PrimeAg 'positive' on 2009 property prospects

04 Dec, 2008 06:21 PM
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PrimeAg's executive chairman, Peter Corish, was in a bullish mood at last night’s opening of the company's new Toowoomba, Qld, office.

He conceded, however, that the global finanacial crisis would have made it much more difficult – if not impossible – to raise the necessary capital needed to develop its portfolio of cropping country today.

Mr Corish said the "timing of the company launch was pretty good", principally because the market has been in a "downslide" ever since.

PrimeAg was incorporated on December 24 last year - before the major impact of world economic crisis had reached Australia.

While the global financial crisis has impacted on its share price values, Mr Corish says this is in line with the experiences of almost every other company in Australia.

While the group was in no position to control the market, PrimeAg's top executive said they were able to control how the company should be established, how it operated and what strategies it should implement.

This is a reference to developing a business portfolio based on quality cropping lands spread across northern NSW and southern and central Queensland.

Labelling these regions among the best, most diverse agricultural-producing country in Australia and perhaps the world, Mr Corish said PrimeAg's acquisition strategy was in line with what its prospectus had detailed some 12 months ago.

"We now have five operating hubs between Emerald, Qld, and Gunnedah, NSW," he said.

"We have been able to grow winter crops and have now planted summer crops in all those hubs."

Mr Corish said PrimeAg's $240m-plus investment in prime property and water entitlements had resulted in its hubs now being "operationalised".

Its winter cropping program, based on wheat and chickpeas, is being harvested, although there has been some weather damage in the last few weeks.

That aside, the summer crop plantings are said to be "looking fantastic", making for a positive outlook for the 2009 season.

"We are being encouraged by some decent rainfalls and flows in rivers," Mr Corish said.

Toowoomba had been selected as an administration centre/head office because it was "pretty darned close" to being the geographic centre of PrimeAg’s operations.

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READER COMMENTS

Ted O'Brien.
5/12/2008 4:38:23 AM

It would also have been impossible for PrimeAg to establish itself if Peter Corish's NFF had not spent the last 25 years hurting small farmers by promoting the policy that Australia's farmers should operate without subsidisation in a heavily subsidised marketplace. PrimeAg = less farmers = Economic Rationalism. It is not rational economics.
Brendan
5/12/2008 8:54:35 AM

The whole world is has just entered a new great depression. Number crunchers like these fellas and private equity don't stake up in normal times. Real Estate will halve over the next 3 years as deflation kicks in and the world realises that there is no shortage of food, just a lot of waste, speculation of food prices and government interference that creates some shortages in places like Zimbabwe.
interested
5/12/2008 11:49:59 AM

With a return on equity of 0.007% how does this represent a model of a well structured business? Bank rates are 5% plus, 7 times the return.

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