GrainCorp boss ramps up foreign investment case
Chief executive Alison Watkins said Australia did not have a big enough population to provide the capital needed to keep upgrading infrastructure in the grains sector, so investment from the likes of US agriculture company Archer Daniels Midland was essential.
The Australian grains sector also needed access to global markets to buy its products because Australia produced far more than it could possibly consume.
Her comments come as the federal government is considering whether to approve a $3.4 billion takeover of GrainCorp by ADM. But tension is rising inside the Coalition over the bid. The Nationals, like their farmer constituency, fear a foreign takeover of GrainCorp would exacerbate concerns about the supply chain and port access. They argue Treasurer Joe Hockey should reject ADM's bid.
But speaking at a farming conference on Thursday, Ms Watkins said Australian agriculture had already undergone enormous change to become more efficient, competitive and innovative, and was on the cusp of its greatest era of opportunity in the face of growing world demand for food and fibre.
"There are some industry observers who yearn for a return to more insulation from global dynamics, for us to turn back inward," she said. "But it is pure fantasy to think it would somehow be worthwhile or even possible to pause or even turn our backs on the process of globalisation that has delivered us such success."
Ms Watkins said ADM's takeover offer reflected a large and meaningful vote of confidence in Australian agriculture.
"Here is a company that is so confident about our product, capability and future that it wants to invest billions of dollars here," she said.
"It's as good an indicator as any that our industry is globally respected and has huge opportunities open to it around the world."
Ms Watkins said Australian grain growers now had many more options on how they could store or sell their crops and to whom they could sell it. In GrainCorp's catchment, up to half the crop bypassed GrainCorp's export supply chain and was sold to more than 100 domestic customers.
■ Bega Cheese is yet to decide on a possible increase in its bid for Warrnambool Cheese & Butter, which is the target of a three-way takeover battle. The Bega Cheese board met on Thursday to discuss its offer of $2 plus 1.2 Bega shares for Warrnambool shareholders, which amounts to about $7.80 per Warrnambool share. But the company said it was yet to decide whether or not to lift the bid. Warrnambool's board has already recommended an $8 per share offer from Canadian dairy company Saputo.
Frequently Asked Questions about this Article…
Foreign investment is crucial for Australia's agriculture sector because the country does not have a large enough population to provide the necessary capital for infrastructure upgrades. Companies like Archer Daniels Midland (ADM) bring essential investment to help maintain and grow the sector.
Foreign investment is crucial for Australia's agriculture sector because the country doesn't have a large enough population to provide the necessary capital for infrastructure upgrades. Companies like Archer Daniels Midland (ADM) bring essential investment to help the sector grow and access global markets.
There are concerns that a foreign takeover of GrainCorp could exacerbate issues related to the supply chain and port access. Some believe that foreign control might not align with the interests of local farmers and could impact the domestic market.
Some concerns about the ADM takeover of GrainCorp include fears that a foreign takeover could exacerbate issues related to the supply chain and port access. The Nationals and their farmer constituency are particularly worried about these potential impacts.
GrainCorp sees ADM's takeover offer as a significant vote of confidence in Australian agriculture. The investment reflects ADM's belief in the quality, capability, and future potential of Australia's agricultural products.
GrainCorp sees the ADM takeover offer as a significant vote of confidence in Australian agriculture. The company believes that ADM's willingness to invest billions of dollars indicates that the industry is globally respected and has vast opportunities.
Globalization offers Australian grain growers more options for storing and selling their crops. They can now sell to a wider range of domestic and international customers, enhancing their market reach and potential profitability.
The Australian agriculture sector has undergone significant changes to become more efficient, competitive, and innovative. These changes position the sector for a great era of opportunity due to growing global demand for food and fiber.
The Australian agriculture sector has become more efficient, competitive, and innovative. It is poised for significant growth due to increasing global demand for food and fiber, marking a new era of opportunity.
Globalization has been beneficial for the Australian grains sector, providing success through access to global markets. Despite some industry observers wishing for more insulation, GrainCorp believes that turning away from globalization would be a mistake.
Bega Cheese is considering whether to increase its bid for Warrnambool Cheese & Butter. The current offer is $2 plus 1.2 Bega shares per Warrnambool share, but the company has not yet decided on raising the bid.
Australian grain growers now have more options for storing and selling their crops. In GrainCorp's catchment area, up to half of the crop bypasses GrainCorp's export supply chain and is sold to over 100 domestic customers.
Some industry observers believe that insulating Australian agriculture from global dynamics could protect local interests. However, GrainCorp's CEO argues that turning inward is unrealistic and that globalization has brought significant success to the sector.
Bega Cheese is still deciding whether to increase its bid for Warrnambool Cheese & Butter. The current offer is $2 plus 1.2 Bega shares per Warrnambool share, totaling about $7.80 per share. However, Warrnambool's board has recommended an $8 per share offer from Canadian dairy company Saputo.
The ADM takeover bid indicates that Australian agriculture is globally respected and seen as having substantial opportunities. ADM's willingness to invest billions in the sector underscores its confidence in Australia's agricultural future.
The Australian agriculture sector has significant opportunities in the global market due to its respected status and the growing world demand for food and fiber. This positions the sector for continued growth and success internationally.
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