SCPEL buys into Australian agribusiness

The Balzarini family will remain a majority shareholder through its current shareholding and a $22 million convertible note issued on the same terms as SCPEL. For the next ten years, SCPEL and Wellard aim to expand the business through a strategic plan to increase wheat production and livestock breeding capabilities, as well as to grow the company's livestock shipping capacity.

Wellard and Standard Chartered Bank have matching geographical footprints in Wellard's existing key markets of Southeast Asia and the Middle East, thus SCPEL will help grow business networks through its connections in new target markets.

Wellard claims to be the world's largest livestock exporter of foodstuffs including live sheep and cattle, as well as beef, sheepmeat and grain. It has operations throughout Australia, New Zealand, South East Asia, sub-continental Asia, China, Eastern Europe, the Middle East and South America.

The demand for meat is increasing, particularly in developing countries where GDP growth rates translate into discretionary income for the middle class. AVCJ asked SCPEL about the factors contributing to this trend, as well as the bigger picture for Wellard. Alastair Morrison, Global Head of Standard Chartered Private Equity explained, "Australia's disease-free reputation, as well as the capability to breed and grow cattle to 300 kilos is a significant competitive advantage. Australia has some of the most stringent quality controls on livestock export and strict regulations ensure that the livestock is healthy and disease free."

For cattle, Australia and Brazil are the dominant ocean-traded supplying countries, with each nation supplying approximately 40% of the global trade. Australia ranks second behind North Africa in the supply of live sheep, according to Morrison.

Wellard has traditionally supplied livestock to countries where there is a religious or cultural preference for freshly slaughtered meat vs. frozen boxed meat. China, Russia and Turkey are the countries Wellard has seen the most demand from, as their economic situations improve and a greater percentage of the population is able to purchase better, fresher ingredients. Another factor boosting meat consumption is the lack of refrigeration infrastructure outside major cities in some parts of the world, Morrison added, pointing to the Middle East and Indonesia in particular.

 

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• Topics
• Australasia
• Standard Chartered Private Equity