Cottoning on to foreign investors

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The Courier-Mail | 24 January 2011

WIN-WIN: Richard Haire, Chief Executive of Queensland Cotton, a subsidairy of Olam,  sees a good side to overseas investment in Australia's agribusiness. (Photo: Philip Norrish/The Courier-Mail)


by Tony Grant-Taylor


 


RICHARD Haire is relaxed about the current influx of foreign money into Australian agribusiness.

And he says it's not just because these days he's employed by Olam, a Singapore-listed rural commodities trading and logistics group.

"Capital is mobile, but the assets are not,'' is how Haire sums up his attitude to those who worry that overseas interests are increasingly buying up the Australian farm, or at least the processing and marketing operations across a range of agribusinesses.

The 20-year veteran of the once ASX-listed Queensland Cotton, which Olam bought in 2007 for nearly $170 million, says what Australian farmers need in volatile and currently high priced international commodity markets are secondary and tertiary businesses in the sector with strong balance sheets.
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"With enormous volatility in markets, trading companies working capital needs are very high,'' he says.

At the same time, Haire says there has been a general reluctance on the part of Australian investors to put money into agribusinesses, often seen as too volatile and cyclical.

"The Australian appetite for investment in the sector just isn't (generally speaking) there.

"Agribusinesses in Australia, more often than not, are valued at a discount to their net tangible assets. International businesses, however, tend to trade at a premium.''

Given his long stint in the agribusiness sector, Haire knows it will always be volatile, even violently cyclical at times.

But he concedes it is hard to refute the argument that is driving much current foreign interest in Australian agricultural  that the rise of China and India, and a potential "doubling of the world population by 2050'', will provide agribusiness groups "with supply and control of product'' with strong medium to long term growth.

When Olam bought Queensland Cotton, after a takeover battle with another major international rural commodities trader Louis Dreyfus, Haire gave Olam chief executive Sunny Verghese an undertaking he would stay on for three years.

He's now served more than his three years, and is not looking to move on.

Haire says Olam, which has leveraged off its Queensland Cotton platform to expand its Australian grain trading, and in 2009 added to its significant international nut supply business by buying a swathe of almond orchards from the collapsed Timbercorp for $288 million, has given him a great deal of autonomy in his enlarged role as head of its Australian and New Zealand businesses.

And he also heads Olam's investment committee, meaning he is intimately involved in the group's global expansion plans.

"I'm finding I've got more than enough satisfying professional challenges,'' he says, "and am learning a great deal.''

Olam processes and supplies some 20 rural products across 64 countries and combines plantations, farming and forestry with an extensive international supply chain network.

It undertakes value-adding secondary processing of part of its product range and also has downstream manufacturing operations.

Haire says that since its takeover of Queensland Cotton, the Australian and New Zealand operation has grown to be one of the top four or five agribusinesses in Australasia.

Olam has also looked at Australian sugar opportunities and has expressed an interest in the dairy industry  though so far it has judged the sugar opportunities available as too expensive, according to Haire.

Haire firmly believes a major factor in long term agribusiness success is to use the cycles to your advantage and to buy when things are crook and be prepared to sell out in the good times.

The continuing influx of global players into the Australian sector, which has traditionally had a high foreign presence, Haire sees as a plus for Australian farmers.

Recently, foreign interest in Queensland has focused on Brisbane-based cattle producer Australian Agricultural Co, while elsewhere overseas interests have taken over grain group ABB Grain and AWB (formerly the Australian Wheat Board).

In the sugar industry, Olam's Singapore compatriot Wilmar International has paid $1.75 billion for CSR's former sugar division, while Thailand's Mitr Phol bought into Maryborough Sugar.

"I don't think it matters'', says Haire, who began his career with a US giant that has long operated in Australia, Cargill.

"They bring their balance sheets, they bring expertise and they bring markets that otherwise may not be available to local players.''

And along with the projected growth in demand, Haire  who is currently president of the Queensland chapter of the Australian Institute of Company Directors  believes the off-shore players have accurately projected generally good times ahead.

