Emerald acquires all of SQP Grain

10 Apr, 2015 09:37 AM
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9
 
Grower service will remain SQP Grain’s core focus

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.

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FarmOnline
Gregor Heard

Gregor Heard

is the national grains writer for Fairfax Agricultural Media
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READER COMMENTS

Jock Munro
10/04/2015 10:03:03 AM

Another one bites the dust as the big takeover. So predictable. Justifying flogging off a grower co op to a mega merchant is fairy land stuff. Calling a string of merchants competition also stretches the bounds of market reality.
Jack Munro
13/04/2015 2:07:31 PM

Cousin Jock - 'fairy land stuff' is one area nobody can argue with you on. You've been the Mayor of FairyLand for longer than SQP has existed. What would your magic solution be for our 'supposedly broken' industry if you could wave your fairy wand?
Jock Munro
13/04/2015 7:21:35 PM

Jack,(Cousin), Answer these questions for me on what the mega merchants say to the overseas' millers. Do they say that we can supply wheat from growers across the globe but we want the best price for Aussie growers like Jack Munro? Or do they say to the millers that we are end users ourselves and we want to keep the price as low as possible? Or do they tell their customers that the wheat they will provide at the lowest cost is multi origin? When you have answered these questions Jack you can explain how a multi merchant marketing system is better for Australian growers.
Jack Munro
14/04/2015 8:28:51 AM

Way to dodge a question with more fairlyland fantasies Jockie! 1) Why would they promote lower prices to a miller that they are trying to see to? Especially if, as in your scenario, the merchant is a miller also, selling it cheap would be assisting their competition? 2) Multi-origin purchasing started close to 400 years before the Dutch-East India Company was formed in 1602. Buyers deserve have the right to choose their supplier in contracts, as does seller. If after close to 1000 years this is all too difficult for you to accept then perhaps you do need a monopoly to hold your hand...
Jock Munro
14/04/2015 4:53:22 PM

Jack, wouldn't the merchant who supplied the cheapest grain get the sale? Wouldn't it be more satisfactory for the buyer/end user if he had absolute confidence in where his grain was sourced? I have never had a monopoly hold my hand but I have been part of Australia's iconic co-operative marketing arrangement that was the envy of the world..
Jack Munro
15/04/2015 1:12:04 PM

ie: From the inside looking out, your opinion is that your co-op was the envy of the world? Delusion epitomised... pity for you and your monopoly cohorts that you couldn't fool more growers into justifying your own sense of self importance. Still yet to hear a solution from you as first requested...?
Jock Munro
15/04/2015 1:51:52 PM

Windsor single desk poll - over whole of Australia 80% grower support. NSW 90%
Jack Munro
15/04/2015 2:28:14 PM

Similar numbers supported keeping automatic rifles when they were removed... just as with the single desk, a few years on (from your 7 year old poll figures) and only a couple of outspoken idiots believe they are now worse off.
Jock Munro
15/04/2015 7:39:43 PM

Thank you for you kindness Jack.

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