World Grain - April 2013 - 32

FEATURE: INVESTING IN GROWTH

History – acquisitions have helped drive GrainCorp’s growth
GrainCorp can trace its roots as far back as 1916, but its modern
history really started in the 1980s when Australia embraced privatization across a range of industries, including agriculture. A series of
deals and reforms meant that by 1992, the original Grain Handling
Authority had, in quick succession, been privatized, sold on for the
princely sum of A$100 million and renamed GrainCorp. By 1998,
the reformed entity was listed on the Australian Stock Exchange.
After that followed a series of acquisitions which helped cement GrainCorp’s position as one of Australia’s leading agricultural majors. Vic Grain (Victoria) was acquired in 2000, Grainco
(Queensland) in 2003 and Hunter Grain in 2007.
In 2002, GrainCorp also entered into a joint venture with U.S.
agribusiness giant Cargill to purchase Allied Mills, expanding its
presence along the grain chain from its handling and port base
into production and processing. The deal took GrainCorp into the
baking and milling businesses, laying the foundations that have
enabled the firm to become the biggest supplier of flour for human consumption in Australia.
tion in 2014 of an industry code of conduct to replace the existing Port Access
Undertaking arrangements.
“These are big steps forward and will
allow us to plan capacity ahead with
customers and be more competitive in
international markets,” she said.
GROWTH THROUGH ACQUISITION
Last year the company made a major
move into the edible oils crushing and
liquid bulk port businesses with the
purchases of Gardner Smith Group and
Integro. This has enabled an expansion
into canola and other edible oils.
Watkins said the acquisitions were
consistent with the GrainCorp’s focus

In 2008 came the historic full deregulation of the wheat market in Australia with the removal of the country’s single wheat
desk. This freed GrainCorp to trade grain internationally in its own
right, with the marketing arm of the business rapidly establishing
footholds in Australia, Europe, the U.K. and North America.
The next strategic deal came in 2009 with the purchase of
United Malt Holdings to form GrainCorp Malt, which has transformed GrainCorp into one of the world’s leading maltsters. The
acquisition of the German Schill Malz in 2011 then expanded the
company’s European presence and was followed by the purchase
of a malt plant in Western Australia in 2011, taking its Australian
operations to the west coast.
Last year, GrainCorp also acquired both the Gardner Smith
Group and Integro Foods, Goodman Fielder’s commercial oils
business. The two businesses have been combined to form GrainCorp Oils, creating a leading integrated edible oils business.
Whether or not the company is eventually purchased by one of
the world’s agricultural giants, further expansion can be expected.

on three core grains — wheat, barley and
canola — and its strategy of expanding
its downstream processing operations.
“GrainCorp Oils will provide us with
immediate scale in the edible oils sector
in Australia and New Zealand,” she added. “The business can crush more than
300,000 tonnes of oilseeds annually, and
has 280,000 tonnes of annual edible fats
and oils reﬁning and packaging capacity.
“Its 13 bulk liquid port terminals have
high capacity utilization, with room to
grow, and already handle up to 1 million
cubic meters of bulk liquids each year.”
The strengthening of GrainCorp Oils’
crushing and reﬁning capability and optimization of its ports through the pur-

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suit of more non-grain and bulk liquid
cargoes is expected to add A$45 million
to EBITDA by FY 2016.
In the short term, Watkins said
GrainCorp would bed down its oils
business rather than pursue more downstream acquisitions to target the Asian
market. After that, more acquisitions
could follow.
“There is such a big potential market
out there but we have our proﬁt growth
plan in place so we will follow our strategy and supplement it as and when we
need to,” she said.
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World Grain - April 2013

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