E-Malt.com News article: 2272

Australia: ABB Grain's chairman Trevor Day told on February 26 shareholders that merger talks with AusBulk were an exciting opportunity. "The notion of bringing the two companies together to create a unified and fully integrated business is an attractive one, provided it is done properly, prudently and methodically," Mr Day told shareholders at ABB Grain's annual general meeting in Adelaide. "It is an exciting opportunity and there is positive potential to build a new company that will bring benefits to growers and shareholders."

Mr Day said on February 26 he had received a wide range of feedback on the merger talks, "some in favour, some cautious and unsure, and some dead against". But he said the discussions were still at an early stage.

ABB Grain and AusBulk earlier this month confirmed they were in talks about a possible merger. The two companies discussed merging back in 2001 but that time the talks came to nothing. Analysts have said the two companies would complement one another. ABB Grain's main activity is the marketing of grain, particularly barley, to countries around the world, while AusBulk specialises in grain storage.

Analysts also said ABB Grain would benefit from a merger because it would come under pressure when other export licences are issued in South Australia this year. ABB Grain currently holds the South Australian bulk barley export single desk.

Mr Day told shareholders he was still confident in the benefits of a single desk system, particularly for a remote area such as South Australia. "The challenge moving forward for all of us is to navigate a path that will preserve or enhance grower value and ABB remains committed to meeting this challenge," Mr Day said.

ABB Grain managing director Michael Iwaniw told shareholders net profit for the 2003/04 year was expected to be between $18 million and $19 million, up from the $15 million for the previous financial year ended at September 30, 2003. "I am confident in this figure at this time, because so much is already known about our volumes of grain from the recent harvest," Mr Iwaniw said.

He expected the company to handle a record five million tonnes of grain or more in 2003/04 - up from 1.2 million in 2002/03 and even higher than the record four million tonnes in 2001/02. He also said there would still be further cost benefits from ABB Grain's acquisition of commodity trader Jossco in July last year.


02 March, 2004