AUSTRALIA – Viterra has announced an agreement to acquire five storage and handling sites, along with a mobile ship loader, from Cargill in a significant development for the Australian grain sector.
This acquisition, which encompasses facilities in South Australia and western Victoria, is anticipated to enhance efficiencies within the supply chain, offering substantial opportunities for growers, buyers, and the industry at large.
While the financial terms of the transaction remain undisclosed, the deal is pending approval from the Australian Competition and Consumer Commission (ACCC) and the Foreign Investment Review Board (FIRB).
The targeted sites include Cargill GrainFlow locations in Maitland, Crystal Brook, Mallala, Pinnaroo, and Dimboola, with the mobile ship loader stationed at Port Adelaide.
Philip Hughes, Viterra’s CEO for Australia and New Zealand, highlighted the strategic advantages this acquisition brings.
“By leveraging the high-speed rail and truck loading facilities at these sites to complement our existing network, we will transport more tonnes to port via the most efficient and cost-effective routes,” Hughes stated.
This increase in supply chain velocity is expected to meet the rising demand for high-quality local grain, enabling growers to export more tonnes earlier in the season and potentially secure a premium for their produce.
Moreover, Viterra projects that the addition of these sites will result in a notable reduction in freight rates, estimating a 15% decrease at Mallala, Crystal Brook, and Pinnaroo, and a 25% reduction at Dimboola and Maitland.
“We will invest approximately US$25 million into these sites in the first two years and continue to allocate US$8 million annually to enhance delivery times and improve the overall grower experience,” Hughes added.
This investment is in addition to the US$75 million currently spent each year on the network.
This acquisition aligns with Viterra’s broader strategy to optimize the South Australian grain supply chain, making it more competitive against origins from the Black Sea, Canada, the United States, and South America.
“Our aim is to enhance service levels for buyers within the South Australian grain supply chain,” said Hughes.
Over the past five years, the number of exporters using Viterra’s network has doubled, reaching 24, which has directly benefited growers.
Zsolt Kocza, Cargill’s managing director for Australia, acknowledged the transaction as a pivotal moment for the company’s growth in South Australia.
“We have a long-term access agreement to Viterra’s export supply chain, which will support our growth plans,” Kocza explained.
The company aims to double its export volumes in the coming years, positioning itself as one of the largest exporters in the state, ultimately benefiting growers and the industry.
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