LANDMARK Operations Ltd’s claim to being Australia’s largest fertiliser distributor has strengthened with the acquisition of Macrofertil Australia Pty Ltd being announced last week.
Adding Macrofertil’s sales of more than 300,000 tonnes a year in WA, South Australia and Victoria to its own national sales of 1.2 million tonnes potentially will give Landmark one third of Australia’s annual fertiliser market, said by industry group Fertiliser Australia to be 5mt.
The acquisition is expected to be completed in the first quarter next year between global parent corporations of the local companies.
While the deal is about fertiliser, market share and assets, a side benefit for about 400 Landmark rural branches across Australia may be access to Macrofertil’s range of crop protection products under the Macro Protect banner to sell alongside their own Genfarm label products.
Until now WA, as the biggest cropping State, was the main retail outlet for Macrofertil’s herbicides, fungicides, insecticides and plant growth regulators, with only limited availability in SA and Victoria.
Macrofertil, which entered the WA market in 2013 when it took over the former Ravensdown Fertiliser WA operation, sells a range of nitrogen, phosphorous, potassium and specialty fertilisers out of distribution warehouses at Kwinana, Geraldton, Albany and Esperance, plus a warehouse in South Australia and one in Victoria.
Its distribution assets have coating and blending capabilities.
Annual sales generated about US$120m (A$158.4m) the parent corporations said when jointly announcing the ownership change on Tuesday last week in Rotterdam, The Netherlands, and Calgary, Canada.
They gave no other financial details of the transaction.
In Australia Macrofertil was created in October 2013 as a wholly-owned subsidiary of agriculture merchant and processor Louis Dreyfus Company (LDC), founded in France in 1851, and now operating in more than 100 countries.
Landmark, which already claimed to be Australia’s biggest distributor of merchandise and fertiliser, is the Australian arm of Canadian-based agri-business colossus Agrium Inc.
Agrium’s expansion in Australia through purchase of Macrofertil comes as it finalises a merger with fellow Canadian corporate, Potash Corporation of Saskatchewan Inc, to create the world’s largest crop inputs and services provider, to be known as Nutrien.
It had hoped the merger would be completed before the end of the year with Nutrien to produce estimated “annual operating synergies” of US$500 million.
In WA, Landmark launched its own fertiliser business in August last year at the Dowerin GWN7 Machinery Field Days after a decades-old agency arrangement with WA’s major fertiliser distributor CSBP was terminated.
CSBP switched fertiliser agency allegiance to Landmark competitor Elders Ltd and Landmark announced it intended to direct market fertiliser products sourced from the Australian arm of American-based fertiliser giant Koch which has sold its products in the Eastern States since 2010.
Now competitors in a cut-throat fertiliser market, CSBP and Landmark were sister companies under the Wesfarmers umbrella until 2003 when Landmark was sold to monopoly wheat exporter and marketer AWB Ltd for $825m.
Agrium picked up Landmark when it acquired AWB for $1.236 billion in 2010.
Landmark’s fertiliser division in WA has its own port facilities at Geraldton and Kwinana and is about to open a new facility at Bunbury to service the South West.
It also has liquid fertiliser capability delivered out of Fremantle, Albany and Esperance.
It markets its own exclusive range of crop protection products as part of its crop inputs, agricultural merchandise, agronomic advice and services, wool and livestock sales, finance, insurance and real estate business model.
“(Macrofertil’s) network of high quality assets will complement our existing retail footprint in Australia and allow us to enhance our product and service offering for new and existing Landmark customers,” said Agrium president and chief executive officer Chuck Magro.
LDC chief executive officer Gonzalo Ramírez Martiarena said the sale of Macrofertil was “another step towards the implementation of our strategic roadmap, enabling us to concentrate on businesses with closer ties to product sourcing and strong farmer relationships”.
Mr Martiarena said LDC would “continue to provide Macrofertil customers in the rest of the world with a wide range of fertilisers and inputs products and outstanding service, leveraging evolving technology”.
In Australia, where its core business has been grains and it is the oldest continually-operating grain trading company, having established in 1913, LDC would continue with merchandising and processing activities across cotton, grains, oilseeds, dairy and sugar business lines, he said.
The fertiliser business was LDC’s most recent new venture in Australia.
In July LDC also sold its African-based fertiliser and inputs business which had annual sales generating more than double the revenue of Macrofertil in Australia.
It had bought that business, Fertilizers and Inputs Holding BV, which distributed fertilisers, crop protection products, seeds and industrial chemical throughout West Africa, in 2011.
LDC still has fertiliser as one of its business platforms, alongside logistics, shipping, industrial processing, rice, cotton, seeds and metals, in South America.
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ACQUISITION of Macrofertil’s business and assets “now cements” Landmark in supply and distribution of fertiliser products, according to Mark Trewin (pictured above), regional director WA and Northern Territory.
“We are excited by the acquisition,” Mr Trewin said.
“We have continued to invest in the fertiliser space since CSBP terminated Landmark’s account and we will continue to in the future.
“We have built our own in-house soil and plant testing laboratory to service our network and its customers, we have our own in-house Nutrascription soil software for our agronomy and sales force to use in the field.
“We also have launched our own in-house precision agriculture platform in WA called Echelon and will be talking to more customers about this offering in the future.
“We continue to train and develop our people’s skills in nutrition and we firmly believe that our entry into the WA (fertiliser) market has created a more competitive market space that has directly benefited our customers.
“We have some exciting plans for product development in nutrition incorporating our Loveland products and will continue to do extensive in-house R&D (research and development) through our product development team – the largest team in WA distribution.
“At the same time, we are also opening a new fertiliser depot and new retail branch on the one site in Bunbury that will be state-of-the-art and service our South West customers.
“This business will house an existing Bunbury fertiliser business that Landmark has also acquired and (will) open in the new year,” Mr Trewin said.