Ceres Global Ag Corp. (CRP) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Welcome. I am Robert Day, President and CEO of Ceres Global. As you are aware, for the second year in a row, this is a virtual meeting. In light of the ongoing public health impact of the COVID-19 pandemic and to mitigate risks to the health and safety of our communities, shareholders, employees and other stakeholders, Ceres Global has decided that this virtual-only format is the safest method of hosting this meeting while still allowing us to reach the greatest number of our shareholders possible. We thank you for joining us. Before turning the meeting over to the Chairman for formal business of this Annual Meeting of Shareholders, I will provide you with the following cautionary statement regarding forward-looking information. In the course of today's meeting, representatives of Ceres Global may in our remarks or in response to questions, make certain statements which are forward-looking statements and provide certain information, which is forward-looking information. These forward-looking statements and forward-looking information are prospective. Forward-looking statements and forward-looking information are neither promises nor guarantees, but are subject to risks and uncertainties that may cause the actual results, performance or achievements of Ceres Global or developments in Ceres Global's business or its industry to differ materially from the anticipated results, performance, achievements or developments expressed or implied by such forward-looking statements. Undue reliance should not be placed on forward-looking statements and forward-looking information. A more detailed discussion of these and important risk factors can be found in our most recent annual information form dated September 10, 2021, and management's discussion and analysis for the 12-month period ended June 30, 2021, both of which are available under our corporate profile on SEDAR at sedar.com. Thank you. I will now turn the meeting over to Douglas Speers, Chair of the Board.

Thank you, Robert, and Good morning, ladies and gentlemen. Welcome to the 2021 Annual Meeting of the Shareholders of Ceres Global. My name is Douglas Speers, I am Chairman of the Board of Directors of Ceres Global. Before proceeding with the business of the meeting, I would like to take this opportunity to introduce the directors and officers of Ceres Global. First of all, as you've already met, Robert Day is our President, CEO and also is the Director of the Corporation. Our fellow directors are Harvey Joel, Gary Mize, David Rotenberg and James Vanasek. In terms of our management team, Just Bierley is our Vice President and CFO; Carlos Paz is Vice President and Commercial Director; Glen Goldman is Vice President, General Counsel and Corporate Secretary; Sarah Blomquist, Vice President of Human Resources and Corporate Administration; Patrick Gathman, Vice President of Operations; and Dusty Clevenger, Vice President of Strategy and Business Development. We have 3 matters of business to conduct today: First, to present the audited financial statements of Ceres Global for the financial year ended June 30, 2021. And along with that is the auditor's report. Second, to elect directors. And third, to appoint Baker Tilly WM LLP as the auditors of Ceres Global. Once the formal business of the meeting has been completed, Ceres Global Management will provide a management presentation and will be available to answer questions from shareholders. I will now call the meeting to order. I will preside as Chair of the meeting, and I ask that Robert Day act as Secretary of the meeting. Unless there is an objection, I shall appoint AST Trust Company, Canada, to act as scrutineer for the meeting through its representatives, Helen Kim and Megan Rocha. The Secretary has advised me that the notice calling this meeting, together with a form of proxy and management information circular and the financial statements of Ceres Global for the financial year ended on June 30, 2021, as well as the auditor's report have been sent to each director of Ceres Global, the auditors of Ceres Global and each intermediary and registered holder of common shares of Ceres Global of record on September 16, 2021, the record date for the meeting. Additional copies of these materials are also available under our corporate profile on SEDAR at www.sedar.com. The scrutineers have provided me with the preliminary report regarding shareholder attendance at the meeting. The scrutineers report that there are present at this meeting in person or by proxy, 18 shareholders holding 19,352,015 common shares of Ceres Global. Accordingly, I declare that the requisite quorum of shareholders is present, and I declare that the meeting is duly and properly constituted for the transaction of business. I direct that the confirmation of mailing of the notice of the meeting received by AST Trust Company, Canada, and the scrutineer's complete report on the attendance be annexed to the minutes of this meeting. There are several matters that must be dealt with during this formal part of the meeting. In order to expedite these matters, I have requested that certain persons make and second the formal motions, and I will call on these persons at the appropriate time. Given the virtual format of today's meeting, we request that registered shareholders and duly appointed proxy holders who have specific comments or questions on a formal item of business make such written submissions now by clicking on the messaging icon, typing in and submitting their question. Please clearly identify the applicable item of formal business to which your comment or question relates. During the course of this meeting, at the appropriate time, such questions will be addressed. Following the formal meeting, we will have a question-and-answer session. If you have any questions not specifically related to an item of formal business to be discussed at today's meeting, please feel free to submit those questions at any time during the meeting, and we will do our best to ensure that such questions are addressed at the conclusion of the meeting. We will do our best to answer all questions. But if for any reason, we are unable to do so during the meeting, we will endeavor to follow-up after the meeting, if you have provided your contact information along with the question. Given that this is a virtual meeting, voting will be conducted by online ballot for all matters. If as a registered shareholder or a duly appointed proxy holder, you are using your control number to log into the meeting, and you accept the terms and conditions, you will be provided with the opportunity to vote by online ballot. I should mention that if you have already voted by proxy and you vote again during the online ballot during the meeting, your online vote during the meeting will revoke your previously submitted proxy. If you have already voted by proxy and do not wish to revoke your previously submitted proxy, do not vote again during the online ballot. The polls will be open for all items of business to be voted on at the same time. This will allow you to vote on each item immediately or if you prefer, you may wait until the conclusion of discussion on each item prior to casting your vote. Once the polls have been opened, the items of business to be voted on and your available voting options will be visible on the voting panel on your screen. To submit a vote, please click on the voting choice displayed on your screen. Once discussion has concluded on all items of business, the polls will close. The preliminary results of the votes on each matter will be announced prior to the close of the meeting. I now declare the polls open on all items of business. The first item of business is the presentation of Ceres Global's consolidated financial statements for the year ended June 30, 2021, along with the auditor's report, both of which have been previously sent to the shareholders of the corporation. Unless there is an objection, I will dispense with the reading of the auditor's report to the meeting. We will now proceed with the election of directors. The number of directors to be elected at the meeting is 5. I will ask someone to nominate each of the nominees listed in the management information circular delivered with the notice of this meeting.

