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SunRice makes a meal of it

SunRice’s Rob Gordon.SUNRICE is fast increasing its taste for diversification in the ready-made heat-and-eat meal market, including products which don’t even use rice.
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A big post-drought product innovation push by the iconic Australian brand has helped drive up SunRice revenue, locally and overseas, as the company targets more value-added earning opportunities.

New packaging, rice product blends and meal packs (55 new product releases in total) have largely transformed its domestic market offering in the past 18 months following the farmer-owned company’s rebound from a decade of drought pressure on earnings and capital spending.

Total sales revenue has climbed from $809 million to $1.15 billion since 2010 and is on track to break $1.2 when the trading year ends in May.

Highlighting the brand’s momentum in overseas markets have been a recent run of serious sales gains in the Middle East following a social media advertising campaign which spurred Australia’s share of the market to new post-drought highs – 30pc better than a year earlier.

Best performers included Kuwait and Jordan, up 36pc and 27pc respectively.

At home last calendar year’s core gluten-free white rice product range lifted its retail sales volumes almost nine per cent in a market segment that grew just 3.3pc.

Microwave sachet pack and cup sales increased 12pc and value-added rice cakes, including new mini bites pitched at the school canteen and lunch box market, grew 8pc.

The innovation and marketing push has included more value-added packaging for Asian markets, and across the Pacific and the Middle East where SunRice products enjoy exceptional loyalty and brand recognition rivalling Coca-Cola.

The offshore and local marketing push has contributed to SunRice’s annual earnings (after tax) almost trebling to $34m in the past four years.

Its October 31 half-year after-tax profit jumped 39pc on the same period in 2013 to $22.7m.

“We’re intent on growing the size and profitability of our market to bring better returns back to our growers and shareholders,” said chief executive officer Rob Gordon.

“We’ve got a trusted product and strong brand equity and heritage, so since coming out of drought we’ve used that platform to invest in new products and marketing strategies.

“Rice remains very much our core business, but we are extending our experience in convenience meals to be a packaged meal business with other ingredient blends and meals outside rice.”

Pasta-based snacks are already part of SunRice’s heat-and-eat range, as are lentils, chickpeas and other grain mixes in new “health and wellbeing” lines which Mr Gordon described as “going like a train”.

Particularly popular were rice blends with so-called “super foods” quinoa and chia available in heat-and-eat formats or as part of the new re-sealable household pantry packs.

The SunRice offering extends to organic, exotic red and black gourmet rice, and “clever” low glycemic index Doongara white rice (with a GI of 54).

Low GI rice also has strong potential in Asia, where concerns are mounting about a spike in diabetic health problems associated with the population’s increasingly westernised diet.

Meanwhile, the growing popularity of gourmet Japanese cuisine in developing Asia was also opening up markets for short and medium grain Australian sushi-style rice.

“Thailand, despite having its own sizeable rice stockpile, is becoming one of those premium markets for us because, like most of Asia, they only really grow long grain,” Mr Gordon said.

With 80pc of the the Australian crop exported, SunRice was focusing on beefing up exports of retail packaged and consumer convenience meal lines, rather than relying as heavily on earnings from bulk tender contracts with foreign governments and traders.

Mr Gordon said value-added packaging and convenience lines adapted from products developed for Australian consumers were bolstering overseas revenues, and volumes continued to grow despite the price premiums attached to the SunRice brand.

“We’re certainly not without our competitors or market access challenges,” he said.

“The US built a strong presence in the Middle East when we were unable to supply Australian rice during the drought, but we’ve recovered our old volumes and more – and we generally sell at a premium to Californian rice.”

However, while Europe and many potential Asian markets remained relatively untouched because of trade barriers and the crop’s political sensitivity in regions such as the Indian sub-continent, SunRice was focusing on better servicing existing customers and shaving distribution costs.

“We play a genuine food security role in many of our traditional markets,” he said.

“We are blessed with an extraordinary brand reputation, but comes with considerable social responsibility, particularly in the Pacific and PNG.”

A chip off the old blockBrown rice chips are notching up an impressive debut for SunRice in the salty snack food market as the brand takes on traditional name such as Smiths, Doritos and Red Rock Deli.

Since September’s launch of the gluten-free healthy snacks, SunRice has been “hard pressed to keep enough on supermarket shelves” according to chief executive officer Rob Gordon.

The 158 gram packs retail at a health food premium price of about $5 each.

SunRice is currently sourcing its chips from the US, but Mr Gordon is keen to explore other local processing options if demand continues to be as robust in the whole food aisles of Coles, Woolworths and IGA supermarkets.

The company is currently cranking up production of mini rice cakes and heat-and-eat meals previously made in Thailand as part of an $8.5 million investment in food processing capacity at its Leeton plant in southern NSW.

