" /> Quebec and Manitoba firms merge to create national cold storage chain - Canadian Sailings

By Keith Norbury

A new national player in Canadian cold storage has been born, the fruit of a marriage between longtime family companies in Quebec and Manitoba. Congébec Logistics Inc., which has dominated the refrigerated services market in Quebec for almost a decade, became a truly national company in February with the acquisition of Winnipeg-based Westco Multitemp Inc.

“We have changed dramatically, I would say,” Laurier Pedneault, Congébec’s President and founder, told Canadian Sailings. The transaction includes Westco’s four temperature-controlled warehouses – in Winnipeg, Saskatoon, Calgary, and Carberry, Manitoba – now providing Congébec with 12 warehouses in total across the country. Combined, they have 1.46 million square feet of floor area and 46.5 million cubic feet of storage space with 185,000 pallet positions, said Chantal Jura, Congébec’s Communications Consultant.

While the arrangement does not give Congébec a presence in B.C. at the moment, the company can now access the Pacific coast much more easily from its facility in Calgary, Ms. Jura said. She characterized the acquisition as “as a marriage between two families” because both companies are private, family-owned enterprises. For the time being, Westco, which William “Bill” Glesby established in 1959, will continue to operate under its own name as a division of Congébec. “A year from now, we’ll see where we’re going to take that. We might change all of them to Congébec,” Ms. Jura said. The deal doubled Congébec’s workforce to 400 employees in one fell swoop. That now makes it the 12th largest public refrigerated warehousing company in North America and 15th biggest in the world, according to the International Association of Refrigerated Warehouses, Ms. Jura said. In Canada, that means Congébec is now “runner up” in the cold-storage world to Vancouver-based VersaCold Logistics Services, Mr. Pedneault pointed out. VersaCold did not respond to requests to comment.

Darryl Anderson, a Victoria, B.C. transportation consultant, said he was not surprised to learn of a consolidation in the cold-storage industry. He noted that some cold storage companies were owned by Icelandic firms, which had to sell off assets in the wake of the financial crisis. For example, Eimskip Holdings Inc., which bought VersaCold in 2007, sold 49 per cent of its stake in 2009 to Los Angeles-based Yucaipa Companies LLC. Mr. Anderson said Congébec’s acquisition of Westco shows that the cold storage sector “continues to attract investment even though there has been some other restructuring.”

By being a regional player, Congébec probably came out of the recession with a stronger balance sheet than other companies that might have over-extended themselves before the recession, Mr. Anderson added. Mr. Pedneault indicated that the acquisition of Westco will enable Congébec to go head-to-head with VersaCold, which has “more than 38 distribution centres across Canada, with a combined storage capacity of 118 million cubic feet,” according to the VersaCold website.

“We were already dealing with large international corporations, American companies and Canadian companies as well, and doing business across the nation,” Mr. Pedneault said. “But now we have facilities all over the place. So now we can talk about having a network, being able to accommodate their needs from ocean to ocean, or as you say in English, coast to coast.”

That’s a sea change from Congébec’s humble beginnings. Mr. Pedneault founded the company in 1974 in Quebec City with half a dozen employees at an ancient cold storage plant built in 1922 near the city’s old port. That original building has since been transformed “into a wonderful lawyers’ office,” he said.

The company now has two modern warehouses in Quebec City about 500 feet apart and totalling 140,000 square feet of floor space and with a combined volume of 4 million cubic feet. During the 1970s, Congébec acquired new buildings in the Quebec area, until “there was only us in Quebec, and there was not much to be done after that,” Mr. Pedneault said.

In the early 1980s, the company made its first foray into Montreal, at a time when interest rates on borrowing were reaching 16 per cent or even higher. “We were all but about one week or two weeks away from bankruptcy,” Mr. Pedneault said.

Congébec took control of the Montreal market at that time “through a major acquisition” of the Montreal facilities of the Associated Freezer Company. About two years later, however, AFC asked to buy those assets back. “So I sold them the company at a good price, and I went back to Quebec City, more or less in semi-retirement, but I was not yet 40,” Mr. Pedneault recalled.

A non-compete clause prevented him from re-entering the Montreal market for several years. But in the mid-1990s, he had chance to look at Montreal again. Congébec made its first new acquisition in Montreal in 1997. “Then we never stopped acquiring or installing ourselves into the Montreal market until in 2004 we had acquired the largest competitor,” he said.

That company was CFM, which had just built a facility, in several stages, that totalled 230,000 square feet. “And once we acquired this one, we were pretty well the king in Montreal, which position we retained ever since,” Mr. Pedneault said.

It was not until early 2011 that Congébec ventured beyond Quebec, with the opening of a 110,000 square foot warehouse near Toronto’s Pearson International Airport.

Along the way, Congébec also established its own fleet of temperature- controlled trucks, which mainly serve Quebec, as well “strategic alliances with major refrigerated transporters,” according to its website.

Until now, Congébec has specialized in the transportation and storage of frozen products, although not exclusively, Ms. Jura pointed out. The acquisition of Westco Multitemp means that Congébec can now expect to handle more ambient temperature products, such as spices.

“Westco was specialized in multi-temperature and had a lot of ambient rooms,” Ms. Jura said. “But I know that we’re considering changing some of those rooms into frozen spaces or refrigerated spaces.”