Australia’s fiercely independent farm services business group, AgLink, looks set to team up with a similar network of family-run agricultural input suppliers in Canada.
The proposed alliance follows a move by AgLink members to seek out international “strategic growth” opportunities.
Details of the commercial arrangement with the newly formed Canadian group are still being finalised, but current maneuvring involves AgLink’s chief executive officer, Bill Dowdle, taking a new job in North America.
AgLink has agreed in principle to develop a commercial and strategic alliance with 12 to 14 independent agricultural retailers in Saskatchewan, Manitoba and Alberta, whose collective sales were worth more than $1 billion – roughly the same turnover as the 31-year-old Australian group.
AgLink’s membership covers 16 independent family-owned farm supply retail groups, with a combined 230 branches nation-wide.
The collective includes the big Victorian-based E.E. Muir and Sons’ multi-state businesses and NSW’s Ag’nVet, Pursehouse Rural and McGregor Gourlay networks.
It retails 25 per cent share of Australia’s farm chemicals, and 15pc of all fertiliser products.
While the network has lost some members to corporate agribusinesses Elders, Landmark and Ruralco in recent years, AgLink remains a solid collegiate of independents with shared business values, and a footprint in all states and the Northern Territory.
The umbrella body provides some negotiation interaction with product suppliers, but is most notable with its commercial and technical capability support and training services to members’ employees.
Melbourne-based investment manager and board chairman, Andrew Maughan, said AgLink would be helping the Canadians build their business structure, too.
“The Canadian agricultural marketplace and style of business is quite similar to Australia and these retailers have grown their operations in a similar way to our members – there’s a lot in common,” Mr Maughan said.
“They’d looked around the world before talking to to us.”
The proposed alliance would be a “meaningful commercial connection”, but was still subject to due diligence inquiries and the completion of a detailed business plan.
He said Australian members would be visiting Canada in the next two months and a reciprocal visit was expected here before a final agreement was anticipated by October or November.
Global supply pressure
The new North American connection was in response to the “growing global consolidation of agricultural input suppliers”.
“We aim to build on AgLink’s positioning as a meaningful partner for those suppliers and to support our members’ aim to deliver further value to Australian farmers,” Mr Maughan said.
AgLink’s Mr Dowdle will become chief executive officer with the new Canadian group.
He moves to Canada in September after an 11-year stint as AgLink’s CEO.
Mr Dowdle said he saw significant potential to take AgLink’s level of engagement with global suppliers to a higher level, adding value to all in the independent space.
Mr Maughan said it was a great opportunity for Mr Dowdle to “accelerate the Canadian group’s success”.
“Bill has been a thoughtful and experienced leader whose approach provided AgLink with stability and clear direction and led to significant growth,” he said.
“The Canadian opportunity presents him with a new and exciting challenge we expect will benefit us all.”
AgLink is now looking for a new CEO to fill his shoes.
The group began in 1986 when horticultural rural retailers including Muir and Sons and Tasmania’s Serve-Ag, formed a distributors network to be an independent voice in discussions with farm chemical suppliers.
It expanded with a focus on harnessing the technical expertise within its membership and from research and development providers.