The project, employing 20 extra staff at the site, will be fully operational next month and follows another $8.5m investment in the nearby CopRice pet food kibble extrusion plant and its northern Victorian feed mills last year.

SunRice invested about $32 million last financial year on new equipment and efficiency initiatives to help boost its capacity and product range.

“Some of these food lines start off being made in Thailand when we introduce them, but we look to bring more of our sachet and cup meal lines back to Australia,” Mr Gordon said.

“The vast majority of what we do is here, creating jobs in regional areas and bringing jobs onshore at a time when others are going offshore.

“We think we’re a really good news story for the Australian food sector – we’re very proud of what we’re achieving.”

Since 2010 SunRice had also doubled its investment in marketing to support and invigorate new product packaging changes.

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Badge of dishonour

Storm over VW’s HQ. Picture:Getty ImagesALMOST as soon as governments began testing vehicle emissions, auto makers found ways to cheat.
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In the 1970s some cars were found to be rigged with “defeat devices” that turned off the emission systems when the airconditioning was turned on. Others had sensors that activated pollution controls only at the temperature regulators used during the tests.

“The concept of a defeat device has always been there, because there’s such an incentive for the manufacturers to cheat on the emissions tests,” said Clarence Ditlow, executive director of the Washington-based Center for Auto Safety. Volkswagen “took it to another level of sophisticated deception we’ve never seen before”.

The scandal now engulfing VW, which has admitted to outfitting cars with software designed to give false readings on emission tests, is unique both for its size and digital complexity. But it’s not the first emissions-cheating case, even for the Wolfsburg, Germany-based company.

On July 23, 1973, the Environmental Protection Agency accused the auto maker of installing defeat devices in cars it wanted to sell in the 1974 model year. VW then admitted it had sold 1973 model year cars with the devices, which consisted of temperature-sensing switches that cut out pollution controls at low temperatures.

The EPA suspected VW sold 25,000 vehicles with the cheating technology. Then-attorney general Elliot Richardson took the company to court for violating the Clean Air Act. They settled with a $US120,000 fine without admitting any wrongdoing.

“Our relations with the EPA are too important to permit us to become involved in an adversary proceeding on a matter of questionable significance,” VW said at the time, explaining why it paid the penalty.

General Motors agreed in 1995 to pay $US45 million after being accused of circumventing pollution controls on 470,000 Cadillac luxury sedans. The cars’ 4.9-litre V8 engines were tuned to turn off pollution controls when the airconditioning ran, the EPA said at the time.

The government alleged the engines, which were installed from the 1991 through to 1995 model years, ended up releasing 90,000 tonnes of excess carbon monoxide into the atmosphere. GM disagreed, saying it was paying the fine as part of a conciliatory approach to dispose of enforcement cases more quickly.

“We strongly disagree with the allegations made by the federal government,” GM said at the time. “This is a matter of interpretation of current regulations regarding the complex issue of off-cycle emissions.”

Besides agreeing to cover $US25 million in recall, GM paid an $US11 million fine and agreed to spend $US9 million in “corporate community service”. To help the cause of cleaner air, the Detroit-based auto maker agreed to buy back older, more polluting cars and provide school districts with buses powered by batteries or natural gas.

The EPA says VW has admitted to using defeat devices in the 482,000 cars now under investigation in the US. The agency says the device built into the cars sensed when they were being tested on a dynamometer. During those times, the car uses an emission-control system that traps nitrogen oxide, a key ingredient in smog. When the car senses it is on the road, it cuts back on the emission control – releasing from 10 to 40 times the permissible amount of nitrogen oxide.

“It takes a very savvy program to fool the computer and detect the sophisticated test cycle,” said Stanley Young, spokesman for the California Air Resources Board, which is also investigating VW. “This was clearly well thought out and took a lot of programming.

“Engines these days are very complicated,” he said. “So there is a sophisticated and powerful computer inside all cars, and that was where this algorithm, this ‘second routine,’ was embedded.”

VW could be fined as much as $US18 billion and may have to recall and fix the cars in the US. European authorities are conducting their own investigation, as are those in South Korea, which could result in further penalties.

VW has apologised for the cheating and vowed to earn back the trust of consumers. Chief executive officer Martin Winterkorn quit on Wednesday, saying the company needs a fresh start.

The current VW case resembles a 1998 case involving seven manufacturers of heavy-duty truck engines: Caterpillar, Cummins, Detroit Diesel, Mack Trucks, Navistar International Transportation Corp, Renault Vehicules Industriels, and Volvo Truck Corp.

