Drought hit grain firm invests in NZ

28-11-2007 | |

Australian agribusiness group ABB Grain plans to extend its operations to New Zealand. The group has been hard hit by severe drought conditions across Australia resulting in an 89% drop in annual earnings.

The Adelaide-based company said it would now look to extend to
New Zealand and grow in Europe, as well as seek possible acquisitions.

plans to partner with New Zealand-based Mainland Poultry’s PCL Feeds Division,
to build an A$30m (€ 17.68m) feed mill in south Auckland. ABB will be the
majority partner with a 75% stake.

The new South Auckland mill would have
an annual capacity of 150,000 tonnes and be operational by

Storage facility
With an eye to the booming dairy
sector, ABB plans to spend A$10 million (€ 5.9m) on storage facilities near
Mount Maunganui and New Plymouth’s ports, to service the Waikato and Taranaki
dairy areas.

ABB’s managing director Michael Iwaniw said the feed mill
and storage would enable ABB to increase its range of grains and meals and its
manufacturing capacity of processed animal feed products.

Growing demand
for animal feed, particularly on the back of the global growth in dairy
products, was a driver.

New Zealand produced 1 million tonnes of compound
feed annually and that was forecast to grow strongly in the next decade, Iwaniw

The company hopes to have storage and bulk handling near Auckland’s
port by the end of the year.

Profit down
In Melbourne this
week, ABB Grain said its net profit for the year to September was A$7.3 million
(€ 4.3m), down from A$59.4 million (€ 35m) in the prior year.

“There’s no
doubt the drought, and the volatile market activity that followed, has had a
significant influence on our net profit,” Iwaniw said.

ABB currently
employs more than 850 full time staff across Australia and New Zealand and has a
turnover of more than $1.5 billion (€ 884.7m)a year.

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