GrainCorp notes today’s announcement by Archer Daniels Midland Company (ADM), which includesnew and additional commitments to:
• Extensive additional investment in GrainCorp’s Australian grain storage and handling network;
• Limit increases in overall grain handling and storage charges at silos and ports;
• Ensure maintenance of access at up-country silos and ports; and
• Maintain a grain marketing team in Australia to maximise the opportunities for Australiangrain and growers.
GrainCorp Chairman Don Taylor said:
“ADM’s commitment is a compelling opportunity for the grain industry in eastern Australia.
“While our industry has a range of views on many issues, there is general agreement that Australian agriculture needs significant and ongoing capital investment to ensure we are able to respond to rapidly growing global demand for food.
“ADM’s dedication of a total $250 million of new investment to GrainCorp’s Storage and Logistics business, together with its commitment to maintain GrainCorp’s current capex program of $40-60 million annually, is to be welcomed and will enable major strides on rail related priorities. $250 million of new investment is many times the scale of what GrainCorp has historically been able to invest in this business.”
Mr Taylor said that over the past five years GrainCorp had invested an average of $17 million annually on growth capex in the storage and logistics network.
“Clearly new investment of the scale outlined by ADM today will benefit growers and our industry by improving the efficiency and international competitiveness of our network,” he said.
Mr Taylor also welcomed the additional statements made by ADM regarding infrastructure access.
“The huge excess of capacity and increased intensity of competition both up country and at the port means any owner of our infrastructure is strongly incentivised to provide open access in any case; however it is pleasing to see that ADM has moved to address any lingering uncertainty on this issue,” Mr Taylor said.
GrainCorp’s Board continues to believe that ADM’s offer is in the best interests of GrainCorp shareholders and has recommended that shareholders accept it, subject to there being no superior proposal, the independent expert not determining that the offer has ceased to be fair and reasonable and the regulatory approval conditions to the offer being satisfied or waived by 31 December 2013.