The companies agreed to spend more than $US1 billion, including $US83.4 million in penalties, to settle the case – the biggest civil fine to that point for violating an environmental law. Then-attorney general Janet Reno cautioned the industry that “an ounce of compliance is worth a pound of penalties”.

As with VW, the truck-engine makers used software to alter pollution control technology under highway driving conditions. The engines met emissions limits when they ran on the EPA’s 20- minute federal test procedure. On real-world highways, they spewed up to three times the legal limit for nitrogen oxide, regulators said. The result was 1.3 million tons of excess nitrogen oxide in 1998 alone.

The industry agreed to spend more than $US850 million to accelerate the development of cleaner engines, to rebuild older engines and recall pick-up trucks that were equipped with defeat devices.

Also in 1998, the Justice Department and the EPA settled a $US267 million case with Honda and a separate $US7.8 million case with Ford for selling cars with systems designed to defeat emissions control.

Last year, Hyundai Motor Co and Kia Motors Corp agreed to pay the equivalent of $US350 million in fines, forfeited credits and certification testing to settle US claims that they overstated fuel economy on the window stickers car buyers see at dealer showrooms. The companies tested cars only at optimal temperatures and used the best results rather than averages, according to the EPA. The inflated mileage claims affected 1.2 million vehicles sold in the US.

“Hyundai has acted transparently, reimbursed affected customers and fully co-operated with the EPA throughout the course of this investigation,” David Zuchowski, president and chief executive officer of Hyundai Motor America, said at the time. “We are pleased to put this behind us.”

The Korean auto makers agreed in 2012 to compensate consumers for the misleading mileage claims by issuing debit cards to affected customers. The rating on the Kia Soul’s window sticker was lowered by 6 miles per gallon, and most of Hyundai and Kia’s other US models were adjusted down by 1 or 2 miles per gallon.

Ford had to lower its fuel-efficiency estimates for certain models twice in less than a year, citing a computer-modelling error. The Dearborn, Michigan-based company sent out payments ranging from $US200 to $US1050 to pay 200,000 customers last year. Bloomberg News

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PM spill motion defeated

On the chopping block: Tony Abbott faces a leadership spill motion at 9am on Monday.UPDATED 9.20am: TONY Abbott’s immediate fate as Liberal leader and Prime Minister is safe for the foreseeable future, with the leadership spill motion defeated by 61 votes to 39 at a special meeting of the Liberal party room at 9am today.
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Rural Liberals and Nationals declared they don’t support the looming spill motion, while urging continued support for Mr Abbott to avoid repeating the leadership chaos of the Rudd-Gillard-Rudd government and destabilising the government.

Mr Abbott issued a statement on Sunday saying he’d the asked the Chief Government Whip to call the meeting to consider the spill motion, a day earlier than first declared last week.

“The last thing Australia needs right now is instability and uncertainty,” Mr Abbott said.

“On reflection, and after talking to my colleagues, I’ve decided that the best thing we can do is deal with the spill motion as quickly as possible and put it behind us.

“Accordingly, I’ve asked the Whip, Philip Ruddock, to convene a Party Room meeting at 9 o’clock on Monday morning to deal with this matter.

“The only question for our party is do we want to reduce ourselves to the level of the Labor Party in dragging down a first term Prime Minister.”

Labor is ‘praying for Tony’Last week, Mr Ruddock received a notice of motion from Western Australian Liberal MP Luke Simpkins, seconded by colleague Don Randall, proposing the scheduled Liberal party room meeting on Tuesday, “resolve, via secret ballot, that the senior positions of the Federal Parliamentary Liberal Party be declared vacant”.

The spill push arrives as discontent over Mr Abbott’s leadership has escalated dramatically in the past fortnight, following his controversial decision to award a knighthood to Prince Philip and the LNP’s shock result at the Queensland State election.

Senior Liberal ministers Malcolm Turnbull, Julie Bishop and Scott Morrison have all been touted as potential candidates – but with no declared challengers, Liberal members appear more determined to circumvent any actual leadership vote today.

However, political analysts are saying whether Mr Abbott survives any leadership vote this week, his deep-seated unpopularity and poor voter polling will continue and eventually ignite a leadership change before the next federal election in 2016.

Recognising the PM’s ongoing battle in the polls, one rural Labor MP said – tongue in cheek – that Labor party members are “praying for Tony”.

However, Victorian Liberal MP and chair of the Coalition’s agricultural backbench committee Dan Tehan declared he would be voting against the spill motion.

“I have been out and about in the electorate all week and the feedback I have received is that people want a government that is united,” he said.

“We have to stop focusing on ourselves, work as a team and get on with governing.

“My number one priority is working and delivering for the people and communities of Wannon.

“The Prime Minister has my support.”

