Through the purchase of New Zealand's largest feed company NRM Australian listed agribusiness ABB Grain has cemented itself in New Zealand as a major player in the animal feeds business.
A year ago, ABB bought New Zealand maize dryer and trader NZ Grain and Seed Ltd (TAG) for an undisclosed sum.
Managing director Michael Iwaniw at the company’s annual meeting last week in Adelaide said that both NRM and TAG were part of ABB's commitment to place A$160m (€81m) of investment capital by the end of 2010 to achieve A$60m (€30.4m) of earnings before interest, tax, depreciation and amortisation (ebitda).
He predicted a potential record $63-$73m (€ 31.9-36.9m) profit next financial year met with a backlash from some grain growers who have been charged higher storage and handling fees by the company.
Iwaniw told shareholders New Zealand was an important growth opportunity with ongoing expansion designed to cater for the continued consumption of poultry, pork and beef, and for optimising milk solids outputs per cow through supplement feeding.
Supplementary feeding had resulted in increasing imports, particularly palm kernel, into New Zealand, he said.
In the year to September 30, 2008, palm kernel sales exceeded 250,000 tonnes, up 47% on the previous year.
New storage and feed mill
ABB Grain's new storage facility for bulk grain and proteins was opened in New Plymouth in September. Its Mt Maunganui plant is the largest storage facility in New Zealand at 45,000 tonnes.
ABB is also building a A$30m (€15.2m) feed mill in South Auckland in a joint venture with Mainland Poultry. It will eventually have a capacity of 240,000 tonnes.
Work has also begun on constructing ABB warehouses at Tauranga and New Plymouth to service the dairy areas of Waikato, Bay of Plenty and Taranaki.
"We believe ABB can add real value to the New Zealand feed market, particularly the dairy sector through intensive feeding, thereby improving milk yields," Iwaniw said.