VERTICALLY-integrated Queensland red meat processor Australian Country Choice has entered into an agreement with Asian investment firm, Genius Link Asset Management to jointly build a new integrated Australian beef and livestock supply chain business.
Genius Link Asset Management was one of the Chinese companies in the running to purchase S.Kidman and Co, but it is believed to have lost-out in the final stages to the rival Shanghai Penxing Group. The company has been linked to more recent discussions with Consolidated Pastoral Co and the Australian Agricultural Co as it searches for potential local investment targets.
ACC is a group of agribusiness companies controlled by the Lee family, who are currently one of Australia’s largest privately-owned land and cattle owners with extensive beef breeding, growing, farming, lotfeeding and vertically integrated processing interests in Queensland.
ACC group managing director David Foote said the announcement came at a significant time for the broader red meat industry, as the China-Australia Free Trade Agreement unlocks unprecedented market access for the Australian beef and live cattle trade.
“By combining our long-standing and recognised industry expertise with Genius Link’s access to investment capital, the Lee family business can continue to build on its already significant beef interests,” Mr Foote said.
“Collectively we remain committed to expanding our domestic supply arrangements with our long-term customer Coles, while with GLAM’s support, we believe we can accelerate the further development into international markets for Australian beef.
“Our new strategic partner clearly recognises the long-term outlook for the Australian beef industry and is wishing to significantly co-invest with ACC to realise this potential,” Mr Foote said.
“This partnership model for patient investment capital to optimise our industry’s opportunities is long overdue in Australian agriculture,” he said.
ACC group chairman Trevor Lee said the agreement would form the foundation to identify other potentially suitable projects in the Australian beef supply chain, while jointly exploring export opportunities.
“We see this agreement as an extension to our existing footprint,” Mr Lee said. “This may take the form of acquisitions, mergers, joint ventures or long-term leases. But most importantly, the partnership approach will ensure our on-ground success will come from ACC’s beef industry management expertise, which is integral in the day-to-day operations and long term success of these opportunities.
“The time is right for Australian agriculture to embrace foreign investment, be it from China or as in the past from other countries, and we believe the best model is one of ‘partnership’ utilising the core skills of each party.”
‘Significant’ investor interest in Australia
Genius Link Asset Management vice chairman Joel Chang said his company was honoured to partner with the Lee family and the ACC group of companies.
“As GLAM looks to develop its investment portfolio in agriculture, we have had significant interest from potential investors in wanting to deploy capital in Australia. We recognise the importance in working collaboratively with local partners to achieve success”, Mr Chang said.
Comments from both Mr Lee and Mr Chang align remarkably closely with views expressed in Beef Central’s Kidman sale story published earlier today, “Joint venture with Chinese over Kidman deal could point to future investment trends.” Coincidence?
Vision to build a ‘small Cargill’
Speaking to media last year during the Kidman bidding process, Mr Chang said he wanted to build a ‘small Cargill’ and he had $1 billion to fund his Australian agribusiness ambitions ovee the next three years.
“We want to become a small Cargill and Australia offers a fantastic platform to do this. Australia is the perfect export hub to feed China’s 1.3 billion people.”
“We see Australia as the food hub for the Asia Pacific region. If you look at the region, from south-east Asia to Korea, Australia and New Zealand are the only two that have export capacity,” he said.
Mr Chang is a former chief investment officer at Investec Asia and boasts plenty of investment banking and private equity experience at firms including BNP Paribas and Societe Generale.
He knows Australia well, having led GLAM’s two previous Australian agribusiness investments and completed his undergraduate studies at Melbourne’s Monash University.
He said the lack of subsidies to Australian farmers had made them some of the best operators in the world.
“We are hugely impressed with Australian farmers. The work ethic… the commitment… Australia has not put in a lot subsidies compared to other parts of the world, which is what makes them so competitive cost-wise,” he said.
Australian Country Choice is a private family owned company operating Australia’s largest vertically integrated beef supply chain. Headquartered in Brisbane and employing more than 1400 staff, the Company manages through ACC and its Acton Beef joint venture, a cattle herd of more than 250,000 head across 2.4 million hectares of grazing land. The business is fully-integrated to supplying its three feedlots and modern beef processing and value-add facility developed to supply Coles Supermarkets and their customers with 300,000 head of processed cattle per year.
About Genius Link:
Genius Link Asset Management is a diversified investment group with private equity and consultancy services. It’s industry interests include technology, property, agriculture and entertainment, with transactional history covering many geographies including Hong Kong, China, Canada, the US and Australia. Within Australia Genius Link already has established interests in Riverina Oils and Bio Energy (ROBE) and Treetops Plantation, two agricultural projects located in the Riverina region of NSW.