Australia, Sydney: AWB Ltd. and GrainCorp Ltd. last week announced the creation of a joint venture company to better manage the logistics of grain exports on the East coast of Australia. The joint venture, which will be incorporated and jointly owned by AWB and GrainCorp, will provide export logistics services to the two companies and will consist of several staff members based separately from the operations of the parent companies, World-Grain revealed on June 30.

"The j.v. is designed to improve coordination of the grain export task, increase efficiencies and, over time, lower supply chain costs to improve the competitive position of Australian grain growers in the global market," the AWB said.

Representatives of the two companies said the venture stemmed from a desire to improve supply chain efficiencies in Queensland, New South Wales and Victoria. They stressed that the venture will involve only logistics for grain designated for export and will not affect either company’s activities for domestic grain or their competitive position on up-country grain storage and handling.

"We expect this j.v. will drive improvements in rail cycle times and coordination between rail and shipping tasks, making a more efficient grain supply chain on the East coast," said Andrew Lindberg, AWB managing director. He noted that the j.v. also would encourage investment in supply chain infrastructure development while having only a minimal financial impact on AWB Ltd.

"There is a clear recognition that the lack of investment in infrastructure is impacting adversely on the competitiveness of the grains industry," Lindberg said. "We expect this j.v. will encourage participants to invest in the supply chain to improve areas such as train loading times and handling efficiencies at storage sites."

Tom Keene, GrainCorp managing director, noted that while the two companies might have differing views on certain aspects of the industry, working together should improve coordination of the export grain supply chain on the East coast. "This joint venture will provide clearer commercial incentives for investment in the grain supply chain," Keene said. "The result will be a faster and more efficient system that will benefit both producers and buyers of grain. "The j.v. will not restrict the ability of either company to sell grain to domestic customers, or to provide other services to growers and traders. AWB and GrainCorp will remain strong competitors in grain storage, acquisition and marketing services."

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