I nominate those persons specified in the management information circular delivered with the notice of meeting, namely Robert Day, Harvey Joel, Gary Mize, James Vanasek and David Rotenberg to serve as directors of Ceres Global, to hold office until the next Annual Meeting of Shareholders or until their successors are duly elected or appointed in accordance with the articles and bylaws of the corporation.

Thank you. Mr. Day, have any nominations, any questions or any comments come in from shareholders specifically on this item?

Mr. Chairman, I confirm that we have not received any nomination, questions or comments from shareholders, specifically relating to the election of directors.

Thank you. I can now declare the nominations closed. In order for each of the nominees to be elected, he must obtain a majority of the votes cast at this meeting. The election of directors will be conducted by online ballot. As noted, if you have previously submitted a completed proxy and you vote again during the online ballot during the meeting, your online vote during the meeting will revoke your previously submitted proxy. If you have already voted by proxy and do not wish to revoke your previously submitted proxy, please do not vote again during the online ballot.

I would ask that all registered shareholders and duly appointed proxy holders complete the online ballot now by selecting the applicable voting options on the voting panel displayed on their screens. Please complete the online ballot by selecting the applicable voting options on the voting panel displayed on your screens.

Thank you. The preliminary results of the vote with respect to the election of directors will be announced prior to the close of the meeting once the polls have been closed. We will now proceed with the appointment and remuneration of the auditors of Ceres Global. May I have a motion that Baker Tilly WM LLP be appointed as auditors of Ceres Global until the next Annual Meeting of Shareholders or until a successor is appointed and that the Board of Directors are authorized to fix the auditor's remuneration.

I so move.

May I have the motion seconded?

I second the motion.

Mr. Day, have any questions or comments come in from shareholders specifically on this item?

Mr. Chairman, I confirm that we have not received any questions or comments from shareholders, specifically relating to the appointment and remuneration of auditors.

The appointment of auditors will be conducted by online ballot. As noted, if you have previously submitted a completed proxy and you vote again during the online ballot vote during the meeting will revoke your previously submitted proxy. If you have already voted by proxy and do not wish to revoke your previously submitted proxy, please do not vote again during the online ballot.

