Saudis put Western Australia’s largest grain operation up for sale

Australian Financial Review | 19 December 2023

Saudis put Western Australia’s largest grain operation up for sale

by Larry Schlesinger
The largest grain growing operation in Western Australia is on the market and expected to fetch close to $200 million after its owners, the Saudi Arabian government and Perth-headquartered agricultural investment fund PenAgri, decided to sell.
The portfolio, known as Merredin Farms, is spread across almost 80,000 hectares in the state’s wheat belt and includes land producing wheat, barley and canola.
The transaction would cap a busy year of dealmaking in WA’s agriculture sector, with wealthy businessman Hui Wing Mau offloading a major cattle portfolio in the state for more than $300 million only last month. That came after several other deals, including the sale of a Quintis plantation in the state to wheat king Ron Greentree in August.
Merredin Farms is the largest wheat growing operation in WA. 
The activity in WA comes despite lower commodity prices, higher interest rates and forecasts of drier conditions denting farmland returns, largely in the eastern states, according to a benchmark index tracking a portfolio of prime grade assets.
Part of the Merredin Farms portfolio now placed on the market by the Saudi Agricultural and Livestock Investment Company was originally part of the 200,000 hectare wheat and wool portfolio acquired by the government-backed group from John Nicoletti, a major grain grower, in 2019. It was acquired for between $65 million and $70 million.
The remainder is owned by PenAgri, which is farmed by SALIC on its behalf.
According to selling agents Rawdon Briggs and Duncan McCulloch of Colliers, the buyer of Merredin Farms will immediately become the state’s largest broadacre farmer.
SALIC is owned by the Saudi Arabian government and was established in 2009 to make investments for the purposes of ensuring food security for the country. PenAgri, which is run by long-time agriculture investor and corporate adviser Greg Harvey, owns two other large-scale mixed-cropping and livestock aggregations in the state. Mr Harvey was previously the chief executive of the Forrest family’s Harvest Road cattle company.
Other PenAgri investors include local winemaker Peter Fogarty and his family, and co-founder Steve Kloss.
“This is a globally significant landholding and agribusiness offering that we have decided to sell with our operational partners Merredin Farms,” Mr Harvey said.
SALIC Australia chief executive William England said the sale was part of plans to “reshape its strategic focus on various agricultural value chains in the region”.
“The portfolio offers a turnkey corporate farming operation inclusive of world-class governance, HR, procurement and work, health and safety systems, all focused on growing wheat, canola and barley sustainably.”
Critical mass
Mr England said SALIC Australia intended to remain active in the local agricultural sector. The investment vehicle owns 35 per cent of Brazil-based beef exporter Minerva Foods, which in October bought the Australian Lamb Company for $400 million,
“We’re extremely pleased to market for sale this institutional-grade broadacre grain growing enterprise that has been well-developed and operated,” said Colliers’ Mr Briggs. “Possessing critical mass and with economies of scale, the vendors have created an incredible platform for low-cost, high-volume grain production.”
PenAgri Farms is being advised by Pendulum Capital, a specialist agribusiness adviser, which will provide assistance to Colliers. Sources told The Australian Financial Review that SALIC had already divested the remainder of the original Nicoletti portfolio.
  •   AFR
  • 19 December 2023
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