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24-06-2014, 10:40 PM
Mitsubishi buys into Olam grain operations
THE AUSTRALIAN JUNE 25, 2014 12:00AM
Andrew White
Associate Editor
Sydney
THE Asian food bowl theme is sometimes overstated, but it remains a potent lure for international operators to the Australian market, as highlighted by Mitsubishi’s decision to take a majority stake in Olam International’s local grain-handling operations.
The giant Japanese conglomerate is investing $US64 million ($68.1m) to take 80 per cent of Olam Grains Australia as a precursor to further expansion of the venture on Australia’s eastern seaboard.
The deal includes 12.5 per cent of the 32.5 per cent OGA holds in the Newcastle Agri Terminal, alongside Western Australia’s CBH Group and Glencore Xstrata, and is likely to be a precursor to further investment in grain storage and handling infrastructure.
Bob Dall’Alba, country head for Olam Australia, said the Mitsubishi joint venture, to be renamed Agrex Australia, would investigate investment in up-country grain storage and possible new port sites and become a much bigger business than the 1.5 million tonnes a year of exports it currently handles.
“What has had the most impact is that the so-called deregulation of the grains market has not really allowed people to get the services they require to control their own destiny,’’ Mr Dall’Alba said.
The deal was still being negotiated while GrainCorp was finalising a $200m overhaul of its network and the Australian Competition & Consumer Commission was developing a draft mandatory code of conduct for grain ports.
The deal could be good news for growers along the eastern seaboard who will have more competition for their crop as poor conditions in Queensland and northern NSW are leading to expectations of another small harvest.
But it means more pressure for GrainCorp with a better capitalised competitor operating near its Carrington terminal at Newcastle and looking to develop more port capacity.
Sumitomo staked its place in February after taking out the local share of the Alan Winney-led Emerald Group that has a terminal in Melbourne and is building another at Port Kembla, south of Sydney, as part of the Quattro consortium. Archer Daniels Midland has yet to declare its intentions for GrainCorp after being stuck with a 20 per cent stake.
THE AUSTRALIAN JUNE 25, 2014 12:00AM
Andrew White
Associate Editor
Sydney
THE Asian food bowl theme is sometimes overstated, but it remains a potent lure for international operators to the Australian market, as highlighted by Mitsubishi’s decision to take a majority stake in Olam International’s local grain-handling operations.
The giant Japanese conglomerate is investing $US64 million ($68.1m) to take 80 per cent of Olam Grains Australia as a precursor to further expansion of the venture on Australia’s eastern seaboard.
The deal includes 12.5 per cent of the 32.5 per cent OGA holds in the Newcastle Agri Terminal, alongside Western Australia’s CBH Group and Glencore Xstrata, and is likely to be a precursor to further investment in grain storage and handling infrastructure.
Bob Dall’Alba, country head for Olam Australia, said the Mitsubishi joint venture, to be renamed Agrex Australia, would investigate investment in up-country grain storage and possible new port sites and become a much bigger business than the 1.5 million tonnes a year of exports it currently handles.
“What has had the most impact is that the so-called deregulation of the grains market has not really allowed people to get the services they require to control their own destiny,’’ Mr Dall’Alba said.
The deal was still being negotiated while GrainCorp was finalising a $200m overhaul of its network and the Australian Competition & Consumer Commission was developing a draft mandatory code of conduct for grain ports.
The deal could be good news for growers along the eastern seaboard who will have more competition for their crop as poor conditions in Queensland and northern NSW are leading to expectations of another small harvest.
But it means more pressure for GrainCorp with a better capitalised competitor operating near its Carrington terminal at Newcastle and looking to develop more port capacity.
Sumitomo staked its place in February after taking out the local share of the Alan Winney-led Emerald Group that has a terminal in Melbourne and is building another at Port Kembla, south of Sydney, as part of the Quattro consortium. Archer Daniels Midland has yet to declare its intentions for GrainCorp after being stuck with a 20 per cent stake.