UPDATED: OPERATIONS at Balaklava-based hay exporter Balco Australia will not change, according to chief executive officer Rob Lawson, despite concerns the South Australian agribusiness icon could lose its local identity with new foreign investment.
Mr Lawson said Chinese feed importer Shanghai Yanhua Hi-Tech would obtain an unspecified percentage of Balco shares as part of the arrangement, but emphasised that Balco would retain local ownership in the joint venture.
"Balco will still have Australian ownership, for sure," he said. "Balco is a publicly unlisted Australian company and will remain the same.
"There's a very small percentage of shareholders that are getting out completely, while all of the major shareholders are only selling a portion of their shares because they still want to be involved and active in the company."
Balco is one of Australia's largest hay exporters, alongside Gilmac and Johnsons, which also operate in SA.
It has a turnover of $60 million and employs 60 people across its two production facilities at Bowmans in SA and Brookton in WA.
The company's head office is located at Balaklava, and Mr Lawson said this would not change.
"Operations will not change under the new arrangement," he said.
"The managers at Balco know the managers at Shanghai Yanhua well and they are very keen for the existing team to remain in place - and that will certainly happen."
If anything, Mr Lawson said employment opportunities could increase as demand rose.
Balco exports about 150,000 tonnes of oaten hay to Asia.
They were one of the first companies to sell hay into China in 2008, starting with a minor 1000t.
"This year, Australia will export more than 100,000t of hay to China and we will be supplying nearly half of that," Mr Lawson said.
Mr Lawson said the Chinese investment would be a major positive for Balco suppliers, as the company expected to increase the hay volumes it exported.
"We're looking for something like a 10pc growth in tonnage volume for the next two to three years," he said.
China takes 25 to 30 per cent - or 40,000t-50,000t - of Balco's annual production.
Mr Lawson said the partners hoped to grow this share to about 40pc of the total production capacity.
"Shanghai Yanhua Hi-Tech have a strong presence in China's agricultural industry, with eight feed mills and about 250 employees," he said.
"The company is particularly well-connected throughout the dairy industry in China.
"They are very active in the Chinese market, providing a number of services, such as feed (hay and pellets), while also providing animal husbandry consulting services.
"Through this, they have been able to give us access to all of the main ports in China, which has been a great thing for us and our growers."
Mr Lawson said Balco were also establishing new markets in Indonesia and Vietnam.
"It is an exciting time for the Australian hay industry," he said.
"We should never underestimate Australia's clean, green reputation in overseas markets, because there are plenty of countries who have issues that we don't.
"Australia is also well respected, particularly throughout Asia, for the way we manage our product and they way we deliver it."