I would ask that all registered shareholders and duly appointed proxy holders complete the online ballot by selecting the applicable voting options on the voting panel displayed on their screens. Please complete the online ballot now by selecting the applicable voting options on the voting panel displayed on your screens.

The preliminary results of the vote with respect to the appointment of auditors will be announced prior to the close of the meeting once the polls have been closed. Mr. Day, have any other formal business come in, in from shareholders that may be properly brought before this meeting.

Mr. Chairman, I confirm that we have not received any questions or comments from shareholders, specifically relating to the appointment and remuneration of auditors.

Thank you. As there is no further business, I now declare the polls closed. So based on the preliminary voting results with respect to the election of directors, the motion has been carried, and I therefore declare that those individuals nominated are elected as directors of Ceres Global. With respect to the appointment and remuneration of the auditors, the motion has been carried, and I therefore declare that Baker Tilly WM LLP is appointed as auditor of Ceres Global until the next Annual Meeting of the Shareholders or until a successor is appointed and that the Board of Directors is authorized to fix the auditor's remuneration. The final report of voting results will be made available following the meeting under our corporate profile on SEDAR. As I mentioned earlier, that's www.sedar.com. Ladies and gentlemen, this concludes the formal business brought before the meeting. I wish to thank you for attending, and I now declare this meeting to be terminated. At this time, I will now ask our management team to make a presentation on the developments at Ceres Global. Following the presentation, we will provide an opportunity for questions from our shareholders.

