In a major development in the northern property market, Indonesia cattle importing, lot feeding, processing and wholesaling company Santori has confirmed its purchase of the Underwood’s family’s blue-ribbon Victoria River District aggregation Riveren and Inverway.
Santori is the single largest Indonesian importer of Australian cattle.
It is a division of publicly listed Indonesian agri-food company Japfa.
The sale was negotiated privately between the Underwood family and Santori. The selling price has not been disclosed.
In a statement released to Beef Central company spokesman Bruce Warren said Santori had purchased cattle from the Underwood family for many years and knew the quality of the cattle, the operation and the family well.
Mr Warren explained that Santori saw the purchase as a way to support the northern Australian cattle industry and to provide the company with an additional degree of supply security.
“Santori originally was not looking too purchase property, its intention was to offer some support to NT property owners suffering due to the crisis of the live cattle ban,” Mr Warren said.
“Santori’s idea was to offer immediate financial relief by purchasing the cattle herd and leasing the property.
“A management contract would then be given to the owner for continued management of cattle and property.
“As hard as Santori tried to find a partner, not one bank or agency contacted, had clients in need of assistance.
“Santori had felt their offer would be a win-win situation. Financial assistance and breathing space for the property owner and a small insurance policy on cattle numbers for itself.
“Santori felt that when the Indonesian trade eventually opened up there would not be enough cattle available.
“In 2012 had Indonesia raised the permits to half of the peak numbers the NT could not have supplied. Many property owners have had to change their production to suit other destinations.
“In the end we realised we would have to purchase if we wanted some security in numbers.
“At the same time a purchase would give us some vertical integration which from a marketing point of view is a plus. It would also allow us to work on genetic improvements, keeping our male feeders entire and turning off feeders at lighter weights, allowing for more breeders.
“Santori realises the debate going on in Australia regarding foreign ownership but is not sure what all the fuss is about, at the end of the day we are simply caretakers.
“Like the Underwood family and the Farquharson family before that, these properties will still be here long after we are all gone. Santori wants to ensure that the properties become more productive, sustainable and provide mutual prosperity to all stakeholders when it is time to pass it on."
“The Japfa group mission is to produce animal protein, not only in beef but also poultry and aquaculture. For Santori, Riveren and Inverway will only supply about 6pc of their requirements.
“Santori had purchased Riveren and Inverway cattle from the Underwoods for many years and know the quality of the cattle, operation and family.
“The Underwoods have been great supporters of the live trade and Santori.
“Santori take this opportunity to thank the Underwood family for the great legacy that they are entrusting to us. Michael and Georgia Underwood have agreed to stay on to manage the properties to continue the legacy and the high standards that have become synonymous with the Underwood name.”
Riveren and Inverway were both passed in at auction in July last year for auctioneer’s bids of $19 and $15 million respectively.
Offering a total of 40,000 good quality mixed Brahman cattle and 550sq km of country, both stations are widely respected as excellent examples of good quality, well managed VRD country, nurtured by the Underwood family over three decades.
Located in the southern part of the VRD, the adjoining properties are currently run individually.
Inverway (2538 sq km) was offered at auction last year with 17,000 mixed Brahman cattle and full working station plant, while Riveren (3016 sq km) included 23,000 mixed Brahman cattle and full plant.
Inverway was the original home of the Underwood family when they moved to the NT in 1956, and was purchased by the John and Terry Underwood family from John’s sister six years ago to add to their Riveren Station holding.
Inverway was bought for $17.65 million in July 2007, around the peak of the rural property market cycle. That sale included a smaller herd size, around 12,000 head. The properties have been listed privately for the past 18 months.
Both Riveren and Inverway feature a balance of open black soil plains carrying Mitchell, Queensland blue, silky brown top with soft spinifex grass in the red country. The balance in the country and the abundant natural water combined with 47 bores makes it virtually drought-proof.
Further potential for water development exists. Improvements have been designed and implemented for ease of management over many years.
Investment in superior Brahman genetics and close herd management over many years is evident in the quality of the breeding herd on both properties.
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