Agria spurs China's rise as an acquirer in farming

Agria Corp followed grains giant Cofco in raising itself as Chinese acquirer on the world agribusiness stage as the seeds-to-wool group unveiled a return to profit, driven by improvement at its New Zealand arm.

Beijing-based Agria, set up a decade ago as a seeds and sheep breeding group, said that a world deal wave among agriculture groups was not over, forecasting "further consolidation trends in the global agriculture industry".

The group itself said it was to explore "external financing options" to fund deals in "key target markets", including North and South America, and Asia.

"The company envisions finding new merger and acquisition opportunities in its target geographies," said Agria, which three years ago bought control of New Zealand farm supplies group PGG Wrightson.

Chinese appetite

The comments come as Cofco, the state-owned Chinese dairy-to-wine group, which two years ago unveiled a $10bn warchest for foreign deals, is in talks over a joint venture with Singapore-based Noble Group in agriculture, having bought control of European grain trader Nidera last week.

Last year, China's Shuanghui International bought US pork group Smithfield Foods for $7bn, including debt, while Chinese groups have made a series of land purchases abroad.

Other ag deals this year have included, in dairy, the purchase by Canada's Saputo of Australian-based Warrnambool Cheese and Butter Factory, beating two other suitors.

In grains, Japan's Sumitomo Corp has purchased full control of Australian handler Emerald, while France's Tereos has bought a 50% stake in Indonesia's only corn starch producer.

'Meaningful improvement'

Agria's comments came as it unveiled earnings of 59.9m remninbi ($9.89m) for the July-to-December period, compared with a loss of 361.0m remninbi a year before.

Revenues grew 5.5% to 3.22bn remninbi ($531.3m).

The group achieved a 24% rise, to 43.8m remninbi in operating profits at its seed and grain trading operations, reflecting the boost to wheat and corn demand from high dairy prices.

However, the "meaningful" improvement in its performance also reflected a doubling to 32.6m remninbi in operating profits in rural services, and a 15.5% increase to 114.8m remninbi in the result at its key crop protection business.

PGG Wrightson last week unveiled earnings of NZ$13.4m for the July-to-December period, compared with a loss of NZ$306.5m a year before, saying it was "on a steady path to reclaiming its position as a leading option for investors looking for exposure to the ongoing strength of New Zealand agriculture".

Noble in talks with Cofco over agriculture tie-up
Cofco buys control of Nidera, fuelling deal spree
Sumitomo unveils global ag aims as it buys Emerald
Saputo wins majority control of Warrnambool
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