Thank you, Doug, and thank you, everyone, for joining us today, and welcome. Thanks for taking some time to learn more about Ceres and what we're doing and what we have planned for 2022. Let me start by going to the fifth page in the presentation. And just a reminder to everyone that this will be posted on our website and available for you at a later date. To begin, Ceres is a market leader in our core products, so our core products being oats, durum and spring wheat. We are market leaders in those positions in North America, and we'll talk a lot more about that here in just a few minutes. We have a significantly improved financial situation coming out of a 5-year turnaround and really starting up and developing the Northgate site, a very unique location. And we have an asset position in the upper Midwestern part of the United States and Western Canada that's very unique, and it really puts us in a strong position to execute on our strategy. At a very high level, we connect farmers and other suppliers to customers around the world. Our position is unique. There's really no other company today that is able to diversely originate from both the U.S. and Canada. And that, combined with our terminal asset base and infrastructure, we're able to connect our suppliers to our customers in a unique way and a more efficient way. That's important for low cost. It's important for logistics efficiency and it's true to our customer, especially in the area of identity-preserved supply chain solutions. At our core and really at a high level, Ceres is an enabler. Our job is to connect suppliers with our customers so that our customers in the food, ag and energy space can do great things in those markets. We add value across the agricultural, energy and industrial supply chains through 4 complementary business segments that I'll talk more about in just a little bit. Recently, we went over 200 employees. And last year, we had -- we generated around $50 million in gross margins, and we're on pace this year to significantly exceed that. Moving on to our business segments. Today, we're quite heavily weighted to the segments on the left. So our core agricultural commodities and our complementary agricultural commodities. As I said earlier, our core commodities are durum, high protein wheat and oats. With respect to those products, we are doing a lot of things for a lot of companies in North America. We are originating from both Canada and the United States. We're supplying U.S. customers and exporting product through U.S. gateways and also moving product directly by train into Mexico. The complementary ag commodities are different in that they could be a product that moves very efficiently through one location such as canola through Northgate or an example of a product that is more regional and doesn't rely on the broader Ceres network as much, but it's core to our business because of the presence we have in that region, and Ryan organics would be good examples of that. Today, these 2 segments make up about 80% of our gross margins. And our goal by 2025 is to move that to be more balanced between this area and value-added operations. So value-added operations around the ag area. Today, the examples of that in our business is soybean crush in Southern Manitoba and specialty crop blending, where we manufacture birdfeed in Southern Manitoba as well. And then we'll talk about the canola crush project that we have going on in Northgate, and the size and scale of that is really what's going to allow us to move to a more balanced business between Grain LLC merchandising and value-added operations. In addition, we have -- and we provide non-ag supply chain services. This is really specific to Northgate and the uniqueness of Northgate. Northgate is in Canada, but it's connected to the BNSF railroad in the United States. And that gives us an opportunity to provide logistics service and allow products to move more efficiently to the destinations than other locations can. We're handling natural gas liquids as we form the Gateway Energy Terminal with Steel Reef Infrastructure Corporation. We're handling lumber based products, fertilizer and other industrial products and really monetizing the unique value of Northgate. We will continue to do that. When we look back at our story and the history of what's happened, the turnaround has really gotten traction and it's -- and today, we really feel confident that the strategy that we have in place has really taken hold. The early years of this story were about really divesting unattractive assets and addressing legacy issues from our balance sheet as we confirmed the strategy. And really more recent years has been about adding key pieces through acquisition and expansion. Some examples of that are, in 2018, we acquired Nature's Organic Grist which was a very important addition to our value proposition to be able to provide organic products and not just conventional products for our core customers and our core products. In 2019, we formed Gateway Energy Terminal with Steel Reef Infrastructure Corporation, which really solidified our position in the natural gas space at Northgate and put us on a path towards growth. In 2019, we acquired Delmar Commodities in Southern Manitoba, which really allowed us to solidify that position we have along the border, originating product directly from Canadian growers and moving that product into the U.S. market. And it also allowed us to get into some of these other value-added businesses that we think is going to define our future going forward. In 2020, we acquired the Nicklen Siding Elevator at Ridgedale Saskatchewan from Cargill, which provided -- has provided a really core and key origination. And in 2021, we formed the joint venture with the co-op in Thief River Falls, Minnesota and are undergoing an expansion of their elevator so that we will have strategic origination of high protein wheat from growers there. We also increased the capacity of the soybean crush plant in Jordan, Manitoba, completing that just this last summer and adding 50% to the capacity of that, and there's a lot more to come as we continue with our growth. As you can see, the trend has been very, very favorable. We're off to an incredibly strong start this year, achieving $15 million in EBITDA after the first quarter. The other thing I just want to mention is that we have also recognized some of the deferred tax assets on our balance sheet. We recognize those at the end of the 2021 year. We still have a significant amount of assets there, around $60 million in net operating loss carry forwards that have a deferred tax asset value of around $12 million to $13 million that's still yet to be recognized. So looking back at 2021, and these are the 7 objectives that we talked about last year at this meeting. And so let's take a look at how we did. Goal #1 was to maintain the trajectory of improved financial results, and we've been able to do that and get started in this fiscal year in a very strong way. Second one was to organically grow and successfully integrate the Delmar acquisition and the Nicklen Siding acquisition. And these are 2 huge areas of success for our company. Those assets and the people that came with those assets and those businesses are part of the Ceres family today, and they are key and core to our business, and that's gone extremely well. We're very fortunate to have added the talent that came with acquiring those businesses. Third one, to execute on the joint venture project. That's the Thief River Falls joint venture that we formed and developed at least one more grower origination asset. This one gets kind of an asterixis. Thief River Falls acquisition was completed. Expansion project is on time and on budget. So we're very happy about the