Detailed Version - UFA.com

The changes executed in the business really represent the start of a transformation of our business. Key areas
impacted in 2011 were:
Initiated four new Ag „concept stores‟ in Consort, Vulcan, Fairview and Drayton Valley. The business model in
these stores focuses on products that are core to Agricultural producers, and a more relevant in-store experience.
Organized a new AgriBusiness marketing team, with focus on planning and execution of tactics in specific
markets. In doing so, we have moved away from mass market tactics (flyers and general mail-outs) and
moved towards local and targeted marketing tools.
Consolidated the AgriBusiness logistics team into our Distribution Centre in Edmonton creating efficiencies for
our business
Completed planned changes to our Grain Marketing unit, which saw us execute an organized exit while
honouring all contracts and commitments that were in place
Significantly changed inventory management processes to focus on overall network logic to support local
needs. This was further supported by implementation of a hub & spoke system to assist in optimization.
In 2011 we entered into an agreement with AGRI-TREND to strengthen our ability to provide timely and relevant
agronomic information and advice to our members and customers. This expertise will be of strategic importance as
the AgriBusiness continues to progress.
As we move forward in 2012 we will continue to focus on executing the fundamentals of our business, and to
strengthen our relationship with owners and customers in all markets. Based on the success we saw in 2011, we
will transition four existing farm and ranch supply stores to the Ag Concept store model and introduce new
strategic initiatives for other specific markets. We will also further develop and implement the first stages of our
Crop Inputs and Livestock strategies and will develop our e-commerce capabilities as a critical element of
our co-operative.
Petroleum
UFA‟s Petroleum division had another year of outstanding financial performance in 2011, while focused on
excellence in delivering a broad range of products and services through our network of 113 locations.
The year was marked by a number of supply challenges as Edmonton refiners struggled to meet anticipated
production levels at various times of the year. This was especially acute in the fourth quarter, where two refineries
were simultaneously impacted, leading to supply disruptions.
During these times of supply disruptions, UFA is able to mitigate some of the impact as a result of having multiple
agreements with domestic refiners, and a developed capability to import product. In the fourth quarter of 2011
there was insufficient product available in Western Canada and the US mid-continent to meet demand. As a result,
many retail and cardlock operations throughout the industry suffered run-outs or were operating on restricted
hours. UFA was certainly not immune to this situation. Supply agreements were optimized to the extent possible.
In addition, product was imported from off-shore through a west coast terminal and transported by rail for delivery
into our Alberta network.
We continue to benefit from our extensive agency network that is firmly entrenched within local communities. Our
Agents and their ongoing relationship with our members and customers, along with their passion to service their
needs, are critical to maintain and grow our sales and to promote loyalty to the co-operative. 2011 saw a number
of changes to our network with retirements of some of our long-term Agent partners. In each case, the retiring
agent played an important role to ensure a seamless transition to the new agent, in order to ensure continued high
levels of service for our members and customers.
8 PRESIDENT AND CEO‟S MESSAGE
UFA 2011 Unabridged Annual Report 8