Ditch the chaos, say rural MPsSouth Australian Liberal MP Tony Pasin – also a member of the agricultural committee – issued a similar statement declaring his support for the leader reflecting the views of constituents in his rural electorate of Barker.

“The overwhelming message I am hearing is that the people of my electorate want the government to focus on delivering outcomes and delivering strong and stable leadership – not becoming a chaotic rabble like our predecessors,” he said.

“Under Prime Minister Abbott’s leadership, this government is delivering stronger economic ties through three free trade agreements in 17 months; helping business create 4000 new jobs a week; protecting our borders by stopping the boats; repairing the budget that was devastated by the previous Labor government; and has abolished the carbon and mining taxes.

“As a Prime Minister with a democratic mandate from the electorate we owe it to the voters to respect their decision and get on with the job.”

Mr Pasin urged his disillusioned colleagues to, “stop the mid-summer madness, stop talking about themselves and get on with the job of delivering strong and stable government for the people of Australia”.

National party members have also declared support for Mr Abbott and warned disgruntled Liberals against taking the Coalition down a similar path of disunity and instability like the former Labor government.

Queensland Nationals Senator Matt Canavan said his party is “100 per cent” behind Mr Abbott.

On Facebook last week he said, “The overwhelming feedback I’m getting is that people are sick to the back teeth of our constant fascination with the leadership”.

“Some politicians down here act like every time they have a disagreement with the missus, they file for divorce,” he said.

“We should get over ourselves and just get back to doing our jobs, which is to help make this great country even better.”

NSW Nationals Senator John Williams supported a point made by Mr Abbott last week that the Coalition is not the Labor Party and they “don’t change leaders”.

“The Australian people only have that right,” he said.

Queensland Nationals MP George Christensen said as a member of the Federal Parliamentary National Party, he doesn’t get to vote on the Liberal Party leadership.

“However, if the Liberals change their leadership next week, the Nationals will seek a new Coalition agreement and a new deal for rural and regional Australia,” he said.

Tasmanian Liberal senator Eric Abetz said Tony Abbott and Julie Bishop had been a very successful leadership team and retained his support.

“They delivered us the election victory in 2013, they have secured our borders, removed the carbon tax achieved the free trade agreements,” he said.

“They’re the team the people of Australia elected and that’s the team I will be supporting.”

Nationals Leader Warren Truss again deflected questions about his party’s support for Mr Turnbull as a potential Prime Minister due to his views on carbon trading.

“Well, we’re not there yet and we need to make sure that we never cross that threshold,” he said.

“The reality is that a government does need to be strong and united.

“I think it’s very important that the Liberal Party resolve its leadership issues promptly, that they do it decisively so that the issue can be put behind them and the government and we get on with the business of delivering for the Australian people.”

Nats back Abbott as PMMr Truss said the Nationals backed Mr Abbott’s leadership at their planning meeting in Wodonga last week.

“We remain supportive of Tony Abbott and I’m confident that his prime ministership will be renewed,” he said.

“The commitment that we gave to the Governor-General to support the establishment of the new government was to Tony Abbott and that commitment was one that I made on behalf of the Nationals and Tony made on behalf of the Liberal Party.

“So, clearly, if in fact there were to be a change of leadership, well that agreement would no longer be of value and new arrangements would have to be established.

“At this stage, the spill is hardly credible if there’s not an alternative candidate.

“The reality is that Tony Abbott and Julie Bishop are standing together as Leader and Deputy Leader of the Liberal Party.

“That’s a very powerful team.

“There’s too much important work to be done to be spent on internal discussions of this nature.

“It’s been raised now, it needs to be dealt with promptly and then we need to get on with the job of delivering for the Australian people.

“I don’t think Tony Abbott will lose the leadership.”

Industry and Science Minister Ian Macfarlane said he would also be voting against the spill motion and the leadership argument was, “a distraction no one wants and no one needs”.

“Australia doesn’t need this, the Coalition obviously doesn’t need it,” he said.

“We need to get on with business, we need to be making sure that we’re providing the sort of legislative change that keeps our economy strong and keeps jobs growing in Australia.

“The Cabinet is absolutely unanimous in the support of Tony Abbott as Prime Minister. We need to get on with it.

“I haven’t spoken to backbenchers other than those that have rung me, and those that have rung me have not only expressed their total support for Tony Abbott but their complete dismay that the Coalition is being distracted at this important time in a government’s life.

“To my knowledge there is a handful, maybe 10 or 15 people at the bottom of all of this out of a party room of over 100.

“The support for Tony Abbott in the Cabinet is unanimous and we just need to get this behind us and get on with the job.”

