No more asset sale talk at busy GrainCorp - for the moment

GrainCorp sale still possible, but focus is on restructure


Agribusiness
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Everything is for sale - if the right offer comes along

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GrainCorp has no plans to slap any "for sale" signs on its extensive grain network assets once the business is streamlined and split from its global malt division later this year.

However, chief executive officer, Mark Palmquist, said the reality was the agribusiness still could be sold.

"Everything is for sale - if the right offer comes along," he said.

"Both the malt and the grains and oils businesses could possibly still be attractive to somebody."

While GrainCorp still expected to offload its national network of portside bulk liquid terminals to infrastructure group ANZ Terminals for $350 million, management was not scouting for buyers for the drought-bruised grain handling, storage and marketing business, or its oilseed processing division.

There is much more value to be achieved from the grains and oilseed business, so there is no urgency or point in talking about selling - Mark Palmquist, GrainCorp

The Victorian-based oilseed crushing and food products division is currently being integrated into the grains operation.

"We think there is much more value to be achieved from the grains and oilseed business, so there is no urgency or point in talking about selling," he said.

"We are very focused on the demerger of the malt business at this point."

Speculation has frequently put Western Australian grower-owned, CBH, as a potential investment partner or buyer for GrainCorp's assets, however Mr Palmquist said there was no such sale talk happening between the two.

"Yes, we're always talking with CBH - we're on good terms. But it's nothing of that nature,' he said.

"We're both too focused on dealing with the hell of a ride the grain trade has seen globally this year".

Dealing with the drought's impact on the grain business and its customers in much of eastern Australia had also been a priority challenge for the NSW-based GrainCorp.

That included reversing the company's export facilities at Brisbane, Newcastle and Port Kembla to operate as seaboard receival terminals, taking in shiploads of grain, notably feed wheat and barley, from WA and South Australia.

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Aside from the drought costs and challenges, the company was also dealing with the busy demerger, and the oils integration process.

By 2020 the restructured GrainCorp, when fully integrated into one business unit, would be a smaller, more efficient company.

Mr Palmquist said its executive leadership team had already shrunk by three.

I've been quite impressed with the effort people are putting and the way things have progressed - Mark Palmquist

Fewer support personnel would be needed in Australia after the MaltCo business was split off in December because GrainCorp would no longer be managing the division's considerable workforce or multinational regulatory compliance needs.

"We don't need to be as big, but we can't afford to be as big either," he said.

"We've been going through some big changes and I've got to say I've been quite impressed with the effort people are putting and the way things have progressed.

"I'm powerfully proud of what's been achieved under the circumstances."

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The story No more asset sale talk at busy GrainCorp - for the moment first appeared on Farm Online.

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