Weekly Agribusiness News Recap

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By Georgia Devenish - Agricultural Research Analyst at JLL

One of Canada’s largest pension investment managers, Public Sector Pension Investment Board (PSP Investments), has acquired 89,085 megalitres of water entitlements in the southern Murray Darling Basin for $490 million. Olam International, a global agribusiness and one of the largest almond growers and processors in Australia, is expected to book a one-time pre-tax capital gain of about $311 million from the water sale. Alongside the water purchase, PSP Investments also acquired one of the largest almond orchards globally, the 'Adveq Almond Trust 2 Portfolio'.

Located in Victoria’s Sunraysia region, the 'Adveq Almond Trust 2 Portfolio' comprises eight properties with a total land area of approximately 20,000 hectares, of which approximately 12,000 hectares have been planted to almonds. The portfolio was listed for sale in April 2018. Olam Orchards Australia leased the orchards from the vendor, Swiss-based private equity group, Schroder Adveq, and will continue on as the tenant as part of a new, tiered revenue sharing arrangement with PSP Investments. The Foreign Investment Review Board has already approved the acquisition.

Carlton & United Breweries (CUB) announced the acquisition of Balter Brewing Company today. The Gold Coast-based brewery was founded in 2016 by a group of friends including professional surfers Mick Fanning and Joel Parkinson. It joins other craft brands including 4Pines and Pirate Life at CUB. CUB CEO, Peter Filipovic, said, “In a few short years Balter has become a craft leader through its commitment to quality and by building a brand that appeals to all beer lovers." For CUB the deal also means expanding their presence in Queensland beyond their Yatala brewery in South East Queensland.

V2food has purchased a factory site with a dormant 55,470 square metre facility in Wodonga, Victoria. In the recap last week, it was reported that the start-up behind Hungry Jack's 'Rebel Whopper' had raised $35 million in its Series A funding round. It is backed by the CSIRO, and the likes of the Fairfax family and Hong Kong's richest man, Li Ka-shing. This week v2food announced it would be investing approximately $20 million in the facility to upgrade the site to a 'world-class food-grade' facility.

Select Harvest, one of Australia's largest almond growers and processors, released its full-year results last Friday. The market responded positively, pushing up the price of shares in the company by almost nine percent. Higher than expected yields from the orchard were met with strong almond prices contributing to book earnings before interest and tax of $95.2 million, and net profit after tax of $53 million. Select Harvest recorded a crop of 22,690 tonnes, up 45 percent on 2018's almond crop of 15,700 tonnes. It's a nice result - which has been attributed to more greenfield developments transitioning into productive orchards and the roll-out of new technologies - while demand is strong and almond price averages $8.60 per kilogram.

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Parkside Timber, a leading Queensland and Victorian timber miller, has acquired Western Australia's two biggest native timber mills in as many months. The announcement that the company had purchased Nannup Timber Processing (NTP) and its facility at Nannup came only one month after it purchased WA's second-largest timber mill at Greenbushes, formerly owned by Auswest Timbers. The sale of NTP follows closely on the heels of Forest Products Commission stripping the Nannup mill of a major marri supply contract after it was caught breaching contract terms. Parkside Timber will spend $10 million upgrading the processing facilities at Nannup and Greenbushes and plans to open a mothballed processing facility at Manjimup.

Leading wholesale foodservice distributor, Bidfood Australia, has announced that it will eliminate cage eggs from its supply chain by 2025. The company handles approximately 115 million eggs annually, distributing them to restaurants, hospitals, hotels and schools. This announcement follows Allied Pinnacle's move back in July to eliminate cage eggs from its supply chain by 2023. That company alone uses in excess of 40 million eggs per annum. Animals Australia CEO, Glenys Oojes, said “With around 60 percent of eggs produced in Australia being used in the foodservice sector, Bidfood’s commitment is a huge positive for animal welfare.”

Called the Wine Australia Amendment (Label Directory) Bill 2019, legislation introduced by the Australian Parliament earlier this week grants permission for the creation of a “public-facing online database” of all Australian wine export labels. The directory, to be established by industry body, Wine Australia, will help Australian wine brands to protect their intellectual property rights against those who wish to misuse them for their own gain. It's pertinence is apparent particularly following reports last week of Cambodian police seizing fake Penfolds wine during the raid of a bootlegging operation that specialised in producing fake Australian wine. The Australian government will be giving AU$417,000 to support the directory, sourced from the export and regional wine support package.

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