The story of Buhler Industries
Not your typical 20-something. Buhler Industries was created by John Buhler of East St. Paul, Manitoba. In 1956, when Buhler was 22, he borrowed the money to start his first business and began buying up troubled companies, which he refinanced and restructured.
The building of the Buhler empire:
In 1969, Buhler purchased the Standard Gas Engine Works, renaming it Farm King Ltd.
He acquired Standard Gas Engine Works in Morden, Manitoba and renamed it Farm King Limited in 1969. The company produced the Farm King line of grain augers, snowblowers, mowers and compact implements.
In 1981, he bought the Winnipeg factory of Allied Farm Equipment of Chicago.
Buhler Industries expanded in 1982 with the purchase of the Allied line of front-end loaders.
In 1994, he amalgamated all his companies under Buhler Industries and listed the company on the stock exchange.
Buhler acquired the Versatile Tractor division of New Holland Ag in the year 2000.
He also purchased the Versatile tractor plant with a $32-million government loan.
Enter the Russians. In 2007, Buhler sold 80.4 per cent of his shares in Buhler Industries to Rostselmash, the largest combine manufacturer in Russia for $145 million. The company experienced significant growth between 2008 and 2013 and acquired several companies including:
Redball in Minnesota
Feterl Manufacturing in South Dakota
Ezee-On in Vegreville, Alberta. (Vegreville is off of Highway 16 on the way to Edmonton. If you ever get the chance, stop in and check out its giant pysanka, a Ukrainian-style Easter egg).
A call for sanctions. In March 2014, there were calls for sanctions against several Russian members of Buhler’s board of directors because of Vladamir Putin’s actions in Crimea. These directors were Konstantin Babkin, Yury Ryazanov and Dmitry Udrasm, said to be members of Russia’s Action Party.
According to media reports, a video emerged from a rally in Moscow that shows Babkin publicly supporting Putin’s actions in Ukraine. No action was taken and no sanctions were placed on Buhler Industries or the board of directors.
The Russians gain more control. On December 22, 2021, Buhler and Highland Park Financial Inc., which he controls, sold their remaining 16.3 per cent interest in the company for $3.00 per share, or $12.3 million, according to financial statements filed by the company.
Rostselmash now owns 96.7 per cent of the shares in Buhler. The remaining shares are held by investors via the Toronto Stock Exchange
A controversial board member. Recently, Babkin, who was on the board of Buhler Industries, tweeted support of Putin’s recognition of the Donetsk and Luhansk People’s Republics (the Donbas area). These two regions broke away from Ukraine in 2014, and although they proclaimed themselves independent republics, they weren’t recognized by Russia until Feb. 21 of this year. When Putin did this, he basically killed what was the 2014-15 Minsk Protocol, a peace agreement of sorts, between the two Republics, the Ukraine and Russia.
Buhler Industries distances itself from Russia. Four days after Babkin’s tweet, when Russia invaded Ukraine, Buhler Industries sent out a press release saying they didn’t support Russia’s actions. Buhler Industries claims that although it is a majority-owned Russian company, it’s not a Russian company because its staff are Canadian and American.
The head office is in Winnipeg, so the company says most decisions are made in Canada. However, the Manitoba corporation registry records showed Babkin listed an address in Moscow, so did board chair Dmitry Udras, CEO Yury Ryazanov and director Oleg Gorbunov. The company has seven board positions.
Buhler Industries said it hasn’t exported products to Russia since 2019, and no longer does business in the country, however, a recent public financial statement told a different story—that it made $8.9 million in revenue from the Commonwealth of Independent States (CIS), which includes Russia. The CBC asked about this discrepancy last month, and Buhler Industries said that, actually, they did have a few small sales here and there of tractor parts in Russia, but that most of that CIS revenue came from Lithuania, Kazakhstan and Romania. But this doesn’t quite make sense because Lithuania and Romania aren’t part of the CIS.
Despite the scrutiny around Buhler Industries’ business ties with Russia, on Feb. 27, Babkin went on a Chinese state-owned television program and blamed the Russian attack on U.S. Interference. (In December, Russia demanded the U.S. and NATO cease all military activity in Eastern Europe and Central Asia; to commit against further NATO expansion toward Russia; and prevent Ukraine from joining NATO in the future.
The United States and NATO allies said no. And the U.S. went on to send military assistance to Ukraine by giving the country ammunition, arms, and various other defensive weaponry. Then in February, the U.S. sent 3,000 American troops to Poland and Romania, which border the Ukraine. Russia also claims that NATO said it wouldn’t expand east into former parts of the U.S.S.R., but academics say this isn’t true and is revisionist history on the part of Russia).
Babkin said the invasion would build a unified economic space in Ukraine for Russia.
Buhler Industries said it opposed Babkin’s comments. On Mar. 2, they put out a press release saying Babkin would be leaving the board.
A new company chair. They also announced the board’s chair, Dmitry Udras, was replaced by Canadian Grant Adolph, even though Udras would remain on the board as a director, as would Russian Oleg Gorbunov.
CEO Yury Ryazanov would also be staying on.
Political and business ties. Udras and Ryazanov continue to be on the federal council of the Babkin-led Action Party. Babkin, Udras and Ryazanov are also the co-owners of Novoe Sodrugestvo CJSC, a Russian conglomerate that owns 20 companies including Russian tractor maker Rostselmash and Selmashbank, a financial institution based in Rostov-on-Don in southern Russia.
Babkin’s board resignation did not impact his ownership stake in Buhler Industries, which is 97 per cent owned by Rostselmash.
Federal backing. Export Development Canada — a federal Crown credit corporation — signed a guarantee to back half of a $14-million loan to Buhler Industries in December 2020 to support the company’s ongoing operations. The agency backed the Buhler Industries loan to promote Canadian agriculture equipment exports and create domestic jobs.
No to Russia. EDC says it hasn’t been doing any business related to Russian contracts or Russian borrowers since 2014, when Russia annexed Crimea.
About 700 Canadian workers could lose their jobs if Buhler Industries loses the loan.