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San Francisco 49ers convert Jarryd Hayne inspires Brumbies recruit Chris Coyle

Tight end Chris Coyle in action for the Arizona State Sun Devils. Photo: Christian Petersen Jarryd Hayne has inspired Chris Coyle in his dream of transitioning from the NFL to Super Rugby. Photo: Graham Tidy
Nanjing Night Net

The Hayne Plane might not have fully taken off yet in the NFL, but he’s the wind beneath the Super Rugby wings of  ACT Brumbies project Chris Coyle.

Coyle is trying to do almost the reverse of Jarryd Hayne – switching from American football to rugby union, instead of from rugby league to the NFL.

Injuries prevented Coyle from making it in the NFL, where he spent five days with the Houston Texans before he was released due to a shoulder problem.

It was the catalyst for the 24-year-old to code-hop his way Down Under, while the Hayne Plane left Aussie shores to chase his NFL dream.

Coyle has liked what he’s seen of Hayne’s fledgling career, after the former Parramatta Eel made his debut for the San Francisco 49ers last week. He felt if Hayne could keep himself fit then there was no reason why he couldn’t make a go of it.

“If he can secure himself a spot on special teams, which I think he absolutely can because of the type of athlete he is, [he can make it],” Coyle said.

“The biggest thing for him is he’ll have to stay healthy because he’s definitely good enough of an athlete to be there.”

And if Hayne can do it, there’s no reason Coyle can’t make a similarly successful switch to Super Rugby.

He played mostly second grade with the Gungahlin Eagles in the John I Dent Cup this year but managed to force his way into the seniors towards the end of the season.

Coyle is training with National Rugby Championship team Canberra Vikings, where he’s worked closely with Ita Vaea and Wallaby Ben Alexander.

“It is inspiring to see a guy like him go over there and conquer a sport that’s so incredibly difficult for everybody over there [in the US] that’s played their whole lives and he’s gone over there and made it to a professional level,” he said.

“It does give me hope I could pick up rugby and play here some day.

“Physically, I definitely think I can compete with these guys out here at a professional level, it’s just finetuning the mental aspect of the game.”

Vikings coach Brad Harris said Coyle had been training well and had the right work ethic to succeed.

He was unsure whether the former American footballer would break into the Vikings side this NRC season, but he felt there was a chance he could play Super Rugby some day.

“It’s a massive step, even our club boys understand the step to NRC and obviously there’s another significant step up to Super Rugby, but he’s certainly an athlete, he’s certainly in a great program and he’s improving so if he continues on that trajectory then anything is possible,” Harris said.

The undefeated Vikings will play the struggling North Harbour Rays in Sydney on Saturday.

NRC ROUND 6

Saturday: Canberra Vikings v North Harbour Rays at Pittwater Rugby Park, 3pm

Vikings team: 1. Allan Alaalatoa, 2. Albert Anae, 3. Leslie Leuluai’ali’i-Makin, 4. Rory Arnold, 5. Blake Enever, 6. Jordan Smiler, 7. Jarrad Butler (c), 8. Ita Vaea, 9. Joe Powell, 10. Christian Lealiifano, 11. Jerome Niumata, 12. Rodney Iona, 13. Nigel Ah Wong, 14. James Dargaville, 15. Aidan Toua. Reserves: 16. Robbie Abel, 17. Sione Taula, 18. Tyrel Lomax, 19. Dean Oakman-Hunt, 20. Rowan Perry, 21. Brent Hamlin, 22. Isaac Thompson, 23. Francis Fainifo.

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Port of Darwin expansion flagged

POLITICS has rarely been so interesting – or unnerving – for infrastructure investors.
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While Queensland’s dramatic election saw $50 billion in potential privatisations go up in smoke, infrastructure funds have also kept one eye on Northern Territory’s on-again, off-again leadership spill in light of Port of Darwin’s planned sale.

The port, which cattle exports to Asian countries, makes about 90 per cent of its money from dry bulk exports for the metals and mining industry.

This week starts with NT chief minister – and Port of Darwin privatisation supporter – Adam Giles still in the chief minister’s chair, despite what at first appeared to be a successful challenge from Willem Westra van Holthe.

Infrastructure funds are back working on the assumption the Flagstaff Partners-run sale will go ahead, and are getting stuck into diligence materials.

A new contender is believed to be South Australian ports owner and operator Flinders Ports, owned by a handful of superannuation funds which are shareholders of the Flinders Port Holdings Pty Ltd entity.

It’s understood these shareholders, which include Infrastructure Capital Group, mechanics’ superannuation fund MTAA, Equipsuper, State Super NSW and Statewide Super, and their respective advisers such as Whitehelm Capital and AMP Capital, have decided to go to auction through the Flinders Port vehicle.

Rather than potentially bid against each other for Port of Darwin, it’s understood the group has asked Flinders Port management to take a look on their behalf.

