Roc buys Australia grain marketing business

Emerald Grain is one of the largest grain marketing and supply chain businesses in Australia. It helps 12,000 farming operations export some 1.5 million metric tons of gain a year to 35 countries via 17 shipping terminals nationwide. Assets include nine handling facilities across two states and a grain terminal in Melbourne capable of loading vessels at up to 20,000 metric tons a day.

Sumitomo acquired a 50% stake in 2010 and increased its holding to 100% in 2014. It has seconded a number of executives to the company. Net income came to A$42 million ($31 million) for the 12 months ending in March, compared to A$7 million the prior year, according to a filing. Sales during the 2020 financial year fell from A$488 million to A$439 million.

Roc, which has gradually transitioned from an Australia-focused fund-of-funds into a pan-Asia multi-strategy investor, has made agribusiness one of its core growth areas in recent years, citing regional food security and safety concerns. The firm considers agriculture and underinvested industry in Australia and plans to create local champions that can serve Asia’s growing middle class.

“There is a real gap in the market for institutional style food and agriculture in Australia,” Michael Lukin, a managing partner at Roc, told AVCJ earlier this year. “So, we’ve managed to build a niche capability there that is growing quite quickly.”

Much of the thesis is based on the idea that food consumption in the region will shift toward higher quality products and that Australia will benefit from its image as a clean food producer. Key investments in this thematic include Stone Axe Pastoral, a Perth-based beef supplier that claims one of the largest wagyu gene pools outside Japan.

“We are also working closely with a funding partner to execute on land acquisitions,” Lukin said regarding Stone Axe. “This structure allows us to focus our capital on building the wagyu herd and generating private equity-like returns from the business.”

Roc has about A$7 billion in assets under management, of which A$6 billion is in private equity and A$1 billion is in various real assets, including agriculture. The firm launched a food fund in July targeting premium food and agribusiness assets in Australia and New Zealand, although financial details have not been disclosed. Its fourth regional fund-of-funds had raised $120 million as of April.

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• Topics
• Australasia
• Industrials
• Buyouts
• Australia
• ROC Partners
• Agriculture
• Logistics
• Food
• shipping
• Sumitomo Corporation