Agribusiness surpasses expectations

By John Wilkinson

AGRIBUSINESS investment scheme sales for 2004 have exceeded expectations with $610 million going into projects, surpassing earlier predictions of $400 million in sales.

Adviser Edge managing director Shane Kelly says the agribusiness sector has achieved its best result since 2000 with sales climbing 76 per cent.

The strong winner this year has been the timber sector, which has snared 82 per cent of all funds raised.

The dominant player in the agribusiness segment is Great Southern Plantations, which raised $240.2 million to take a market share in the sector of 39 per cent.

The second largest player is Timbercorp, which raised $78.7 million, while Gunns takes third place with $44.8 million.

Outside timber projects, wine schemes raised $43 million while almonds attracted $32 million of investor funds.

Kelly says timber schemes’ market share has increased dramatically as fund mangers create more opportunity to meet investor demand.

“Other industries, in particular horticulture, have much longer project lead times and hence do not have the flexibility to dramatically increase the size of investment offerings,” he says.

“Overall, horticulture projects accounted for 17 per cent of the total market. Investment in olive projects continued to decline with sales falling from $19.3 million [last year] to $10.5 million.”

Kelly says Great Southern’s success this year creates another problem for the company.

“The challenge now is for Great Southern to find more than 24,000 hectares [to plant] that meet the productivity criteria for the 2004 project,” he says.