Grain buy could set trend

23 Mar, 2015 04:55 AM
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4
 
The industry is going through a massive investment phase, which would easily exceed $150m

US-BACKED Broadbent Grains has bought a major grain handling facility in the Moree district of NSW, contributing to what is becoming one of the biggest supply chain spending sprees by the industry in more than a decade.

Broadbent Grain purchased the 63-hectare piece of land on the Gwydir Highway for $6.6 million in a transaction which included warehouse storage for 44,000 tonnes and silo storage for more than 3700 tonnes. McGregor Gourlay Agricultural Services was the vendor.

Broadbent Grain, which is 50 per cent owned by the giant US energy, food and grain company CHS, will immediately take over operations of the site, which can take in about 700 tonnes of grain per hour.

"Broadbent Grain are pleased to announce they have taken over the operations of the grain receival site formerly known as Agripark, located in Moree, NSW," the company said in a statement.

The transaction was negotiated by Colliers Internationals' Rawdon Briggs in conjunction with Richard Royle.

It builds on numerous investments being made across Australia in grain handling infrastructure, with Global agribusiness Bunge establishing a new terminal in Western Australia and the Quattro consortium's Port Kembla terminal and Newcastle Agri Terminal.

Rabobank senior grains analyst Graydon Chong said the industry was going through a massive investment phase, which would easily exceed $150 million. He said that while a lot smaller than other grain infrastructure investments, the Broadbent Grain purchase was likely to be replicated around the country.

"The investments we are seeing at the port we are now seeing upcountry as well," Mr Chong said. "There is increased competition following deregulation and so we are likely to see more of these transactions. We will also see more opportunities come up for partnerships with marketers, growers and infrastructure investors."

A report by Rabobank last year, Australian Grains - Infrastructure Growing Pains, said the grains industry was set to undergo a dramatic transformation.

"New grain port infrastructure on the eastern seaboard and in Western Australia is anticipated to change how market participants interact with each other and signals a move towards exclusive supply chains and long-term service agreements," the report said.

AFR
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READER COMMENTS

Jock Munro
23/03/2015 7:01:52 AM

What planet is Graydon Chong on? The so called competition since deregulation has increased growers logistics charges and lowered the relative value and quality of our wheat.
torobrook
23/03/2015 1:38:15 PM

He is on this planet Munro.But you are half way to Pluto.
Jock Munro
23/03/2015 3:01:31 PM

Thank you for your kind words Torobrook. Am I right or wrong?
GFA
23/03/2015 7:21:17 PM

Graydon, the way you talk about Investment in this article, would have the unwashed believe hat Broadbent Grain have added infrastructure to our system. On closer inspection, all they have done is taken over existing infrastructure. That does not add infrastructure or competition does it, it only replaces one operator for another. Let us not get too carried away hey chaps.

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