Bunge accelerated its efforts to regain scale in Australia
where it once owned assets from flour milling to steel, by revealing plans for
a second port grain terminal, less than a month after opening its first.
Bunge - one of the ABCD group of big agriculture traders,
with Archer Daniels Midland, Cargill and Louis Dreyfus - said that its
Australian subsidiary was to build a bulk grain export terminal at Geelong, in
the state of Victoria.
The terminal, which will handle 450,000 tonnes of grain a
year, will comprise a grain receival facility and three storage silos, and link
to an existing woodchip loading facility at the port.
Chris Aucote, the Bunge Australia general manager, who is
also president of the Australian Grains Exporters Association, and was formerly
grains representative of the Victorian Farmers Federation, said that the
company had received "very good co-operation" from Geelong's port managers.
"We see this investment as being strongly positive," Mr
Return to Aus
The announcement comes less than a month after Bunge loaded
the first cargo - of 18,000 tonnes, bound for the Philippines - at its
Aus$40m-50m Bunbury port in Western Australia, Australia's top grain-growing
state, which has for export facilities been the fiefdom of co-operative CBH.
Indeed, CBH itself until the 1980s operated at Bunbury,
where Bunge has developed storage capacity for 50,000 tonnes of grain, and
received permits to ship up to 500,000 tonnes in its first two years.
The Geelong site will further mark Bunge's return to an
Australian market which it first entered in 1923, 16 years before the creation
of the Australian Wheat Board, with a monopoly for the country's grain
Bunge over the next 50 years attempted to boost its profits
in Australia through expanding into flour milling, buying operations in New
South Wales, Queensland and Victoria, baking, through the acquisition of Herbert
Adams Holdings, and steel, in 1959 becoming a distribution agent for Broken Hill
and John Lysaght.
The group also expanded into pig rearing, owning Fidelity
Meat Industries at Albury in New South Wales.
However, Bunge said it sold "all the assets" it owned
Australia in 2001 - only to return six years later when Australian grains
marketing was deregulated and the Australian Wheat Board (AWB), for which Mr
Aucote once worked, stripped of its monopoly.
The deregulation has lured a series of foreign investments in
the grains industry in Australia which, as a large wheat producer, but relatively
small consumer, is seen as a key source for crops to meet food demand in nearby
However, unlike many of its peers, Bunge has thus far grown
through investing in its own operations rather than through acquisition.
US-based Cargill has bought the trading operations of AWB,
and CHS a 50% stake in Agfarm, while Archer Daniels Midland last year failed in
an attempt to buy GrainCorp, of which it owns 20%.
In June, Japan's Mitsubishi Corporation's purchase of control of Olam International's Australian grains business. In February,
Japan-based Sumitomo Corp bought control of Australian cereals handler Emerald Grain.
Nonetheless, the Australian government has remained cautious
over the market share held by some grains businesses, rejecting ADM's takeover
of GrainCorp in November in part on grounds that it might stifle competition.
Bunge's Geelong plans represent the second announcement
since then of a new port facility within GrainCorp's stronghold of eastern
Noble Group has joined with logistics operator Qube Holdings to develop
facilities at Port Kembla, New South Wales, in which Cargill and Emerald Grain
may also invest.
In Western Australia, Bunge has already held talks with
rival grain traders over access to the Bunbury site, and CHS said last month
that it was "no secret that a lot of companies have been looking at investment
options [in the state], whether in Kwinana, Geraldton, Albany or Esperance".