April 24, 2017, Montreal – Caisse de dépôt et placement du Québec (la Caisse) has outlined its strategy for Québec’s agri-food sector. It also announced the creation of a $125-million fund to invest in every segment of the sector’s value chain, targeting both companies seeking to accelerate their growth and farmers who operate family businesses, and their successors.
“This is a sector with strong growth potential for Québec. It has all that’s needed to succeed, both at home and in global markets, which are becoming increasingly competitive.
“For la Caisse, it’s important that both today’s farmers and their successors, as well as companies in the processing, distribution and marketing segments, be well positioned to compete and face the challenges in this sector,” said Christian Dubé, executive vice-president, Québec at la Caisse.
“As we have done in other industries, la Caisse plans to support promising projects in Québec’s agri-food sector, using a variety of approaches,” added Dubé.
“This plan is fully aligned with la Caisse’s business strategy in Québec. Agri-food is a complex, diverse and cutting-edge sector that requires a long-term, viable business environment tailored to its distinctive features, particularly to foster development, innovation and business transfers to the next generation.”
ASSISTING THE ENTIRE VALUE CHAIN
The agri-food sector generates substantial economic activity in Québec. Each year it adds close to $22 billion to Québec’s GDP. The sector accounts for approximately 500,000 jobs, and exports more than $7.5 billion of its production.
The sector’s value chain in Québec consists of three main segments: agricultural production, food processing, and food distribution and marketing.
Québec’s food production is diversified and of high quality. The sector features several areas of excellence, including the production of maple syrup, pork, veal, milk, dairy products, grain, fruit and vegetables.
In addition, Québec boasts a network of dynamic food processing entrepreneurs in every region, representing some 2,200 businesses, 90 per cent of which are SMEs. Québec also counts international leaders in processing and marketing (Agropur, Saputo, Olymel, etc.) that contribute to the globalization of the industry.
CHANGING GLOBAL MARKET
Between now and 2050, the expected growth in the world’s population will require an almost 70 per cent increase in food production. At the same time, the agri-food industry is going global, with complex supply chains designed to meet growing consumer demand for healthy, fresh and affordable food all year round.
Entrepreneurs in the agri-food sector are working to become better integrated into the value chain, both upstream and downstream, to keep their product offering safe, protect themselves against fluctuating commodity prices, withstand environmental changes, take on technological challenges, improve the traceability of raw materials, and know their customers, while maintaining their value and their flexibility.
La Caisse has been investing in agri-food processing and distribution/marketing for many years. The strategy presented today aims to maximize la Caisse’s impact and expand its presence throughout the value chain and among all types of businesses and of projects by covering the entire agri-food sector.
This strategy is built on four pillars:
• Supporting young farmers and entrepreneurs who want to take over a business or create new market leaders.
• Backing owners and the family-farm model in the production segment.
• Reinforcing technological transition by improving access to modern equipment.
• Supporting growth and the expansion of operations in regional and international markets in industries where they are competitive.
CREATION OF FONDS AGROALIMENTAIRE CDPQ
To further support projects in the agri-food sector, la Caisse has announced the creation of the Fonds agroalimentaire CDPQ. This $125-million fund will be used to make direct investments (between $1 million and $30 million) in every segment of the value chain, with farmers and in projects and SMEs.
Specific criteria and targeted investment amounts vary for each segment in the value chain, as shown in the table available on the Caisse’s website.
Investments in the agri-food sector will also be made through funds, in partnership with those active in the industry and other experts in targeted markets (between $5 million and $30 million). The Fund will target investments meeting certain criteria, including:
• A well-structured business plan.
• A well-established management team to provide farmers and entrepreneurs with proper support and structure.
• A transition and succession plan.
• A solid performance track record and growth strategy.
An investment structure positioning la Caisse as a long-term partner for sustainable businesses and projects.
ABOUT CAISSE DE DÉPÔT ET PLACEMENT DU QUÉBEC
Caisse de dépôt et placement du Québec (CDPQ) is a long-term institutional investor that manages funds primarily for public and parapublic pension and insurance plans. As of Dec.31, 2016, it held $270.7 billion in net assets.
As one of Canada’s leading institutional fund managers, CDPQ invests globally in major financial markets, private equity, infrastructure and real estate. For more information, visit cdpq.com.
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