Posted on September, 25, 2024 at 03:10 am
CARGILL is selling five of its up-country GrainFlow sites, as well as its mobile shiploader at Port Adelaide, to Viterra.
The transaction will see GrainFlow’s up-country sites at Maitland, Crystal Brook, Mallala, and Pinnaroo in South Australia, and Dimboola in Victoria roll into Viterra’s existing network.
Viterra chief executive officer ANZ Philip Hughes said Viterra’s ability to maximise the capabilities of the GrainFlow sites will allow the company to provide its customers with economic benefits.
“By using the sites’ high-speed rail and truck-loading facilities to complement our existing network, we will bring more tonnes to port through the most efficient and cost-effective route,” Mr Hughes said.
“This increase in supply chain velocity will enable us to meet the rising demand for high-quality local grain in the first half of the year, assisting growers to achieve a premium for their grain by exporting more tonnes earlier in the season.”
Bringing the sites into the Viterra network is expected to result in freight-rate reductions of 15 percent at Mallala, Crystal Brook and Pinnaroo, and 25pc at Dimboola and Maitland and provide opportunities for freight efficiency gains across its other Central and Eastern region rail sites in SA.
Viterra has plans to make significant initial and ongoing investments to optimise the potential of the sites.
“We will be investing approximately $25 million into these sites in the first two years, and will continue investing $8M annually to support efficient outturns, and improve delivery times and the grower experience more broadly where required.
“This is in addition to the $75M we currently invest in our network each year.”
Mr Hughes said the acquisition is an important step in Viterra’s focus of making the SA grain supply chain more efficient to compete with interstate and international origins of the Black Sea, Canada, US and South America, and attract more buyers to purchase from the state.
“This will further enhance the level of service for buyers accessing the South Australian grain supply chain which supports Viterra’s focus of increasing competition for South Australian and western Victorian growers’ grain.
“In the past five years, the number of exporters purchasing from our network has doubled, with 24 exporters using Viterra’s network, which has directly benefitted growers.
“We look forward to growing our relationship with Cargill, who will continue to be one of the 24 exporters purchasing grain through the Viterra network, and seeing them increase their volumes as a key exporter from South Australia.”
Cargill Australia managing director Zsolt Kocza said Cargill is committed to growing its business in SA and across Australia generally.
“We have a long-term access agreement to Viterra’s export supply chain, supporting our long-term growth plans,” Mr Kocza said.
“In the next few years we intend to double our export volumes and become one of the largest exporters from the state.
“This means buying more grain from growers to the benefit of growers and the industry overall.”
The transaction is subject to approval by the Australian Competition and Consumer Commission and the Foreign Investment Review Board.
Source: Grain Central