New York, NY
May 9,  2001

The Wall Street Transcript has published an in-depth interview with Brian Hayward, CEO of United Grain Growers (TSE:UGG), in which he talks at length about the company's future. 

The entire 2,500-word interview is available online at http://www.twst.com/info/info344.htm  

Hayward gives an overview of the company. "At the present time the company is structured around four main business operations. The first is selling fertilizer, seed and herbicides on a retail basis to farmers, essentially a distribution function. The second area is grain, where we own and operate (currently) at about 75 locations across all of western Canada. We're agents for The Canadian Wheat Board, and we also buy grain on the open market for end users of grain -- processors like ADM or ConAgra or for international export." 

Hayward explains, "From an EBIT point of view, in our most recent complete fiscal year, the crop input business produced just under 40% of our operating profit, and with grain accounting for a similar per cent. UGG's third business is livestock services -- which is primarily feed manufacturing. Last year Livestock Services business accounted for about 30% of our EBIT. Our fourth business is ag publishing, and it accounted for 2% of EBIT. We're the most significant publisher of farm media in this geographic area." 

Looking forward, Hayward states, "In UGG's case we've reduced our expense in real terms by about 20% over the last five years. Beyond this, I think the other issue that's apparent for Canada is there's a need for some form of consolidation within the industry. There are probably a few too many players. Some type of consolidation is inevitable and when it does happen, we plan on being part of it, to ramp up economy of scale into our operations by a quantum amount." 

This interview is part of a 25-page Agribusiness Issue available at http://www.twst.com/info/info344.htm or by calling 212/952-7433. 

Company news release
N3505