A NEW competitor for SA grain will enter the market in time for the 2013 harvest, which is expected to produce a record crop of more than 10 million tonnes.
This comes after grain accummulation and export business WA's Plum Grove and Eyre Peninsula grower-driven business FREE Eyre launched a new grain-accumulation agreement yesterday.
FREE Eyre has not traded in grain for the past year. The business had been part of joint venture - EP Grain - with Emerald Group Australia. EP Grain started operations in 2008 but in September 2012 it became a fully owned entity of Emerald Group Australia.
FREE Eyre will now establish a new subsidiary - Free Eyre Grain - that will exclusively accumulate cash and pool-based grain for Plum Grove throughout SA.
"We sold our 50 per cent stake in EP Grain in September last year and as part of that sale process we had to sit out of grain accumulation for 12 months," FREE Eyre chief executive officer Mark Rodda said.
He said that this week's announcement coincided with a restructure of the grower-owned company that would give it focus on the grain-accumulation business, and transition its board to one dominated by Eyre Peninsula farmers.
"We've undertaken a strategic review of the whole business and decided to concentrate on things such as grain accumulation," he said.
"We've looked at where we can add the most value for our 500 shareholders, who are predominantly on the EP."
The move would help FREE Eyre spread its "geographic risk", with the new business accumulating grain from across SA, Mr Rodda said. Plum Grove made the "perfect" business partner.
"Plum Grove is a 10-year-old company with a proven track record and they are extremely transparent, extremely reliable and trustworthy," he said.
"If you look at any grain industry analysis from the last few years, Plum Grove are consistently ranked in the top two to three pool operators. They have a proven track record on delivering on what they say they're going to deliver
"After being absent from the grain accumulation market for the past year, we are excited about the prospects for Free Eyre Grain and for our shareholders under the agreement with Plum Grove."
Plum Grove had "set the benchmark in pool performance and transparency" and was set to play a larger role in the SA cash market based on the demand of its shareholders.
* Full report in Stock Journal, September 5 issue, 2013.