World Grain - September 2012 - 10

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GrainCorp Oils established through major acquisitions
SYDNEY, AUSTRALIA — GrainCorp on Aug. 28 announced that it has executed agreements to acquire both the Gardner Smith Group and Goodman Fielder’s commercial oils business, Integro Foods, which will be combined to form GrainCorp Oils, creating a leading integrated edible oils business. The combined purchase price of A$472 million ($489.8 million) is based on a valuation of A$302 million for Gardner Smith’s and Integro’s enterprise value of A$170 million. Gardner Smith is Australia’s second largest oilseed crusher, a leading operator of bulk liquid port terminals and operates complementary used oil recycling and animal feed businesses. Integro is a leading Australian and New Zealand reﬁner and packager of edible fats and oils for food industry customers. GrainCorp Managing Director and Chief Executive Ofﬁcer Alison Watkins said the acquisitions were consistent with the company’s strategic focus on its three core grains — wheat, barley and canola. “The opportunity to combine Gardner Smith and Integro into a larger business is a clear and logical ﬁt with our business model. Together they build on GrainCorp’s existing supply chain management and grain marketing expertise and expand our downstream processing operations into canola and other edible oils,” Watkins said. “GrainCorp Oils will provide us with immediate scale in the edible oils sector in Australia and New Zealand. “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. “Both Gardner Smith and Integro offer us leading positions along the edible oils supply chain. While both are very good businesses in their own right, it is the combination of the two into a cohesive whole that allows us to unlock additional value for GrainCorp’s shareholders, connects the grain growers who use our network more closely with edible oils customers, and creates a seamless and compelling offer for those customers,” she said. Watkins said the combined GrainCorp Oils business would be expected to provide: • a more compelling offer for edible oils customers, by providing improved commodity risk and supply chain management; • a platform for growth, such as the potential for expansion of capacity at existing terminal sites; • reduced earnings volatility through further diversifying operations into alternative agribusiness cycles; • the ability to capture value at additional points along the edible oils supply chain and opportunity to identify and realize further integration beneﬁts. GrainCorp Oils will beneﬁt from a long-term supply agreement with Goodman Fielder, under which it would provide approximately 40% of Integro total annual volumes. Sam Tainsh will be appointed as group general manager of GrainCorp Oils. Tainsh has been with GrainCorp for more than 11 years, most recently as the general manager of GrainCorp marketing. Klaus Pamminger, currently trading manager with GrainCorp marketing, will be appointed general manager of GrainCorp marketing and will join GrainCorp’s executive team. GrainCorp said that Tainsh will work closely with the leadership teams and employees of Gardner Smith and Integro to ensure a smooth integration. “The three businesses know each other well and there is a strong cultural ﬁt between us,” Watkins said. Each of the acquisitions is expected to complete during October 2012, on satisfaction of closing conditions.

Australian wheat quality improved from last year
SYDNEY, AUSTRALIA — The quality of wheat in Australia is improving from last year, raising the ratio of milling to feed wheat over the last few months, the Australian Bureau of Statistics said Aug. 17 in its Stocks of Grain Held by Bulk Handling Companies and Grain Traders report. In July 2012, the ratio of milling to feed grade wheat grain was 2.5:1 while July 2011 ratio was 1.1:1. Stocks of wheat grain for milling in July 2012 were 8.2 million tonnes which was 72% of all grain stored. This represents a decline of 1.7 million tonnes (or 17%) since June 2012 and an increase of 2.1 million tonnes (35%) compared to July 2011. At the end of July 2012, feed grade wheat grain stocks were 3.3 million tonnes (28% of all grain stored), which was a decrease of 940,000 tonnes (22%) from June 2012. Compared to July 2011, feed
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grade wheat grain stocks were down by 2.1 million tonnes (39%). Australia’s bulk storage of wheat grain in July 2012 decreased by 2.6 million tonnes (18%) to 11.5 million tonnes since June 2012. This was 17,000 tonnes (less than 1%) higher than in July 2011. The continuous decrease of Australia’s bulk storage of wheat grain closely follows the expected pattern of decline post-harvest in combination with increasing wheat grain exports over the last few months. All states recorded a decrease in stocks of wheat grain stored in July 2012. With a decrease of 1 million tonnes (17%) from June 2012, Western Australia registered the biggest fall of wheat grain stocks. The largest quantity of wheat grain was held in Western Australia with 4.8 million tonnes that accounted for 42% of the Australian total. New South Wales (including ACT) was next largest with 3.1 million tonnes, contributing 27% of national stocks.
September 2012 / World Grain / www.World-Grain.com

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World Grain - September 2012

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