progress there. We struggle to find another grower origination asset, and it's not easy in this environment to find assets for sale. Unfortunately, building new assets is very costly and tough to justify. This deserves an asterixis because we also did identify the canola crush opportunity in the project, and that really doesn't show up anywhere on these 7 objectives. We were just initially taking a look at it last year, and that emerged very quickly as a truly transformational project that we'll talk more about. Fourth one, to identify incremental efficiency improvements and expansion, investment opportunities inside the existing business. As I mentioned earlier, we completed the soybean crush expansion on time and on budget. We've done some things at Northgate and some other things in the other Delmar elevators to improve the efficiency and effectiveness. And so that one has gone quite well. The fifth one to institutionalize our account management process. And really, this is all about bringing unique solutions to our customers. There are a lot of good things going on in this area due to the confidentiality, specifically requested by our customers, we can't say a lot about this. But there are some interesting things going on today that we're able to provide through our network that we wouldn't have been able to do just a few years ago. One good example is we have a customer that's looking for us to work with growers to grow specific seed hybrids because those hybrids are more effective for them in their business and their process. We move those seeds through our network to our customer. In addition, we're doing a lot in the area of just in time with inventory. Our -- many of our customers don't have the infrastructure in their destinations to provide them with the flexibility they need. And so they rely on Ceres to create that flexibility for them and we work closely to do that. Number 6, explore ways to maximize the potential and profitability of the Gateway Energy Terminal. If you remember, a year ago, oil prices were quite -- crude oil prices were significantly below where they are today. Overall activity and volumes in the region were down a lot. And so we've been able to make up for the lack of volume through railcar storage, moving into more butane, whereas previously it was primarily propane and working closely with Steel Reef to find available supply to move through the location and essentially done a nice job this year. Today, the outlook is a bit different. Crude oil prices have increased, and we're starting to see an increase in volumes. And then lastly, and perhaps most important, is to develop and retain talent. This is really key for our core strategy. And I think that the work that we did to build the team that we have, we're being rewarded for, as we look at the canola crush expansion or the canola crush project. This is a big undertaking. Again, we'll talk about that in just a second. We couldn't do the things that we're doing today without having had some vision for the talent that we would need in the company as we become a bigger organization. We've built the executive team with the ability to grow. We've added a significant amount of other talent in the commercial and administrative areas and operations areas to be able to grow and execute on our strategy. And so really, from a talent perspective, today, there's nothing that's holding us back. So when we look at the year overall, we're pleased with what we've accomplished, and we will continue to set aggressive goals, and we'll talk about what those are for 2022 in just a bit. When you look at our grain merchandising business overall, I think the first thing to notice here is when you look at the top of this map, in the circles that we have, are now Ceres logos in 4 out of those 6 circles. So that's a lot of progress. When we started with our strategy, we had only one, and that was the one at Northgate. And so we've done -- we've come a long way in terms of being able to originate product directly from growers. That allows us to get a lot more value out of our terminal asset infrastructure and really to be able to provide low-cost and value-added solutions to our customers. As we go forward, we are committed to adding Ceres assets in the circles where we don't have one today and perhaps more than one. Our objective with nuances to each one of these is to be #1 in North America in durum, oats and high-protein wheat. We don't necessarily want to be all things to all destinations and gateways. But for the most part, we want to be the strongest company in North America in those areas. And we want to maximize other ag-related business opportunities in those areas where we're originating products and we have market presence. In short, we can be the bigger fish in the smaller pond. And when it comes to these products and this strategy, we can compete on size and scale with companies that are bigger than we are, and that's important for both cost and also to be able to provide that unique set of solutions that our customers are looking for. Moving on to the -- a little update on our soybean crush operation in Jordan and the non-ag supply chain services. The picture in the upper right is of the soybean crush plant in Southern Manitoba. We added 50% to the capacity of that plant, and we are the largest soybean crush business in Manitoba. That's exciting because overall oilseed crush prospects and margins look very attractive. And the Manitoba market is an attractive market where we can really provide some unique solutions for customers there. In addition, and we'll talk about this in a second, the value of vegetable oil and soybean oil in this case is quite a lot higher than it was a year ago. And structurally, we don't think that's going to change as the renewable fuel sector continues to build capacity and increase demand for vegetable oil. So we're really excited about the prospects of that business. And then the Supply Chain Services business and the picture on the left is that of oriented strand board, packaged oriented strand board getting loaded onto railcars at Northgate. And again, it's just an example of how we are monetizing the unique aspects of that location to provide a supply chain solution for a customer in that space, and it's a good example of what we also do with propane, what we're doing with fertilizer and what we're doing with chemicals and other industrial products. Now on to the canola crush project and the overview. This is a really exciting area, and it's really brought on by the emergence of renewable diesel as a fuel and a greenhouse gas emission solution for states in the United States and countries around the world. As I mentioned earlier, at about this time last year, we were really starting to investigate this. We have a board member who had some insights about the development of this industry and challenged management to see if there's an opportunity for Ceres to get into the supply chain and the growth that would be coming. And at that time, really, I don't think most players in the market had a good sense for really how impactful this could be. This is a big deal. Renewable diesel is different from biodiesel. Biodiesel is an inferior product that's been around for a while, about 15 years or so and biodiesel needs to be blended in with conventional diesel and it can really only get up to about a 20% blend into the fuel. Renewable diesel on the other hand is a newer technology, and it produces a far superior product. In fact, renewable diesel can 100% replace diesel and its functionality is just as good, and in some cases its better depending on climate. This product is getting a lot of support from different government entities and there are government programs to support this. I'm sure