Stockfeed, baby food and snack foods have become fast rising stars on the SunRice business agenda as the farmer-controlled company further diversifies away from relying on its best known consumer staple - rice.
While global demand for its many respected rice brands well exceeds 1 million tonnes a year, SunRice is also making the most of its broad market experience in the fast moving consumer goods space.
New product lines and business acquisitions are being keenly explored Australia-wide to add extra value to its range, and spread earnings risks, as it targets revenue of $2 billion in the next two years.
For some time the market for feed ingredients for young livestock and pets has been one of those steadily expanding value-added categories, but SunRice has now turned to nurturing young humans, too, with a newly launched infant food range.
Its first foray into baby food, a 125 gram pouched Infant Rice Cereal lineup, is being promoted as a convenient, Australian-made food choice, with no added salt, sugar or artificial colours and flavours.
Initial marketing efforts will focus on young parents - and their babies - in Australia and China, playing up the company's clean, green Riverina origins and its 70-year-old trusted farm sector credentials.
The new line is manufactured for SunRice under contract and follows the recent launch of low GI instant rice cup products to Chinese hospitals and China's huge online health food market.
At the same time SunRice is broadening its rice snack portfolio, expanding overseas distribution channels for rice chips, mini bites and rice cakes and starting production of brown rice chips in Australia, which in turn will broaden scope for more new product innovation.
New product options and acquisitions are also likely in its Riviana Foods business, which includes the Always Fresh, Fehlbergs and Roza's Gourmet preserved food and cooking ingredient lines.
Fehlbergs Fine Foods' pickled vegetable range and Rooza's Gourmet dips and sauces joined the SunRice stable in 2017 and 2018.
Eye on acquisitions
"We are continuing to accelerate pursuit of organic growth opportunities and key initiatives on the merger and acquisition front," said managing director Rob Gordon.
"There are a number of acquisitions we're currently exploring across our group which, if executed, are expected to diversify and increase earnings and align with our growth strategy to achieve $2b in revenue by 2022.
"We are not just a company responsible for marketing the Australian rice crop, but a truly international FMCG and global rice food business."
SunRice was leveraging its strong balance sheet to pursue these value-accretive acquisitions.
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Lately, of note, has been a succession of investments linked to the company's 45-year-old stockfeed division, CopRice.
Last month about $10m was set aside to buy a Gippsland-based stockfeed mill and start upgrading the site to boost its capacity in beef and dairy feed markets.
CopRice also recently converted the former Coleambally rice mill to become Australia's largest ruminant nutrition processing plant.
That coincided with SunRice also spending about $6m acquiring and commencing upgrading the northern Victorian Feedrite mill at Wangaratta, now also part of CopRice's pet food business.
We have quite ambitious plans in the stockfeed category
- Laurie Arthur, SunRice
CopRice has other mills at Tongala and Cobden in Victoria and Leeton in southern NSW, and has enjoyed spin-off by-product benefits from the parent company's recent $10m rice bran processing plant upgrade, also at Leeton.
"We have quite ambitious plans in the stockfeed category," said chairman and Murray Valley ricegrower, Laurie Arthur.
"We've had a long period of expertise in the feed product market, we know the marketplace and we have opportunities to value-add by-products from the rice industry and non-grain products, too."
New stockfeed operations offered the chance to spread the company's product sourcing and marketing footprint further interstate and help counterbalance the cyclical nature of stockfeed demand and ingredient availability.
CopRice's current modest export business, primarily to Papua New Guinea, could also potentially expand further afield by piggy backing on the company's rice trading and milling activities, such as its mills in Jordan or the US.
Long-term PNG play
Mr Arthur said PNG itself, although currently a struggling economy with a much-devalued currency and depressed consumer spending power in recent years, was still SunRice's biggest single rice market and "a wealth of opportunity" in the longer term.
"It's got huge natural resources, including oil and gas reserves yet to be developed," he said.
"It will have its day - and our strategy is to stay the course with our PNG business.
"Six years ago the Middle East wasn't considered such an attractive place to be doing business, either, but that region has some of our wealthiest customers crying out for premium quality Australian rice."
Meanwhile, although barred from many other export markets by trade barriers, SunRice was upbeat about opportunities in the Philippines, and breaking into the tariff protected European market once Australian free trade deals were inked with Britain, and hopefully the European Union.
"Britain was a major market for us until it joined the EU in the 1970s, so now we're hoping Brexit will revive that opportunity," Mr Arthur said.
"It will be a good chance to get a foot back in the European door again.
"We've suffered extreme tariff costs on our sales to that part of the world, but no such restrictions stop rice from Spain, Portugal, Italy or Greece coming into Australia."
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