Australia: ABB Grain plans building on its position as one of the world’s largest barley marketers

ABB Grain Ltd announced on September 15 that the company has a long-term goal that involves building on its position as one of the world’s largest barley marketers to expand into other products and services, according to chairman, Perry Gunner.

And he says the company is already well positioned as one of the world’s best barley marketers having in 2003/2004 on its own (and as part of Grain Australia) contributed to around 35% of the world’s trade of barley.

The head of the ASX-listed, Adelaide-headquartered agribusiness outlined some of the company’s targets for the next five years, including making growers integral to the drive to grow its global business.

“We’re planning to substantially grow our business between now and 2010,” Mr Gunner said. “Growth ensures ongoing financial viability in a globally competitive marketplace, protecting the interests of both growers and shareholders.

“Our strategic focus in the next five years is based on six key elements:
• Growing the company
• Developing effective leaders and employees
• Successfully managing our structures and systems
• Responsible financial management
• Maintaining and developing strong links with growers and customers; and
• Managing for the benefit of growers, the barley Single Desk in SA.

“We recognise the important role growers have in our success because without them we don’t have a business. Importantly, growers equity interest in ABB is around 80% through their shareholding of the listed B-Class shares.

“Also vital is the management of financial and human capital – staff are crucial to our strategy. Our growers and customers expect ABB to deliver efficient and quality services and to do that with inventiveness and flair.

“So, it’s vital to have a team driving ABB that reflects the wide experience, skills and vitality that’s needed to be successful. I believe we’ve now got that successful structure and team, from senior executives through to newest recruits, to take us forward with energy during to 2010. However, developing our IT systems remains a challenge and as with all large mergers it can take 2-3 years to get this right.”

Mr Gunner said ABB recognised it was in a strong market position in South Australia in storage and handling and as a commercial maltster but the company’s vision was much broader in Australia and overseas.

“Yes, it’s great to be the major grains storage and handler in South Australia, to be the largest maltster in Australia (and eighth largest in the world) and have an enviable reputation as the major supplier of Australian barley,” he said.

“We have many successful barley arrangements, e.g. ABB’s feed barley agreement with the United Feed Company in Saudi Arabia is the most valuable arrangement of any Australian grain company with an overseas customer. Japan and China are already key markets for ABB, but we can do more.

“ABB would also like to be identified in future for wheat marketing and an entire suite of integrated commodities and services – products and services that value-add our business for growers’ and shareholders’ benefit.

“Our vision is to be the nation’s premier integrated agribusiness and our long term goal is to become the world’s best marketer of barley – we’re already a long way down the track to achieving that.”

Mr Gunner said ABB had identified considerable opportunities for future growth from ‘farm gate’ commodities such as fertiliser, right through to trading in other grains, packing plants, malt production and providing financial products to growers.

“We’re still proudly Adelaide-based but are now a billion dollar company with an Australia-wide reach and international focus – whether that’s expanding our facilities or business activities interstate or further enhancing existing trade opportunities in Asia or the Middle East,” he said.

“Evidence of our strong international reputation as a company is illustrated by shochu buyers who travel to South Australia each year specifically to select the best Schooner barley for their facilities in Japan.”

Mr Gunner said ABB’s commitment to managing the Single Desk for barley in SA, on behalf of growers, was taken to a new level by its recent discussions with SAFF to provide increased transparency and accountability.

“It shows we’re fair dinkum about being open and transparent about the desk’s operation and maximising its value to growers – and that we were prepared to consult the growers’ peak body in our state – the SA Farmers’ Federation – to achieve this,” he said.

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