Logistic king's ag harvest expands

21 Jul, 2014 05:45 AM
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Qube chairman Chris Corrigan (left) talks with deputy chairman Sam Kaplan.
Mr Corrigan is backing agriculture as the next boom growth sector in Australia
Qube chairman Chris Corrigan (left) talks with deputy chairman Sam Kaplan.

LEGENDARY logistics businessman Chris Corrigan has expanded his interests in agricultural land, becoming a director and investor in PrimeAg Australia.

PrimeAg is now controlled by one of the country's leading private ­farmers, Australian Food & Fibre, after it divested and privatised late last year. Mr Corrigan, whose directorship was formalised earlier this year, is backing agriculture as the next boom growth sector in Australia.

A private equity business he chairs, Kaplan Equity Investment, made ­separate investments in the ­Australian Agricultural Company and Ruralco late last year. Those investments have grown in value and are now worth about $70 million.

Mr Corrigan, who started ­Australian ports operator Patrick Corporation, chairs emerging port and logistics player Qube Logistics.

Earlier this year Qube teamed up with two of GrainCorp's key customers to set up a rival grains handling facility called Quattro Grain in Port Kembla, indicating Mr Corrigan is taking a vertically integrated approach to agriculture.

His investment in PrimeAg is likely to grow under the new management.

PrimeAg sold 60 per cent of its land portfolio to US financial services giant TIAA CREF's Global Agriculture business last year before selling the remaining properties and the company's non-property assets to Australian Food & Fibre for $45.1 million.

Those properties include Lower Box and Dodds at Garah, NSW, Kurrajong Hills at Warialda, NSW and Lakeland Downs at Condamine in Queensland. They were purchased at a 16.4 per cent discount to PrimeAg's recorded book value.

Australian Food & Fibre, which is chaired by David Robinson, made a $7 million profit on its shareholding in PrimeAg before the buyout of the remaining business.

Accounts filed with the corporate regulator showed Australian Food & Fibre made an overall $10.39 million profit in 2013, up from a $3.579 million profit the previous year.

Mr Robinson said in a directors report the company was on the ­acquisition trail. "The company ­proposes to continue to aggregate its broadacre farming operations through direct investment ­opportunities and has entered into option agreements in respect of properties in the Moree district," he noted.

The $189 million company increased cotton plantings last year to 13,242 hectares from 9755 hectares. It was the company's largest planting, regarded as one of the best cotton and wheat farming operators in Australia.

Mr Corrigan's investment follows other entrepreneurs getting into ­agriculture including billionaire Andrew Forrest, media magnate Harold Mitchell and mining billionaire Gina Rinehart , who bought a 50 per cent stake in two properties owned by the Milne Agrigroup.

Former Leighton Holdings chairman David Mortimer has also set up Alpha Agricultural Investment Partners to buy into rural land.

Mr Corrigan declined to comment on his investment in PrimeAg and Australian Food & Fibre director David Robinson was unavailable.

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READER COMMENTS

Jock Munro
21/07/2014 6:28:43 AM

So what? Would Corrigan know the back end of a cow from the front?!
King Billy
21/07/2014 8:26:43 AM

You don't need to know one end of the cow from the other. Farming needs professional management and the recent investments by Australian business people will greatly assist this. Better than selling rural assets overseas.
Rob
21/07/2014 9:08:27 AM

@ Jock - do you want anyone investing in Australian ag other than burnt out old cockies stuck in the 1950s?
Jock Munro
21/07/2014 4:15:00 PM

Horses for courses Rob and King Billy!
LC
21/07/2014 5:32:44 PM

It is still a free country and any Australian is welcome to have a go at farming. May as well be wealthy people like Gina, Twiggy F and Corrigan. Maybe when they realize how much the regulated labour market is killing profitability via the input and supply chain costs, they will have the power and motivation to change things. Corrigan was good enough to do some of that at Patricks. That would be a help to all farmers. As for knowing animals and cropping, they will just have to buy that expertise. Let us see how they go??!!
Cass
22/07/2014 12:21:55 PM

I wonder what proportion of AFF's impressive profits come from actual production and what proportion from buying and selling businesses and properties.
Palf
20/08/2014 5:51:07 PM

Cass, Theres not many people out there making a killing out of production businesses, the margins are being squeezed to death. In reality, farming is just a real estate play, with the production allowing you to stay in the game.

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