Property

Local producers gearing-up for growth need to be ‘investment ready’

Beef Central, 25/04/2018

WITH local and international interest in Australian beef operations at an all-time high in recent years, producers are being encouraged to consider their growth options and how they can make the most of the investment opportunities in front of them.

Ben Matigian

According to Ben Matigian, director of financial & equity advisory at National Australia Bank, there are more investors looking for opportunities in agriculture than ever before – but producers need to make themselves ‘investment ready’.

“Prospective investors are focusing on good businesses, with a high quality management team they can trust,” Mr Matigian said.

“They don’t just want an annual dividend cheque, they want someone they can grow with,” he said.

“The Australian beef industry is attractive to investors from both domestic and overseas, due to our high quality production systems and the opportunities to tap into growth in Asia.”

“For northern beef, this interest is driven by proximity to Asia, scale of operations and turn off, while in the south there is strong interest in operations producing premium branded product,” he said.

Mr Matigian will expand on how both large and small beef operations can successfully attract capital during Beef Australia 2018 in Rockhampton next month, as a part of a business insights program at the NAB Agribusiness stand.

There was often a difference between what a beef producer perceives as ‘investment ready’ and what an investor is typically expecting to see in a potential partner, he said.

“Producers need established quality reporting systems, financial controls and good governance. They also need a detailed business plan for future growth and succession planning.

“An investor needs that additional layer of detail to really understand the underlying profitability of a business, and to be able to compare it to the next operation or investment opportunity.”

Mr Matigian said five years ago, it was all about China, but the concept of partnering in a business has been evolving to include interest from around the world, with more domestic investors also starting to view agriculture favourably.

“This leaves producers with many options for working with an investor to build their business to capitalise on the growing opportunities for beef. The challenge for the industry is now to gear up to be investment ready, and this where professional advice from your banker and financial advisors is a good place to start.”

  • NAB Agribusiness will be located at site P210 at Beef Australia, with a program of daily business insight sessions from a range of specialists, covering opportunities for business growth, succession planning, wealth management and economic updates.

 

Source: NAB

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