeders around since the 1970s but they really didn’t work that well. Having an independent depth control opener made the difference.
“We switched to zero till on our farm and came up with the design. In the late ‘80s Roundup came off patent and farmers were trying to switch to zero till.
“The implement companies all sold tillage equipment so they didn’t go after it hard.
“It was going to take a company like ours to serve the market.”
Beaujot says he always had big dreams for Seed Hawk.
“When we started it I knew there was a big demand for this kind of stuff. There were 80 million acres of farmland on the prairies, and at the time, the average farm was 1,000 acres, so that’s a lot of farmers, such a big potential market.
“I’m the kind of guy who dreams big, so it doesn’t surprise me how big the company has become. I actually thought it would grow faster. I had big dreams, and we built a big company, but it didn’t go quite the way I thought. It takes time to build an equipment company up.”
He said in the early years the Seed Hawk air seeder didn’t have much direct competition.
“We didn’t get any followers until 2000 or so when we saw the bigger competitors come in with similar designs.”
When Väderstad initially bought a minority stake in Seed Hawk, the plan was to market the Canadian-made seeders in eastern Europe.
“It went differently than we thought,” Beaujot says. “We thought Russia would be buying thousands of these, but the financial crisis hit Russia and Ukraine hard.
“We worked hard in our own market, and most of this growth has been in our own market and the northern U.S., along with some in Australia. A lot of the growth has been local, but with Väderstad’s knowledge and strength behind us, we could invest in R and D and facilities. We learned how to invest in the right people and equipment.”
Väderstad, which was started by a Swedish farmer who came up with a better disc design for Sweden’s rocky soil in 1942, is still a growing company. The company had $200 million in annual sales when it bought 49 per cent of Seed Hawk in 2006. It has now grown to $340 million in annual sales.
Beaujot says Seed Hawk and Väderstad have worked well together.
“When we met them in 2006 you could see they had a similar way of thinking to us, and since then the respect and trust has grown.
“Now they really want to take us to the next level. They want to invest a lot more in here than we could.
“They have a new product, a corn planter, that’s aimed at the U.S. market. The new products will be built in Langbank. What happened is they designed this planter, and they debated whether they should build it down in the States, where the market is huge. We thought they should build it here. They’re investing in the plant.
Seed Hawk will have a subsidiary in the U.S. for sales.
The current General Manager, Peter Clarke, will become President and CEO of Seed Hawk.
“Peter has been a key part of our rapid growth in all markets over the last few years and I know he is the right person to take Seed Hawk into the future,” says Beaujot. “In addition, I’m happy to say that it will be business as usual for Seed Hawk customers, dealers and suppliers as Seed Hawk will continue to be run with its core management team.”
“A very important part of the deal for us was to ensure that both Pat and Brian remain with Seed Hawk,” says Christina Stark.
“Pat and Brian will continue to work with strategic product and market development and be members of the board, which is reassuring for us. Together Pat and Brian have been leading innovation in no-till seeding technology for over 20 years.”