November 28, 2007

 

Australia's ABB may extend operations in New Zealand

 

 

Australian agribusiness group ABB Grain has announced it is considering investments in New Zealand and seek possible acquisitions in Europe.

 

ABB Grain posted a drop of 89 percent in annual earnings due to severe drought conditions across Australia.

 

Eyeing New Zealand's flourishing dairy sector, ABB plans to spend A$10 million (US$11.7 million) on storage facilities near Mount Maunganui and New Plymouth's ports, to service the Waikato and Taranaki dairy areas.

 

It also plans to partner with New Zealand-based Mainland Poultry's PCL Feeds Division, to build a A$30m (US$35.1 million) feed mill in south Auckland.

 

ABB will be the majority partner with a 75 percent stake.

 

The Australian firm also had plans for further development in New Zealand, ABB's managing director Michael Iwaniw said.

 

He said the feed mill and storage would enable ABB to increase its range of grains and meals and its manufacturing capacity of processed animal feed products.

 

Growing demand for animal feed, particularly on the back of the global growth in dairy products, was a driver.

 

New Zealand produced 1 million tonnes of compound feed annually and that was forecast to grow strongly in the next decade, Iwaniw said.

 

The new South Auckland mill would have an annual capacity of 150,000 tonnes and be operational by mid-2009.

 

The company hopes to have storage and bulk handling near Auckland's port by the end of the year.

 

ABB Grain said its net profit for the year to September was A$7.3 million, down from A$59.4 million in the prior year.

 

ABB currently employs more than 850 full time staff across Australia and New Zealand and has a turnover of more than $1.5 billion a year.

 

US$1 = A$1.1408 (As of November 28)