"Ten years ago, agribusiness was part of the old economy,'' he says. "Today, we are even seeing bright talented young people keen to get into it.

"I think we are on the threshold of an exciting era.''

Original source: The Courier-Mail
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8 Comments


  1. Dallas
    06 Jul 2018

    Does any one knows what the Australian government ASIC did about the relationship between Jack Seaton and Bob Dall'alba? was it swept under the rug!

  2. John Fulton
    07 Nov 2015

    Australian corruption at it's best. I believe an executive of QC was made redundant for not giving Seaton's transport a two year contract with high price ! corruption, what corruption, Richard Haire and Ben McDonald will put a lid on it for him! Horse Profile: Champagne Jack Champagne Jack is a 19yo year old Bay Gelding. Champagne Jack is trained by P G Moody at Eagle Farm and owned by R A Dall'alba & C J Seaton.

  3. Sia
    29 Aug 2015

    Unfortunately, people with connections at high places get away with murder, following the failed American system wher, it is not what you know, it is who you know !

  4. Sam Smith
    15 May 2015

    In 2004 they reported, A profit upgrade and a hint that the worst of Australia's drought is over lifted Queensland Cotton's share price yesterday, taking several agribusiness-related stocks along for the ride. Although drought had a small effect in the profit of QG, Purchase of the white Elephant Anderson Clayton, had a much greater impact in the results, let's get the facts write Mr Haire and Dall'alba !

  5. Australians say
    15 Nov 2011

    Good old Richard Haire. What he would not do for money and power! Why do we let him do it is any ones guess. He must be one of the few that has made so many mistaks and still has a well paid job. Would it be that he has a lot of people in power directors, etc in his pocket! Shame on you Australians for letting this guy get away with it.

  6. Australian public
    15 Aug 2011

    Offcourse people like Richard Haire would welcome foreign investments into Australia, they gain lots of money personally by this. Let’s face it every high profile executive’s dream is to be on the highest salary with no regards to shareholder interest. As Australian’s we are like sheeps going in line for the stutter we seem to be followers of bad seeds. Which company has performed like Queensland cotton. A company asset rich when Richard got his hands on it and ended up so poor that even the banks were not willing to finance it. Yes, no bank was willing to finance Queensland Cotton when it was sold to Olam. I bet you did not know that one. Yes Richard Haire would welcome Olam to purchase the company, who in the rite mind in Australia would pay a premium for a failed corporation. With back ground in institutional banking, Richard has talent in making figures look good on paper. Look at what has happened in United States with people like Richard making figures look good on paper! Don’t worry your shares and assets are eventually end up in the rubbish bin, if you don’t get your act together. Example of Richard’s mistakes, 1 purchase of Anderson Clayton, a failed US company which had number of run down Cotton Gins and warehouses and closing most of the gins and selling all the assets of the company to service the loan. 2 Purchase of Colly farms assets, from Carlbetza family, without any agreement on securing the availability of water. The Gin Richard managed to buy from Colly farms was useless since Colly sold the water rights for the surrounding farm to the government. 3 Sale of all the assets of Queensland Cotton, even the head office and the warehouse and renting them back. Yes to my surprise Richard Haire managed to get a healthy increase in his salary year in year out because he managed to have the board in his pocket, giving them a healthy remuneration. After all who would pay increases to the directors of a failed company, would the shareholders!

  7. Danesh
    04 Jul 2011

    You are talking about a man that would sell his mother for the rite price. Local investers know what aloser Mr Haire is so, offcourse they would not touch and invest in anything that he has his hands in. After all look at his track record. Look at the history of his performance. He took a healthy and wealthy cotton companey, turned it to a big liability that no bank in Australia would finance. Stuff you Mr pubes You sold our farmers to a bunch of Indians, to secure your job!!!!!!!!!!!!!!!!!!!!!!!!!!!

  8. Quest7
    24 Jan 2011

    I really hate seeing agribusinesses take over the little guys. Do we really want the world's agricultural products controlled by corporations, and the government bail outs will control them, and then control food supply...see it coming?

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