Producer-controlled leader in seed processing
by Mark Cardwell

François Tétreault is the first to admit he's biased. But he's convinced that the farmlands in and around St-Pie-de-Bagot are the best and most fertile in all of Quebec. "The soil's rich, the land's flat and there are no rocks," says the native of the rural hub 25 km south of St-Hyacinthe, in the heart of the farm-filled Montérégie region. "Growing conditions here are perfect."

Hometown pride aside, it's hard to argue with success. Over the past 16 years, the soil around St-Pie has helped Tétreault, his cousin Jean, and a half-dozen local investors build the largest seed production and processing business in Quebec and, at the same time, create a unique value chain for crop producers across the province.

Les Grains Semtech Inc. owns and operates two processing plants on the outskirts of St-Pie, near the town's industrial park. Joined by a small office building, the plants receive, clean, separate and grade thousands of tonnes of genetically modified and non-genetically modified seed using state-of-the-art equipment. In particular, the company processes, dries and stores grain corn, soybeans, small grains, and cranberry beans, which are part of the kidney bean family.

In addition to the commercialization and transport of local feed grains (particularly corn, soybeans and small grains), Semtech also produces, distributes and exports seed wheat, barley and oats in pedigreed categories, as well as cranberry beans, identity preserved (IP) soybeans and small grains to Europe, Asia and the United States. The latter are produced, on contract, by about 150 growers across Quebec.

"We're very proud of what we've done," says Tétreault, the company's president and general manager. "We've invested and innovated a lot over the years."

In many ways, Semtech is as much a family affair as it is a shining example of a producer-owned company controlling more of the value chain and getting closer to end-use customers. After taking over their respective families' farms in the early 1980s, François and Jean Tétreault pooled their resources and converted their lands from commercial crop production to seed growing - soybeans, wheat, barley and oats - under contract.

With the financial backing and expertise of a few close friends in the farming industry, the cousins decided to strike out on their own in 1990, when they founded Semtech. "Sure there was risk involved," recalls Tétreault. "But we knew people who knew the industry, and we saw some opportunities we thought we could exploit."

One was the growing demand for cranberry beans. In some countries in the Mediterranean basin, they are a popular source of inexpensive vegetable protein. At its inception, Semtech was only the second Quebec company to grow - and provide contracts to grow - the edible bean. Since then, it has developed a network of about 20 growers who produce roughly 2,500 tonnes of the specialty crop a year, about a third of which is produced on the Tétreaults' farms.

"It's a nice niche market," says Tétreault, who estimated that the value-added crop, which currently sells for around $600 a tonne, represents about 20 per cent of the material processed at Semtech's cleaning plants. "It's also an interesting opportunity for Quebec producers."

The same holds true, he adds, concerning production of the company's main breadwinner activity: the production, cleaning and processing of soybean seeds for the major companies. "We've worked hard and invested a lot of time and money,"Tétreault says.

In particular, he credits innovations like the half-milliondollar purchase in 2002 of two robotic bagging and palletizing systems - a first in the Quebec seed industry - and the development of a second, high-tech processing plant for non-GMO, IP soybean seeds for the company's success in the soybean field.

"It's paid off with some beautiful contracts," Tétreault says.

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