Flinders Port is expected to line up against the likes of infrastructure fund managers Palisade Investment Partners and Deutsche Asset and Wealth Management.

Darwin Port Corporation, which runs the port, made a record $17 million profit in the 2013-14 financial year, on $58 million revenue. Earnings before interest, tax, depreciation and amortisation were $17 million, compared with $11 million a year earlier.

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ARL Commission chairman John Grant says NRL grand final likely to go on the road after 2019

Looking ahead: ARL chairman John Grant. Photo: Adam McLean​Which NRL club are you? See who you should really followThe world’s greatest NRL quiz #6 Vote for the MVPs of 2015
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Sydney’s iron grip on the NRL grand final may be prised open after 2019, according to ARL Commission chairman John Grant, with the season showpiece likely to go on the road once every three years once the deal with the NSW government expires.

The move opens up the possibility of a grand final at Brisbane’s Suncorp Stadium, which Grant also said stood to play host to a second team in the region to take on the might of the market-dominating Broncos if the game adds a 17th side in 2018.

In a revealing press conference after announcing new NRL offices in the Queensland capital, Grant said the Sydney monopoly on the traditional grand final could come to an end if rival governments came to the party with offers to host the game.

It is a highly topical issue given the prospect of two Queensland teams in the grand final as the Broncos prepare to host the Roosters and the Cowboys travel to Melbourne, all playing for a spot in next weekend’s finale.

NSW premier Mike Baird recently announced a $1 billion injection into Sydney stadia development, which NRL chief executive Dave Smith said would ensure it remained at the head of the queue for marquee matches.

But Grant was nudging Queensland to put its chips on the table, saying any upgrades to Suncorp Stadium would provide food for thought as the NRL laid out its future grand final plans.

“The NSW government has made commitments around stadia in Sydney and it will be reliant on having headline content,” Grant said.

“Similarly, there are discussions now about upgrading what is still the best special purpose rugby league stadium in Australia (Suncorp Stadium), if not the world.

“We will make sure we are responsive to the governments that are investing. We have to keep our options open but there are commitments being made.

“We use the State of Origin on a three-year cycle to launch rugby league and confirm league’s position elsewhere in the Australian community. We will do the same with grand finals and other big events.”

The Queensland government has been reluctant to add Wi-Fi and new screens to Suncorp Stadium, which many feel could start to be left behind as other cities modernise and expand their venues.

It can technically be expanded from its 52,500-seat capacity but that doesn’t appear to be on the radar. In any case, simply adding seats doesn’t always increase financial gains, with clever pricing structures one way of leveraging competitive returns.

Still, the stadium remains the envy of many. It is set in a prime inner-city position, has a world-class atmosphere, a long history and is surrounded by bars and restaurants that amplify the game-day experience.

“Capacity is one [thing] and what we create in Sydney for the grand final at ANZ Stadium is an event,” Grant said. “What we create at Suncorp is an opportunity to see rugby league played at its highest level.

“It’s about configurations but we’ve got a 52,000 capacity here … that is a very good crowd, you know what it is like in State of Origin. To get that intensity in this stadium with everyone being able to see what is happening on the field, I think that is a big plus.”

Grant also gave the strongest hint yet that the south-east region of Queensland was leading around the home turn in the race for the next NRL expansion slot. A number of bids are running in Brisbane, as well as in the greater west at Ipswich, a noted league heartland.

“I think south-east Queensland,” Grant said. “Queensland has multiple centres of high density and we have to make sure our NRL and Queensland Cup teams are appealing to those communities.”

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Float call for Van Diemen’s Land

VETERAN stockbroker Hugh Robertson of Wilson HTM has called for a public float of one of the nation’s oldest and largest dairy companies.
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Mr Wilson is a minority shareholder in the Van Diemen’s Land Company (VDL) – established in Tasmania under an 1825 Royal Charter granted by King George.

VDL owns 25 dairy farms – including the historic Woolnorth property – which houses the Roaring 40’s wind farm. It also has a heifer rearing operation. It has about 26,000 dairy cows on 19,000 hectares, making it the nation’s single largest milk supplier.

VDL for the past several years has failed to attract a needed capital injection. Several interested parties have looked – including The Chinse Investment Corporation.

Mr Robertson, who invested in VDL 20 years ago, approached VDL recently. “I’ve approached them to do an IPO. I just hope it doesn’t get sold as a block. I hope the New Zealanders consider an IPO through us [WilsonHTM], or someone else,” he said.

VDL’s indirect majority shareholder at 98.4 per cent is the New Plymouth District Council, managed through Taranaki Investment Management. VDL is controlled by parent company Tasman Farms.