everyone has seen the attention that's given to a climate change and it's more than talk today, and we're seeing real policy and real commitments made to change the impact that we're having on our climate. Renewable diesel is considered to be an important part of that solution for certain geographies. So as a greenhouse gas emission problem, it can solve, it being a 100% replacement for diesel, it can have a much bigger impact than biodiesel. And for that reason, we are seeing these government subsidy programs. We've seen a significant commitment from the energy sector to build renewable diesel capacity. And one of the realities of this is its renewable diesel capacity can be built at a faster pace than oilseed crush capacity. And I think we don't think the market fully appreciated that when all of this started, but it's realizing that today. So the net impact of that is that vegetable oil is one of the primary rough feedstocks that's used to make renewable diesel. As renewable diesel capacity gets built, the demand for vegetable oil continues to increase. And so the structural value of vegetable oil has changed, and it looks to be changed for quite some time. The chart in the lower left of the slide is -- comes from the Jacobson Group, and it's the way they forecast canola crush margins, you can see what the historical margins have been, you can see where they are today and what they forecast going forward. And this is really driven by oil and the value of oil. And one thing that makes canola crush so attractive relative to soy crush is that canola has more than twice as much oil in the seed as soy does. So if oil is driving the margin, canola has twice as much as soy. Canola crush margins are expected to be superior to soy crush margins. When it comes to our project at Northgate, the lower right-hand is a visual of that and what we expect that will look like. We are well suited as a location for our canola crush plant. We always believe that, and we've been talking about it for the last 5 years. With the emergence of renewable diesel and the need to really put a stake in the ground, the sense of urgency was there for us to do this now. We've advanced very quickly on the project. We placed an order and made down payments for key equipment. We've -- our studies on site are nearly completed and our full engineering is underway. So we will break ground in the spring of 2022 and the plant is supposed to be online during the last half of 2024. So stepping back and looking at 2022, what our strategic initiatives and tactics are, and we would put those into 3 buckets. So continue to expand our grain origination, continue to develop value-added offerings for our key customers and successfully advance canola crush project at Northgate. When we look at grain origination, we -- as I said earlier, we need more direct access to growers and that can come in the form of acquisitions. It can come in the form of joint ventures. It can come in the form of long-term partnerships and agreements. We need to get more access to growers so we can do the things for our customers that they're asking us to do and so that we can fully utilize the value of our terminal asset infrastructure. With respect to value-added offerings for our customers, again, this is institutionalizing the strategic account management process, continuing to develop solutions like the seeds, hybrid-specific and just-in-time logistics examples I gave, we are getting a lot of requests and interest in the sustainability and traceability areas. And we need to be able to identify how technology can help us be -- how we can utilize technology as part of the overall solution. In addition, we'll be looking to do more concrete things that just provide more value to our customers in the marketplace. First stage processing, cleaning and packaging organics, bagging in the oat space. These are all things that the market needs in the areas that we serve and we are focused on getting that done. We can never lose sight of doing the basics extremely well, providing competitive prices, reliable logistics, high-quality products and services. And by doing that, it creates the foundation needed to move up the value chain and add greater value to our customers. And then when it comes to the canola crush project. So this is a very high-level timeline and certainly there's a lot more detail that goes into this. As I mentioned, recently, we ordered equipment. We hired an engineering firm. We are right now in the process of selecting strategic equity partners for the project. And then we will be able to finalize the plant design and capacities. In 2022, this is really going to be about some civil engineering work, obtaining all of our permitting and beginning construction. It also -- it will take time for the major equipment to arrive. There is -- with all of the demand for oilseed crush capacity around the world, the lead time on major equipment is longer than it had been historically. But essentially, 2023 then will be occupied by the construction process itself with the expectation that we will complete the construction in mid-2024. So in summary, our goals for 2022 are the following 7. One is to operate safely, to be best in class. We expect our reportable injury frequency rate to be below 2.0 and our disability frequency rate to be below 0.2. There's been a tremendous amount of effort over the last several years to, more than anything else, homogenize the safety culture across the organization and our teams have been extremely focused on that, and we are in a great place as far as safety goes. Number 2 is to, again, retain and attract the talent by being the most preferred place to work in the industry. We've had very high engagement scores, but we do not take anything for granted, and we continue to ask our employees for feedback to make sure that this is the place where people want to work. Having the best people is what's going to allow us to be the most successful. 3, to maintain the trajectory of improved financial results. And that just validates our credibility as a company and our strategy. Number 4, identify opportunities to acquire and/or utilize grower origination assets. So we talked about that previously. We want to fill in those unfilled circles that we still have on the map and be able to buy more product directly from growers. Number 5, institutionalize the account management process and develop the supply chain solutions our customers are looking for. Number 6, identify opportunities to increase the Northgate non-ag business and profitability. There's still more there. The nice thing about that business is once you're serving a customer's needs, market trends will ebb and flow. But over time, the trend is for volumes to increase. And then lastly, to successfully advance the Northgate canola crush project and stay on the timeline that we're on, which is really key to the success of that. Last slide, just a picture of the leadership team. I think we have an ambitious strategy and plan, but we have the team that we need to execute on that plan. And this team is certainly bigger and broader than just the 7 people that you see here. But what you see with this group and others in the company is a very diverse background when it comes to experience in our industry. A lot of big company experience from the big companies in our space, a lot of broad geographical experience and a tremendous amount of oilseed crush and oilseed business experience, which is really critical for us to move along that path that we're on today and be more balanced between grain and oilseed merchandising and value-added operations and processing. So with that, I would like to open the call up to questions, if any shareholders or others on the call have a question.

