New name planned for new Landmark after Ruralco merger

New Landmark name when Ruralco merger wraps up


Agribusiness
Landmark managing director, Rob Clayton: "We don't want Ruralco people to wear Landmark shirts or vice versa ... we'll celebrate the two businesses where they are different and celebrate the whole business as one".

Landmark managing director, Rob Clayton: "We don't want Ruralco people to wear Landmark shirts or vice versa ... we'll celebrate the two businesses where they are different and celebrate the whole business as one".

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Upbeat Ruralco merger feedback gives Landmark confidence about combining the two businesses by September

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Landmark is set to rebrand itself with a new name before the end of the year when it wraps up its $469 million takeover of farm services rival, Ruralco.

A new colour scheme to replace Landmark's prominent green livery and Ruralco's blue is also on the agenda.

With merger formalities currently on track to be finalised by August or September, Landmark managing director, Rob Clayton, has just finished several days of explanation and feedback talks with 50-plus senior Ruralco managers and joint venture partners from its livestock, insurance, merchandise and other farm inputs divisions.

He is confident of minimal fallout when the two combine under one renamed business umbrella.

That's despite some industry observers hinting the merger will be hard to swallow for some independent-minded Ruralco partners.

Both companies share very similar DNA and the Ruralco guys are excited about the technology and balance sheet Landmark will bring - Rob Clayton, Landmark

Mr Clayton said talks with about 400 Landmark customers also found no discernible opposition to the amalgamation - so long as it did not dilute the company's services or change the key people they dealt with in the bush.

"I've always felt really good about the cultural fit between these two businesses, but after the past week I feel even better," he said.

"Both companies share very similar DNA and the Ruralco guys are excited about the technology and balance sheet Landmark will bring to their ability to help customers perform better."

Overarching brand

While a lot of Ruralco's individual company brands, including the CRT merchandise name, would stay unchanged and continue to focus on their specific customer base, Mr Clayton believed a new over-arching name was likely to be unveiled by year's end.

"The thought process right now is they will come together under one new name - we get a new brand and will all be under that common new company name.

"It's best for both parties.

"We don't want Ruralco people to wear Landmark shirts or vice versa, we want to celebrate the two businesses where they are different and celebrate the whole business as one.

"I'd like it to happen reasonably soon, but we're going through a process to make the right decisions across the business. We don't want to destroy existing brand value."

Feedback from the past month of talks with players in both camps suggested the merger mood was particularly upbeat, despite "some outsiders trying to create trouble" voicing "ill-informed ideas" in the media.

Good cultural fit

In fact, after last week's Ruralco talks, Mike Frank, the retail division head of Landmark's parent company, Nutrien, said he had never felt more confident about an acquisition from a culture integration perspective.

A one-time Canadian cattle breeder, Mr Frank runs the world's biggest agricultural retail business which evolved as fertiliser outfit, Agrium (now Nutrien) made a succession of farm supply network acquisitions across the Americas.

Last week, he reaffirmed the company's growth agenda, based on five key markets - Canada, USA, Brazil, Argentina and Australia.

There's absolutely nothing funky about our tax structure or the foriegn investment aspect of this deal - Rob Clayton

Mr Frank and Mr Clayton also emphasised Ruralco's merger with Landmark, owned by Nutrien since 2010, meant no changes to any taxation structures or the way the new entity would operate as an Australian business.

"The foreign (Canadian) ownership thing does occasionally get people talking, or inferring Landmark or the new company, won't pay a fair share in tax," Mr Clayton said.

"There's absolutely nothing funky about our tax structure or the foreign investment aspect of this deal.

"The combined companies will pay no more or no less tax than they have in the past - it's a taxation neutral outcome."

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All aspects of the merger were already being scrutinised by the Foreign Investment Review Board, the Australian Competition and Consumer Commission and other government regulatory bodies, and were proceeding as expected.

However, Mr Clayton said the advantages of having the backing of a $35 billion agribusiness were numerous, not the least being the amount of capital the parent company had allowed Landmark to invest in strengthening its offering to customers.

Nutrien's big spend

Courtesy of strong cash flow generated by a huge potash and wholesale fertiliser business and other mining revenue, Nutrien has set aside about $1.2b to invest in its global retail operations in the past two years.

More than half that spend - about $700m - has been in Australia.

Aside from the big cash splash on Ruralco, Landmark has outlayed $120m expanding its fertiliser warehouse and distribution network capacity by 190,000 tonnes to 227,000t; buying four livestock agency businesses, building new retail stores including at Hay and Dubbo in NSW, Hamilton, Victoria, and Bunbury in Western Australia, and buying back leased sites such as Gerldton, WA, and Goondiwindi, Queensland.

Landmark will also unveil its new custom-built Plasma livestock data processing system, now being developed in Dallas, USA, which promises to give beef and sheep producers access to a diverse suite of options from forward contract marketing to online sales.

It will also provide producers ability to analyse genetic, sale price and meat processing data for their own livestock and other stock offered for sale.

"Big data is going to be a big part of agriculture and a big part of helping you show buyers why your stock are yielding better on the hook and deserve a 10 cents a kilo premium in the yards," Mr Clayton said.

Fertiliser capacity push

Similarly, Landmark's investment in regional fertiliser warehousing was intended to provide more space to hold product, otherwise often caught in pipeline bottlenecks between port and farms when in demand.

Extra space also meant capacity to store trace element products for more prescriptive fertiliser blends.

"If you think about the way we use fertiliser in Australia, it's still fairly unsophisticated and much the same as 30 years ago," Mr Clayton said.

"If you're spending $100 on fertiliser, I'd prefer you don't spend it all on DAP, but have access to extra copper, zinc and calcium you might need for a better blend, and get a better yield result for your $100.

"Even having a prescriptive response for certain areas of a paddock will make a big difference."

Mr Clayton said the Landmark/Nutrien investment commitment and business agenda was no short term strategy.

"I think we're showing we've got a pretty good focus on our customer base, and the Ruralco guys seem to really like and understand that message when they're hearing it from the horse's mouth."

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