“My view has always [been] that it’s a company that needs external capital, and what’s happened historically is the majority shareholding has been whipped around,” Mr Robertson said.

“This is probably a company that should be in the public domain. It’s a gargantuan dairy farm that has lots of potential. The thing to do would [be to] list it and take advantage of capital markets, and get money to develop it properly. It would be a bloody shame if it were sold to the Chinese. It’s an interesting asset and a hidden value that is the brand VDL.”

VDL, however, is a current takeover target by the newly formed shell entity, Tasmanian Land Company: a wholly owned subsidiary of BDO Agricultural Services, set up by Melbourne accounting firm BDO Australia.

TLC has offered $2 a share, a 45 per cent premium to the VDL net tangible assets as at 31 May 2014, of $1.375 per share. The NPDC is taking scrip in TLC, while many smaller shareholders are taking cash. Parties involved said it’s purely about shaking out smaller shareholders and a restructure of the highly complex company, which has been a hurdle in securing an investor.

VDL deputy chair Miles Hampton is recommending the offer, although there has not been any independent valuation. “A number of possible investors have been turned off by the complexity of the company and wanted to have clarity,” he said. “It’s well-known VDL is looking to raise capital to fund an expansion and we are advised that re-arranging the corporate structure this way will increase the chances of raising capital. We are still looking to raise $120 million.”

VDL will still operate under the Royal Charter but its new parent company will be Australian, and Australian corporate law will apply, he added.

Mr Hampton confirmed BDO is not acting for any other bidder and the only shareholders in TLC are those shareholders who take scrip.

Taranaki Investment chief executive Michael Trousselot, who is also on the board of VDL, said the group remains in talks with possible partners.

“We will move [to] 100 per cent [ownership] eventually. We have got CA agreements now, and we are in discussions with them now.” Mr Trousselot declined to talk about takeover speculation or whether VDL would suit the public market, but later said an IPO may be a future consideration.

A source said former VSL chief executive Mike Guerin, who left last March amid disagreement with the board, has been approached by several possible VDL suitors to be CEO if they were successful in a takeover.

According to recent filings, VDL had record milk production of 6.72 million kilograms of milk solids and a bounce back in livestock valuations in 2014. The 2013 year was difficult when the value of livestock plummeted and the group borrowed $1.7 million from Fonterra Australia. VDL parent company Tasman Farms has a $64 million revolving credit facility with Rabobank. Its next review date is November 30.

This story Administrator ready to work first appeared on Nanjing Night Net.

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Cows v sugar in WA grazing lease talks

CPC chief executive Troy Setter confirmed that discussions were taking place with Shanghai Zhongfu over a 9600-hectare grazing lease on the Ord River.CHINESE real estate giant Shanghai Zhongfu is in discussions with one of Australia’s largest cattle producers Consolidated Pastoral Company (CPC) to take over a major leasehold in the Ord River area, intending to expand cane production.
Nanjing Night Net

All pastoral leases in Western Australia are due to expire in June this year creating a frenzy of new deals and renewals.

In 2012, Shanghai Zhongfu, trading as Kimberley Agricultural Investments, was controversially awarded a prized 50-year development lease in the east Kimberley on the Ord scheme’s second-stage expansion.

The company, which employed former prime minister Bob Hawke as its Australian lobbyist, is developing 15,200 hectares of the Ord West Bank into canefields and wants to build a sugar mill near Kununurra. It needs more land and canefields to make the mill viable.

CPC chief executive Troy Setter confirmed that discussions were taking place with Shanghai Zhongfu over a 9600-hectare grazing lease on the Ord River called Mantinea Plain.

“We have had discussions with various operators about developing northern [Western] Australia including the Ord,” Mr Setter said.

“We have not done a deal yet with [Kimberley Agricultural Investments] but they are our neighbours and we are always in discussions with them.”

The Western Australian government is tendering out the grazing lease of Mantinea Plain for major development. Consolidated Pastoral will be wanting to a deal with the winner of the tender to maintain its cattle herd on that property.

Mr Setter denied that CPC and Shanghai Zhongfu were working on a more substantial deal including the sale of the cattle company’s freehold property Carlton Hill or other parts of the business.

Barclays Capital is advising London-based private equity group Terra Firma on its ownership of the CPC business and certain approaches that have been made to buy it.

Barclays has previously advised on multiple sugar-related business transactions in Australia including Mitr Phol’s Maryborough Sugar Factory purchase. Since confirming that advisers had been appointed, Consolidated Pastoral contracted to buy the much-heralded Bunda Station of the Victoria River District, Northern Territory for about $15 million.

The 178,800-hectare station owned by the Underwood family sits adjacent to CPC’s Kirkimbie Station on the Western Australia border. That sale is yet to settle.