Well, thanks, Bob. It's Doug here. I'll just jump in and say that was an excellent overview of Ceres strategy and the plans as we look forward for 2022 and beyond. So as you said, if there are any questions from anyone on the call, we'd be pleased to try and answer them.

Doug, this is Glen Goldman, General Counsel and Corporate Secretary. I do have one question from shareholder [ Thomas Burke ] [indiscernible] to congratulate us on our results, but notes that sometimes investors confront big disappointments with new large processing projects with execution snags in the plant-based protein processing stories. And the gist of his question is, what is different and more predictable with the canola project that we've discussed here on the call?

Well, first of all, thank you, Thomas. It's an excellent question and one that we've spent a lot of time thinking about and talking about. And I know, certainly at the Board level, but I know management has even spent more time thinking about the implications of your question. So Bob, I might just flip it back to you and you perhaps can shed a little more light on how we're thinking about that question. And you pointed out something that I think is key in all of this is that the crush business is not new to Ceres. It's not new to the management team, and we currently have a soybean crush plant in Manitoba, as you mentioned, Bob. And we've successfully had a 50% expansion, and we really tried to plan for any hiccups that might take place in that expansion, and we learned a lot, and we'll certainly apply the lessons that we learned to this larger project.

Thank you, Doug, and thank you, Thomas Burke, for your question. Absolutely. I think the experience and the team as it has been highlighted, it definitely mitigates some of the risk in a project like this, but certainly not all of the risk, and I think it's a really good question. Some other things that I would say mitigate our risk is that we have sought participation from outside experts in the areas where we felt that we didn't quite have enough ourselves. So we do have a team of people that really put us on a similar level to the larger companies that would be making an investment like this, making sure we have the expertise and the support we need so that we've just got the things that experts have learned along the way to not make mistakes. In addition, our project has got some advantages to it. So I think if you're going to build a canola crush plant today, most of the time, it's going to be built in a new area, and there are no existing relationships with growers in that area. That's not the case for us at Northgate. We have relationships with the growers that we need to originate canola for that plant. And so there's -- we're really hitting the ground running as far as that goes. In addition, because of the fact that we're directly connected to the BNSF railroad, our cost to get to the markets that we're serving is lower than our competitors. And so we've got a net cost advantage on the freight, which results in a net advantage in the crush margin. And that can make up for quite a lot as a business like this is getting up and started. The other is that we are pursuing strategic partners to provide the equity for this project. And that's not just to raise capital. If it was as simple as raising capital, that -- I wouldn't say that's easy, but that's not really the primary objective. The primary objective is to have an equity partner that brings some strategic value to the project. We don't have the answer on that yet. We're in the process of reviewing those. But what I can say about it is that all of the groups that we're talking to, they add value in the form of marketing our products, of getting our products to market. And that's where these kinds of things can be challenged as they get up and going, we're looking for a strategic partner that's going to help us with that part of the project. Ceres brings a lot of the operational knowhow. We have the relationship with the growers. We do understand the markets that we'd be serving, but we feel like with the right strategic equity partner, we can mitigate a lot of the risk in the project in the marketing side.

