Murad Al-Katib, CEO of Regina-based Alliance Grain Traders, says his future lies in more packaging, canning, processing and branding of pulses.Troy Fleece/The Globe and Mail
On the flat prairie just east of Regina, the head office of Alliance Grain Traders Inc. rises like a bright-red island in a sea of mud and stubble.
Inside the corrugated-metal walls, Alliance's young chief executive officer, Murad Al-Katib, is crafting a vision that's every bit as eye-catching as the building he has put up. He aims to construct a global food powerhouse in the Canadian West based on lentils, chickpeas, peas and beans.
These once-lowly "pulse grains" are staple foods in fast-growing emerging markets such as India, China, and northern Africa, but, as crops, they flourish best in the dry, fertile soil of Saskatchewan.
"We can grow them here better than anywhere else in the world," says Mr. Al-Katib, 37, and already a 15-year veteran of global agribusiness.
This Saskatchewan advantage has powered Mr. Al-Katib's overnight rise as a player in world markets for the legume vegetables, which contain protein-rich kernels encased in their pods. Pulse crops have teamed up with the even more prevalent canola to end the rule of King Wheat, which had once dominated the Prairies.
Alliance, now the world's biggest lentil processor and exporter, is expected to gross $700-million in revenue this year from buying, selling and processing pulses. As head of an acquisition-minded company with a market capitalization of more than $500-million, the towering Mr. Al-Katib is bidding to become an agribusiness giant in more ways than one.
"Some in the industry may be jealous of him, but he took the risk, so good on him," says Murray Purcell, a lentil and grain farmer near Saskatoon who is a supplier to Alliance and chairman of the Saskatchewan Pulse Growers. "He's going to bring good things to growers."
Mr. Al-Katib has capitalized on the fact that as crop gluts and competition forced Saskatchewan farmers to diversify beyond cereals, they turned increasingly to alternative crops - canola and, to a lesser extent, the highly profitable pulses, used in foods from pasta to hummus and soups. (The name is a variation on the Latin puls, for thick soup.) Pulses have emerged as a $2-billion export business in a province where, 20 years ago, few were grown. They also offer a measure of marketing choice to those growers who feel shackled by the monopoly status of the Canadian Wheat Board, which trades the West's major cereal grains.
"These pulses are cash crops that are not centrally controlled by the board - they are freely marketed," Mr. Al-Katib says.
What's more, they are a handy weapon in farmers' crop rotation arsenal. By alternating these cash crops with wheat and canola, farmers minimize the need to leave land fallow in summer. Pulses replenish nitrogen in the soil naturally, rather than using it up, and they grow well in dry conditions.
But the challenge is adding value to the output of the 18,000 pulse growers in the province. That is where Mr. Al-Katib and other processors come in. In his Regina plant, which processes the widely used red lentils, "we peel the skin off each kernel, split it in half, and polish it with canola oil and water, and package it and send it to the world," he says.
About 35 to 40 per cent of the world's lentil trade passes though Mr. Al-Katib's hands in one way or another. In total, Canadian pulse production exceeds five million tonnes a year - up from 250,000 tonnes in 1985 -and most of it comes from Saskatchewan.
Mr. Al-Katib, with his global business savoir faire, exudes an exotic air, but he is just as Saskatchewanian as curling and Tommy Douglas. A son of a Turkish-Canadian family, he was born and raised in Davidson, Sask., where his father was the town doctor and his mother was the mayor for a time.
Pulses didn't always make his heart beat faster. With a commerce degree from University of Saskatchewan and an MBA from the Thunderbird School of Global Management in Phoenix, he thought he would end up on Wall Street. But he wrote a fateful letter in the mid-1990s to Roy Romanow urging the then-NDP premier to build a trade promotion presence in emerging markets.
Mr. Romanow invited him to join that effort and, as a 25-year-old, he was selling Saskatchewan crops to places like India, China and Bangladesh. After seven years in government, he conjured up the idea of becoming a value-added trader and processor of pulses. A Turkish family, the Arslans, invested $1.5-million in his newly formed Saskcan Pulse Trading Inc.
Nine years later, Saskcan has evolved into a global business, now called Alliance, that operates 21 factories in Canada, Turkey, Australia and the United States, but earns 60 per cent of its revenues in Canada through its Saskcan operations. The Arslans own almost 30 per cent and Mr. Al-Katib, 2 per cent The timing is right for his big idea, Mr. Al-Katib says. Pulse production is declining in the very countries that consume the most and where population is growing the fastest. As producers, many countries in Africa and Asia have trouble coping with seed diseases, and there is little plant research.
Contrast this to his home province, where University of Saskatchewan's Crop Development Centre has developed shorter-maturing strains suited to the Western Canadian growing season.
He says his future lies in pushing up the value chain, which means more packaging, canning, processing and branding of pulses. He talks of turning green lentils into his own pasta, and buying chickpeas from farmers for his own hummus production.
Regina, hummus capital of the world? Don't underestimate the vision of Mr. Al-Katib, whose finger is on the pulse of world food trade.
"I'm not an ag guy, I'm a risk manager," he explains. "This business is all about emerging markets, market development and risk management. We're dealing in countries that once were not familiar to Saskatchewan exporters."