Hi-Fert collapse won't affect supplies

02 Jun, 2011 05:50 AM

Elders and Landmark - the two joint venture shareholders in the now-worthless fertiliser importer and manufacturer, Hi-Fert - say farmers won't be left short changed by the business' financial collapse.

The two big farm supply networks intend to keep sourcing Hi-Fert fertiliser and remain solid customers of the company as its future ownership options, including a possible break up, are considered by receivers.

Hi-Fert was put into administration last week after its bankers declined an offer from Landmark's new parent company, Canadian fertiliser giant, Agrium, to take over the independently operated business, its 102 staff and its (undisclosed) debt.

Elders chief executive officer, Malcolm Jackman, believed Hi-Fert's administrators would achieve a "fairly speedy outcome" for the company, given other newly established competitors in the local market may be keen to buy part or all Hi-Fert's eastern States assets and market ties.

Landmark managing director, Richard Norton said his farm supplies network would be working with all its various fertiliser suppliers, including Hi-Fert, to make sure farmers had the products they needed.

Hi-Fert administrators have allowed trucks to be loaded for dispatch to Landmark and Elders clients for immediate supply.

Landmark orders represent up to 25pc of Hi-Fert's business, while Elders clients have taken about 15 to 20pc in recent years. The bulk of the client base has been to independent resellers.

Mr Norton said although a significant portion of fertiliser needed for the 2011 grain cropping season had already been supplied to customers, large supplies were currently on hand, or in transit to Australia, as most product was ordered three months in advance.

"From our perspective it is business as usual at Landmark with fertiliser requirements," he said.

"There are numerous suppliers to the Australian market and we'll work with all suppliers to ensure our customers have the products they need."

However, he said it was disappointing the major player in Australian market had not been able to stay solvent and a competitive player may now be absorbed by other big fertiliser companies.

"It's also disappointing that not all the shareholders actively continued their full support of Hi-Fert in recent years - there seemed to be some confusion about the important role Hi-Fert had as a wholesale importer," Mr Norton said.

Elders' Mr Jackman conceded that Elders had itself imported three shipments of fertiliser which it offered to the market in competition with Hi-Fert a year ago, but said this unusual arrangement had been quickly terminated and Elders was committed to remaining a major retailer and a customer of Hi-Fert.

"Importing was a bit at odds with our shareholding in Hi-Fert but we are now firmly in the distribution game," he said

"It's concerning that Hi-Fert has gone into receivership, but I think the company will re-emerge with a new owner," Mr Jackman said.

"We won't get caught with a monopoly supplier. Fertiliser is such a competitive global industry and Australia is a good market."

In the wake of Hi-Fert's recent financial performance, Elders recently wrote off any financial value it had previously held in the company's joint venture partnership, ELF.



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