The $700 million Consolidated Pastoral, which in March had about $418 million in equity, controls 19 properties across Australia’s top end, covering more than 5.6 million hectares.

The company’s leasehold properties have slipped in value from $311 million to $295 million, according to accounts filed with the corporate regulator.

Freehold land value was unchanged at $93 million.

This story Administrator ready to work first appeared on Nanjing Night Net.

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Valuation boost for Linkletters estate

THE value of the 8900-hectare Linkletters estate in Esperance in the Western Australian wheatbelt, the sole remaining rural asset of the ASX-listed Agricultural Land Trust, has been boosted by 37 per cent following an independent valuation.
Nanjing Night Net

The January valuation lifted the book value of the estate by $4.75 million to $17.65 million.

Justin Epstein, director of fund manager One Investment Group, which manages the trust on behalf of its biggest shareholder, the powerful West Australian landholder Allen Caratti, was unavailable for comment – the agricultural trust’s accounts are being audited ahead of the publication of December half-year results.

Last August Mr Epstein told The Australian Financial Review that a rehabilitation of the estate over about 18 months – by removing the blue gum plantations and returning the property to cropping and grazing use – would see its value increase from $12.9 million (its June 2014 book value) to between $28.5 million and $29 million.

The Agricultural Land Trust, once controlled by rural group Elders, was one of the major players in the forestry-managed investment schemes before the dramatic collapse of operators such as Great Southern and Timbercorp saw forestry values plummeting. The trust has a $10 million syndicated loan facility maturing in 2016 to pay for the remediation of Linkletters.

“Our priorities are to remediate Linkletters, lease it out and also to streamline the operations of the trust,” Mr Epstein said six months ago.

“We think Linkletters is an amazing property. No listed agricultural trust has this level of opportunity, but it requires a little bit of vision,” he said.

A sale of Linkletters has not been ruled out either but Mr Caratti, who owns 61 per cent of the trust, would prefer to lease out the property. The January valuation uplift would suggest Linkletters was benefiting from the first stages of this rehabilitation as well as from its prime location in Esperance.

“In cropping, Esperance is considered a premium region,” said one agribusiness valuer.

A February report by valuers Herron Todd White noted increasing confidence in the WA wheatbelt.

“The majority of wheatbelt farmers have now finished their harvest with many achieving above average results and higher than expected yields. This has seen confidence increase and activity in the property market increase with two good years now under their belts,” said Herron Todd White.

Linkletters is named after US television host Art Linkletter, who developed the estate in the 1950s. It was acquired by the Agricultural Land Trust nine years ago and planted with blue gums, before the sector slumped.

This story Administrator ready to work first appeared on Nanjing Night Net.

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Low activity forecast in ERF auctions

THE government’s direct action scheme is likely to see little interest from new carbon emission reduction projects in its first few rounds of auctions, which could limit the total amount of carbon savings gained in the early stages of the scheme’s operation.
Nanjing Night Net

The Clean Energy Regulator is due to conduct the first auction for projects bidding for money from the ­$2.55 billion Emissions Reduction Fund (ERF) in early 2015, with no firm date yet announced.

The first auction may be conducted without the publication of a ­”benchmark” price, below which bids will need to be priced in order ­to succeed.

Elisa de Wit, partner and head of ­climate change at law firm Norton Rose Fulbright, who has been advising ­clients interested in ­participating in the Fund, said she did not expect much activity from projects that were not already part of the ­pre-existing Carbon Farming Initiative.

“Because there is still a large amount of uncertainty about what that priority is going to be, in the first auction, I think a lot of people are just going to wait and see,” Ms de Wit said.

Many of the approved methodologies that are eligible for money from the ERF depend on so-called aggregation – where a number of small projects are gathered together by an external party in a ­single bid.

The National Farmers’ Federation president Brent Finlay said many of his members were wary of signing up to the aggregation schemes.

“There are lots of costs involved and financial risks for farmers.

“Those risks include the problem of encountering unscrupulous ­aggregators, the snake oil salesmen. “Under the rules of the ERF, farmers must partner with an aggregator.”

Many of the technologies the ­government is hoping the agriculture sector will employ, including so-called “soil carbon” where emissions are sequestered in the ground, are not yet ready for deployment, Mr Finlay said.

“They’re still in an embryonic phase of research and development.

“If the government is serious about ensuring that the ERF will provide opportunities for agriculture, we need ongoing funding for the research and development of cost-effective ­methods,” Mr Finlay said.

A 2014 Climate Change Authority analysis of the Carbon Farming ­Initiative, which is the predecessor of the Emissions Reduction Fund, found the most common methodology was landfill and waste treatment projects, followed by forestry.

This story Administrator ready to work first appeared on Nanjing Night Net.

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