Thanks, Bob. And are there any other questions? We've asked Glen Goldman to bring the questions together as they come in and then share them with everyone. So I'll revert back to Glen. Are there any other questions, Glen?

Yes, Mr. Burke has a follow-up question, and then there's another question after his, but let's just start with Mr. Burke's follow-up. He asked that with all of this great news, are there plans to dial up the investor relations outreach. There's a lot of points that Ceres has been speaking to on the call today, food inflation, supply chain infrastructure, renewable energy and value-add food solutions, et cetera. Will there be more plans to reach out to investors on these topics?

Well, let me just comment on that. Thanks, Glen, and thanks again, Thomas, for your question. We -- at our most recent Board meeting, which was held last week, we discussed this very question and what we should be doing about it. We have a lot of very positive things taking place at Ceres. And we do have an obligation to share our story. Bob has put together a very comprehensive overview here today, which was, I think, quite complete. And I know the Board will be dealing with this as we move forward in the next year. I may caution you, however, that in the very near future, we're still a small company, and we have a lot on our platter in the next few months. So you're probably not going to hear too much on the shareholder piece as we deal with this huge project that we're putting in place at Northgate. But definitely, it is something we've talked about. It's on our radar and the Board of Directors, along with management, will be formulating a strategy as we move forward.

Bob, did you have anything to add to Doug's answer?

I guess that what I would add is that we will have -- we anticipate having some very significant and meaningful milestones as we go forward with this project and with other things in the business. And we will -- we have discussed, and as part of the management, business plan is to be as effective as we can in getting those milestones and the achievement of those milestones out to the market. So we will be utilizing social media to do that. And I think that we expect to have milestones that are perhaps more significant than some of the ones that we've had in the past.

Thanks, Bob. Our next question comes from [ Josh Slack ]. Mr. Slack asks, are we able to announce who the engineering firm is for the canola crush project? And if it helps, Bob, I might add a little bit of a 2 cents here and then turn it over to you, which is that I don't believe we've made a final selection, although we are close to it, but we are subject to certain nondisclosure agreements with the firms that we are speaking with. But that said, let me turn it over to you.

Yes. Thanks, Glen. And that's right. We are really close. I think what we are committed to doing is providing that information to the market as its happening. So there's the engineering firm as well the construction firm. There's been quite a lot of engagement in that area, and we will announce those developments as they happen. And as Glen said, we're very close on the engineering firm side.

Okay. I'll thank Thomas Burke again because he submitted an offer to help weigh in on Investor Relations ideas if he can be of help. And my suggestion, Mr. Burke, is to send your contact information to us, and we can discuss that offline.

Okay. Glen, any other questions?

At this time, I'm not seeing any further questions.

Well, thank you very much. And I should just mention, a big word of thanks goes out to Glen and Sarah and other members of the management team as a lot of work goes into preparing -- not only preparing for the meeting, but making sure that it all works well and without too many glitches. And hopefully you found it to be satisfactory from your end. So ladies and gentlemen, if there are no further questions, on behalf of all the members of the Board of Directors of Ceres Global Ag, I want to thank you for joining us today. We look forward to the developments within Ceres Ag over the next year. And certainly we look forward to your attendance again at next year's Annual General Meeting. So with that, we will sign off and just say a big thank you to everyone.