Directors' Report (2019 AGM)

April 25, 2019
Directors' Report (2019 AGM)
Your Board of Directors is pleased to report on the operations for Pembina Co-op.

The Vision, Mission and Values of Our Co-op

The board created the vision, mission and values of Pembina Co-op in 2014.  On March 7th, the board met with staff members and management to review Pembina Co-op’s vision, mission and values to determine if changes were necessary.  
The vision is a future-orientated statement that is designed to guide the organization for the next ten years.  Our vision statement for Pembina Co-op was:
“To be a Leader through Innovation and Superior Customer Service”
While the vision may have been accurate, it was not easy to remember and it did not identify a true purpose of our co-op.  After much discussion, we agreed that our vision for Pembina Co-op would become:
“Positively impacting our communities”
The mission statement is a succinct description of the fundamental purpose of an organization, describing why it exists and what it does to achieve its vision. Our mission statement was:
“To benefit members by progressively growing business and community through co-operative principles.”
Our group felt that the mission should be modified to reflect our purpose better and agreed on:
“To benefit the membership by growing business and community sustainably through co-operative principles”
The mission reflects that decisions are based on what is better for the membership as a whole, rather than a single member or group of members.  It was also important the growth was achieved through decisions that provided long term benefits and gave proper consideration to the effects on our environment.
The Co-op will continually work towards achieving its vision and mission through its corporate values.  Pembina Co-op’s corporate values are:
Integrity - Excellence - Responsibility.
The Board and Management continue to operate under the Retail Corporate Performance Management (CPM) system that has been developed by FCL. Through the CPM process, the Board identifies the long term goals of Pembina Co-op.  Management develops the strategies to achieve the goals and these strategies are incorporated into the Co-op’s annual business plan.  The budget is developed in accordance with the business plan and forms the basis to measure the performance of Pembina Co-op’s management and employees.  Rather than just being an annual plan, CPM focuses on longer term thinking and planning that will set the Co-op’s path for the next decade.

Financial Results

Pembina Co-op achieved another successful year in 2018.  Sales increased by $16.1 million to $149.8 million.  Pembina Co-op achieved a local savings of $1.47 million, a decrease of $1.20 million from last year.  FCL achieved a record year, resulting in a patronage refund of $7.78 million, which was $2.88 million higher than last year.  While the patronage refund was higher, the cash repayment portion was reduced from 90% to 80%.  The net savings before income taxes were $9.25 million compared to $7.57 million in 2017.  
Pembina Co-op’s balance sheet remains strong as member’s equity, reserves and retained savings total $66.4 million.  This represents 67.4% of the total assets compared to 67.1% last year.  Our equity ratio continues to be influenced by the large volume of members prepaying their spring crop input requirements.
Your Board has approved a patronage allocation of $4.50 million. The individual member’s allocation will be based on 2.0% of crop input purchases, 2.65% of fertilizer purchases, 1.0% of general merchandise purchases, 1.0% of project purchases, 0.75% of food purchases, 5.9% on clear petroleum purchases and 6.4% on dyed fuel purchases made during the 2018 fiscal year.  The remainder of the savings will be allocated to the Co-op’s reserves and to pay income taxes.
During the past year, the Board approved cash repayments totalling $3.99 million.  This included $606,000 submitted to Revenue Canada for withholding tax, $855,000 to members who qualified under the bylaws and a general repayment of $2.52 million.

Assets and Improvements

During 2018, the Co-op spent $1.17 million on new assets and sold $74,000 of older equipment.  
The capital projects included the renovation of the Swan Lake cardlock to access fuel off of the FCL corporate bulk plant, the lean on the Swan Lake fertilizer shed and numerous vehicles 
Pembina Co-op has several projects planned for the coming year including construction of a 8,000 tonne fertilizer shed at Notre Dame and a CPIC chemical warehouse at Baldur. The Co-op will purchase ten vehicles to replace older trucks and equipment within the fleet in addition to numerous smaller capital projects. Total capital projects are estimated at $3.8 million.

Community Builder

Pembina Co-op continues its support of the many community organizations throughout its trading area. Total donations over the past year were $70,000.  Our community support policy included the recognition of employee volunteer hours.  Employees received one ballot for each hour that they volunteered for a community organization or charity.  850 ballots representing 850 volunteer hours were entered into a draw whereby five names would be drawn and the winner would be able to direct a $1,000 donation towards their chosen group.  The winners were:
  • Melissa Brunel (Administration) → Altamont Curling Club
  • Luc Mangin (Bulk Petroleum) → Somerset Minor Hockey
  • Therese Caillier (St Leon Building Centre) → Playground Equipment @ St Leon
  • Amanda Wall (Manitou Hardware) → Manitou Arena
  • Riley McLaren (Swan Lake Agro) → Kinsmen Club

Board of Directors

In 2018, our Board held nine regular meetings.  The July meeting included a tour of the Co-op’s facilities in Homewood and Oakbank. Five directors attended the FCL Fall Conference in Winnipeg. Ken Harpelle, Kevin Cutting, Daniel Van De Velde and Barry Gosnell represented Pembina Co-op at the FCL Annual Meeting in Saskatoon.  Ken Harpelle continued to represent District 14 on the FCL Resolutions Committee.
The Board would like to extend its gratitude to Bob Smith who decided to retire from our board in January.  Bob represented the Souris trading area for 30 years and rarely missed a board meeting.    No director was ever prouder than Bob was the day we opened our new Souris Building Centre in 2017.
We would like to express our gratitude to the management and staff for their efforts during the past year.  Your extra effort resulted in another strong year. We appreciate your dedication in running our business.  We would also like to thank the members for their continued support in 2018.  By supporting a business you own, you benefit by sharing in the profits of the company, and your community benefits by maintaining a valuable service.

Your Board of Directors

  • Marc Grenier (President)
  • Kevin Cutting
  • Ken Harpelle (Vice President)
  • Bertrand De Rocquigny
  • Barry Gosnell (Secretary)
  • Ernest Fraser
  • Daniel Van De Velde
  • Daryl Devos