EMERALD Grain has bought out another of its former co-operative partners and now wholly owns its Victorian grain accumulation business SQP Grain.
To do this, it bought out 55 per cent from the grower co-operative SQP Co-operative and private shareholders, its former joint venture partners.
It follows a similar deal earlier in the year in which Emerald bought out its southern NSW partner to acquire sole ownership of Southern Ag Grain.
The SQP Co-op board unanimously agreed to sell its remaining SQP Grain shares to Emerald following extensive consultation of its grower membership.
The SQP Grain business evolved out of the SQP Co-op, which began as a trading business in 2001 focusing primarily on Victoria’s south-west, before teaming with Emerald in 2007.
As a joint venture, SQP Grain expanded its geographic reach substantially and is now a recognised name across much of the state.
It has offices in Ballarat, Horsham and Moama and has purchased around 4 million tonnes of grain over its eight year history.
Joint venture runs its course
SQP Co-op chairman Doug McDougall said a decision was made that the joint venture had run its course.
“We initially set up the grain business because we felt there was a lack of competition, especially in our local area in the Western District, but now that definitely isn’t the case.
“We’ve had a wonderful relationship with Emerald and we’ve made some very good returns for our members, but grain accumulation is an increasingly competitive space and the board feels it is in our members’ best interest to sell our share of the business.”
Mr McDougall said Emerald and the SQP Co-op have a close relationship and there had been no long-term push from either party towards this decision.
“In a joint venture you always have to keep looking at the future direction and that is what has happened here.”
He said the co-op would now focus on its other investments, including its stake in grain research business Grainsearch and its SQP Werneth storage site, which was not handed over to Emerald along with the sale of the grain buying business.
Emerald Grain managing director John Murray said the new ownership structure was a strategic move for the national grain marketer, storage and handler.
“Grower service will remain SQP Grain’s core focus. We know we can only be successful if our grower customers are successful too,” Murray said.
“We have a dedicated network of local merchants along with new investment in digital tools to make it easier for growers to transact with us. Importantly, all regional grain marketing offices across Victoria will remain open.”
He said SQP Grain managing director Ben Fleay will continue with Emerald Grain in an expanded role.
“Ben will oversee Emerald Grain’s accumulation strategy across Victoria, New South Wales and South Australia, working alongside Emerald Grain’s storage and handling team to ensure accumulation targets and grower service needs are met,” he said.