Hassad wraps up purchase

The Land | 3 May 2012


THE purchase of 40,000ha at Telopea Downs, in far western Victoria is close to the final piece of the land purchasing puzzle for Hassad Australia, who’s parent company Hassad Foods is owned by the Qatar Government.

After officially confirming the Telopea Downs purchase last week, Hassad Australia chief executive Tom McKeon said the company was well advanced in its business plan.

He said Hassad Australia now owned 250,000ha of farmland over Queensland, NSW, Victoria and WA.

“We’re getting towards the end of our business plan now in terms of purchasing land.”

Mr McKeon said since establishing itself in Australia three years ago, the company had been particularly selective about where it bought land.

“The properties are spread over a wide geographic area, so we limit our exposure to production risk – we don’t want to be too exposed in any one area for climate, disease and other risk reasons.”

With this in mind, the company now has a property at Cunnamulla in south-western Queensland, properties at Warren and Trangie in central western NSW, Canowindra on the southern slopes in NSW, Moyston and Strathdownie in Victoria’s Western District, with the new Telopea Downs purchase in Victoria’s Wimmera, and Bindi Bindi, near Moora, Jerramungup and Esperance in Western Australia.

“The focus will be on grain production and livestock, in particular sheep, we wanted to put together relatively large properties in each area to bolt together an aggregation large enough to achieve economies of scale.”

Hassad Australia is predominately east coast focused, with just 27,000ha in WA, along with one part of the Telopea Downs aggregation falls just across the border into SA.

There was a deliberate decision making process in terms of which areas the company selected.

“The plan is based on both a cost / benefit analysis and the reliability of the area,” Mr McKeon.

“The risk profile is something we look at closely.

Even with the purchase of Telopea Downs, traditionally regarded as marginal country by many Wimmera farmers, Mr McKeon said research had found the area was actually very reliable.

“It might not be a high rainfall area, but it does have a reliable productivity which is attractive to Hassad Australia.”

He also said the opportunity to value-add the investment, in the case of Telopea Downs by clay-spreading, which has become a popular practice in the area, improving productivity considerably, was also a factor.

“We’ve been very strategic about where we have invested, we’ve chosen places that have the potential to be aggregated and improved.”

Finally, Mr McKeon said a decision was made regarding how potential purchases would strategically fit in with the nearby properties.

“In Victoria, for example, we have two properties that can get pretty wet, so Telopea is a good offset, which is a lot drier and warmer.

We will be looking at ways the farms can complement each other.”

He said the company would focus on grains, primarily hard wheat production and livestock, in particular meat breed sheep.

Most of the east coast properties Cunnamulla in QLD, Warren, Trangie and Canowindra in NSW, Moyston and Strathdownie in VIC, will be predominantly livestock, while the cropping will be done at the Central West NSW properties and in WA.

The Strathdownie property, ‘Kaladbro’, also includes a feedlot.

“Cattle will complement the sheep in some areas, but sheep are certainly the main focus.”

“It’s the same with the cropping, we will be growing other rotational crops, but hard wheat is the focus.”

The split across the entire business will roughly be a third cropping and two-thirds livestock,.

Mr McKeon did not comment on how much grain the company would produce, but based on local yields in the areas the company is cropping it is expected it would come in between 170,000 and 180,000 tonnes in an average year if wheat was the major crop.

Farm Weekly | 3 May 2012
Jerramungup farmer Jason Spinks (right) will stay on the property after being appointed as the company's farm manager.

Middle East grabs Great Southern land


A MIDDLE East agrifood company has made a significant investment in WA agriculture with the purchase of nearly 15,000 hectares of land in Jerramungup last month.

Through Hassad Australia (HA), an Australian business established in November 2009, the Qatar-based Hassad Food Company (HFC) made the purchases which has brought its Australian landholdings to 200,000ha.

HFC is an investment and development firm in the agriculture and livestock sector based in Qatar, a sovereign Arab state in the Middle East and it now oversees an Australian portfolio of sheep and grain enterprises.

Amarinya, the 14,672ha Jerramungup purchase, is the ninth and most recent Australian aggregation to be acquired by HA and along with the rest of the company's WA landholdings (8483ha at Bindi Bindi and 8340ha at Esperance), also acquired in April 2012, is set to act as a grain production hub for the company.

Farm Weekly believes Landmark Harcourts was involved in the Jerramungup land sale but the company's WA manager Glenn McTaggart said he was unable to comment on the purchases.

Instead, he directed Farm Weekly's questions to Cox Inall Communications, the company tasked with HA's corporate affairs support.

