A CHINESE conglomerate has confirmed itself as a likely long-term shareholder in Australian rural services business, Elders, pushing its ownership stake just above five per cent.
The Hong Kong and Sichuan Province-based Sichuan Hebang Biotechnology Corporation (SHBC) has its origins in the farm chemical sector in western China, but also owns an Australian livestock skins and hides exporting business.
SHBC bought a significant initial shareholding in Elders, equivalent to about 4pc of the rebounding agribusiness, in September, 2017.
This month it has lifted its investment to 5.8 million shares or 5.1pc, a move which Elders management said came as no great surprise.
The stake makes SHBC one of the top five shareholders in the once struggling Elders agency, technical services and merchandise network, behind major investment banking groups HSBC, CitiCorp and PNB Paribas.
The Chinese company’s previous links to the Australian farm sector have been through the 17-year-old Melbourne-based business, HJ Hides and Skins, which also has an office in Brisbane.
HJ Hides and Skins, a leading exporter of cattle hides, services leather products end users ranging from Toyota to Ikea.
Its Laverton North plant processes wet salted cattle hides sourced from Victoria and New South Wales.
Back in China SHBC’s business activities span salt, silicon, coal and phosphate mining and processing, herbicide and pesticide ingredients, and real estate, finance and biological technology.
“We don’t have any commercial relationship with the company or its subsidiaries, but we do know them,” said Elders managing director, Mark Allison.
“We’re happy to have them as shareholders.
“They understand agribusiness and we’ve had good communications with company executives.
“They like our strategy and seem to favour a long-term investment in Elders.”
Mr Allison said SHBC first showed interest in the farm services company after an Elders corporate presentation event in China a year ago and since buying an initial stake company executives had visited the Adelaide head office.
The investment has also been well timed by the Chinese, given Elders’ Australian Securities Exchange share price has climbed from about $4.70 each when the SHBC group first bought in, to about $7.40 a share in the past week, having hit highs around $8.80 in January.
Other significant Elders shareholders include Bell Financial Group, headed by Australian Food and Agriculture principal, Colin Bell; National Australia Bank; Pacific Agrifoods, which is part owned by Co-operative Bulk Handling, and Darling Downs-based agricultural business Brazil Farming.
Aside from its interest in farm sector inputs, the SHBC group also makes smart and special glass products for the electronic, automobile and home appliance industries, and carbon fibre products used in aviation and aerospace.
