WHILE Elders is about to sell its 776-hectare feedlot and cropping property at Charlton in Victoria it could well be looking to expand its lotfeeding activities elsewhere, says chief executive officer and managing director Mark Allison.
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The decision to make use of Charlton's capital value to help trim the company's debt load was not a sign Elders would quit its involvment in the feedlot sector, including its Killara operation near Quirindi in northern NSW, or its Indonesian facility.
While Charlton is one of Victoria's biggest beef feedlots with 150 hectares of livestock infrastructure, feed mills, flaking plants and related facilities, Mr Allison said its contribution to Elders balance sheet had been variable at times considering the capital expenditure involved.
It was "not absolutely necessary" to future plans.
The site, estimated by industry analysts to be worth about $10 million, is currently custom feeding cattle for Elders' clients, operating at near-capacity because of the good availability of stock and grain in southern NSW.
Killara, owned fully by Elders since 2010, was considered more strategic to the company's broader network operations and was not in Elders sale catalogue.
"It could be that we invest further in lotfeeding in Australia and overseas, once we've reduced our debt to acceptable levels," Mr Allison said.
The company was making a "conscious and deliberate decision" to prioritise capital where it was needed most and producing the best returns.
That priority had also led to Elders' New Zealand merchandise and livestock operations and its part-owned Elders Primary Wool assets going on the market.
Elders has about 108 staff in NZ, plus another 100 contracted agents associated with its sites across the North and South islands, but has closed four unprofitable branches in the past year.
The company's merchandise, agronomy, seed and fertiliser business in NZ has notched up losses for the past two trading years.
The Elders brand has been in the NZ market for some time, but the company sold out once before to a management-run syndicate, which subsequently offered the business back to the company about six years ago.
Elders' live export business was also making decisions about how it responded to opportunities in short-haul markets to Indonesia and Vietnam or long-haul routes to China and Eastern Europe.
Andrew Marshall
National agribusiness writer for Fairfax Agricultural Media.
National agribusiness writer for Fairfax Agricultural Media.