Last week a Cox Inall spokesperson confirmed the claims and said HA only settled the Jerramungup deal two weeks ago.

The properties of five individual vendors made up the Jerramungup landholding including multiple titles once held by individual growers like Jason Spinks who is now employed as the aggregation's property manager.

It has since been revealed the two groups of properties which make up the Jerramungup operation share common boundaries and were chosen for their location in relation to logistics, potential to improve productivity and geographic diversity which could provide a reliable production base for the business in managing year-on-year climate variability.

The Cox Inall spokesperson also said there were no talks taking place about further possible buy-ups in the Jerramungup region because HA had a finite plan for investment in properties and this was already near completion.

But questions still circulated among the Jerramungup community about how much was paid for the land and whether or not the HA investment would ultimately push local potential land buyers out of the market in the future.

The Cox Inall spokesperson said that "most certainly wouldn't be the case" even though she couldn't reveal the actual figures for confidentiality reasons.

"As a commercial business it would not be in HA's interest to pay above market price for a property or aggregation," the spokesperson said.

"Each property bought has gone through an independent market valuation and the company has not paid above market value for any property."

One local farmer not involved with the deal said due to signed confidentiality clauses the majority of Jerramungup farmers had no idea about the impending farm sales until clearing sale advertisements started to appear in Farm Weekly.

He also said rumours the company paid up to $840 an acre had started to circulate in the district but HA chief executive officer Tom McKeon strongly denied that was the price paid for the properties.

"Most of the farms purchased at Jerramungup were already on the market but a couple of vendors were approached to sell," Mr McKeon said.

"I can emphatically say the figure of $840 an acre is way out of kilter and there is no way we paid that price."

Mr McKeon also confirmed HA had recently enlisted the help of Gnowangerup machinery dealership Ratten and Slater to act on its behalf at a number of local clearing sales in a bid to secure farm equipment and machinery.

Recent purchases included a 110-tonne field bin for $73,500 at last week's Coromup Farming clearing sale at Gnowangerup.

Amarinya's location in relation to infrastructure was a reason for HA's purchase and a number of Jerramungup growers also questioned whether the company had plans to bypass CBH's storage, handling and transport system in favour of exporting grain straight to the Middle East in the future.

Cox Inall said all of HA's production was currently sold into domestic markets.

But the company was also careful to mention that in the future HA would look to export its production into the most profitable global markets, which would likely include the Middle East, through existing WA export systems.

Jerramungup Shire president and local farmer Bruce Trevaskis said he had heard rumours of HA's intention to bypass the CBH system to export from the Albany port in the future.

"If it happens I don't think it will have a large impact on farmers in our community but more so on the grain supply chain," he said.

"The Jerramungup Shire would like to see HA use our CBH infrastructure because currently there is one export position out of Albany and that belongs to CBH.

"But with that said we are looking at this new investment as a positive thing for the Shire because it has taken several farms off the market and has put a floor in the marketplace."

But Mr Trevaskis said he could also sympathise with those Jerramungup growers who were sceptical about HA's investment.

"Jerramungup farmers have been burned once before by a corporate structure," he said.

"A number of years ago another corporate investor purchased land around Jerramungup, they left and still to this day owe a substantial amount of money to a number of locals.

"But HA is seen in a different light already because they've employed locals and have started out on the front foot."

Agriculture and Food Minister Terry Redman said he was made aware of HA's interest in investing in WA's agri-food sector when company representatives visited Perth in September 2010, but was unaware of its purchases as negotiations were handled privately.

"This is a positive development which will further enhance WA's trade and investment between WA and the Middle East," he said.

"It's also a strong endorsement of the State as a reliable trading and investment partner."

Mr Redman said he didn't believe there was any need for farmers to be concerned.

He said while it was important to monitor land ownership, it was also his experience that WA farmers didn't want to be told who they could and could not sell their property to.

"The attraction of domestic or international investment to WA is seen as important for the long-term development and success of the State's agriculture and food sector," Mr Redman said.

"WA has the capacity and opportunity to expand its agriculture and food sectors based on its excellent land and water resources.

"This expansion can help meet demand world-wide for increased food production and food security and provide new jobs, financial return and prosperity for WA."

He said in terms of research and development the State Government, through the Department of Agriculture and Food, maintained strong local, national and international links to deliver value throughout the supply chain.

Mr Redman cited the Australian Exports Grain Innovation Centre as just one example of an initiative which would bring together stakeholders throughout the whole grains industry supply chain to drive and implement change and innovation for the long-term benefit of the Australian grains industry.
Original source: The Land

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