April 20, 2004

Australian Agricultural Co Expands Beef Cattle Land Holdings

Beef cattle producer Australian Agricultural Co. Monday announced it will expand its already extensive land holdings with the purchase of six properties in the southeast of Queensland state for A$25 million.
 
The adjoining properties, 220 kilometers from the company's Aronui feedlot, will be used for "backgrounding" some of the company's herd, it said.
 
Backgrounding is the final stage of grass feeding cattle before they are drafted into homogeneous groups and placed in feedlots to deliver optimal feedlot performance.
 
The company expanded its property base and herd size earlier this year, a move that cost A$50 million.
 
Before the latest purchases, the company owned 21 properties across northern Australia, running more than 460,000 beef cattle on more than six million hectares, up from 380,000 cattle on 5.9 million hectares in mid-2001, when the company relisted on the stock exchange.
 
Don Mackay, its chief executive, said the properties were purchased to enable better market targeting of animals, resulting in increased margins and reduced cattle handling costs on other properties.
 
The latest acquisitions will be funded by a term-debt facility, the total amount of which will be reduced by the expected sale by auction May 19 of its "Maneroo" property aggregation in central Queensland, he said.
 
The company is Australia's largest beef cattle producer, controlling properties in excess of 1% of Australia's land area.