July 26, 2007

AWB scraps Australian wheat export unit demerger plan
 

Australia's AWB Ltd. has abandoned plans to demerge its international unit, instead proposing to create a new entity for transfer to grower ownership to manage a wheat export monopoly, Chairman Brendan Stewart said Thursday (Jul 26).

Under new law introduced in June, AWB retains control of wheat export marketing only for the crop to be harvested late this year.

After that, management of the single desk covering bulk wheat exports must be transferred to a grower-owned and controlled entity.

"Under the new wheat export marketing arrangements, it would be too complex and too costly to demerge the existing AWB International," the unit that controls the single desk, Stewart said in a statement.

The new entity to be established, which he described as an essential services model, would contract out all functions needed to service the single desk, he said.

It would cost AWB about A$10 million to A$15 million to establish this entity, he said.

A$1=US$0.8853 (Jul 26)