Digital connectivity is bush’s new frontier

Ag competitiveness falls into connectivity gap says Ruralco


Agribusiness
Ruralco Holdings chairman, Rick Lee and managing director, Travis Dillon, at the company's Perth annual conference.

Ruralco Holdings chairman, Rick Lee and managing director, Travis Dillon, at the company's Perth annual conference.

Aa

Ruralco Holdings is lending its business clout to to farmers’ calls for better connectivity

Aa

BUSH telecommunications are the “next frontier” for Australian agriculture according to the head of one of the country’s leading agribusinesses.

Ruralco Holdings chairman Rick Lee told its ‘shaping the future’ themed annual conference in Perth last week the company would lend its considerable size and strength to farmers’ calls for better “connectivity”.

About 1000 employees and representatives from its 500 locations national CRT/Ruralco network, comprising 45 business units across Australia, attended its two-day 29th conference which opened Friday with a breakfast addressed by Mr Lee and managing director and chief executive officer Travis Dillon.

Mr Lee said the speed of technological change “is profoundly influencing the future of agribusiness”.

He listed increasing automation, drones, “big” data collection and management and direct selling as some of the areas of agriculture already changing rapidly due to technology.

As a company, we believe the future success of agriculture hinges on access to connectivity in rural and regional areas - Rick Lee, Ruralco

While CRT/Ruralco’s ‘Future Farming Strategy’ and focus on innovation positioned it well “to play an active role in the changing dynamics of our industry”, there was another problem impacting on its clients’ ability to adopt technological advances, he said.

“Telecommunications represents the next frontier for agriculture.

“As a company, we believe the future success of agriculture hinges on access to connectivity in rural and regional areas,” Mr Lee said.

“Farmers across the world are readying themselves for the next revolution in agricultural productivity.

“In Australia, there is still a major hurdle to achieving this – connectivity,” he said.

“To be competitive on a global scale, our farming communities need access to NBN (National Broadband Network) and telecommunications which service their needs and bring opportunities to the bush.

Powerful voice

“Ruralco can be a powerful voice to ensure farmers’ needs are not overlooked so that Australian agriculture can reach its full potential, and we are working with government and private enterprise to make this happen,” Mr Lee said.

His comments on the importance to agriculture of further improvements in telecommunications coverage in rural and regional areas, particularly in WA, were echoed by Mr Dillon.

Existing technology for many simple labour-saving tasks on regional properties, like remote monitoring of stock watering points, were rendered useless for many farmers because of a lack of connectivity, he said.

There was some evidence from farmers that the Sky Muster communications satellites launched in 2015 and 16 for NBN Co Ltd had improved the situation in regional and remote areas but there was “still a lot of gap”, Mr Dillon said.

We’ve had an online ordering system for more than a decade now but this (Ruralconet) is more than an ordering system. - Travis Dillon, Ruralco

He said “AgTech (a Ruralco project) investment” via start-up companies was also working on developing reliable on-farm telecommunications access and potentially CRT/Ruralco “should be a distributor of that tech”.

Mr Dillon said CRT/Ruralco was spending $5 million to upgrade its own connectivity with its members and retail outlets through an on-line business portal called Ruralconet launched in December.

“We’ve had an online ordering system for more than a decade now but this (Ruralconet) is more than an ordering system.

“It has product information, supplier contacts, it’s a full service enabling a product to be ordered from a CRT/Ruralco supplier anywhere in Australia and delivered to a client with the transaction taking place electronically,” he said.

Investment, innovation and integration were the three strategic priorities of CRT/Ruralco’s Future Farming Strategy and, Mr Dillon said, its approach to innovation had three main areas – digital transformation, agricultural technology distribution, known as AgTech, and creation of an innovation business culture

“We are integrating innovation into the core of the business, our goal is to make Australian farmers more productive and efficient, to increase yields and to add value to farm operations,” he said.

A $13m program called Elevate was heading the digital transformation – with $10.2 million spent during the year, Mr Dillon said, and Ruralconet was one of nine projects as part of that program.

About half of the CRT rural supplies network sites are owned by Ruralco and the remainder were operated by independent network members.

“We’ve looked to grow our base by attracting existing member businesses to come over to Ruralco, and we’ve also acquired businesses not previously part of the network,” Mr Dillon said.

During the past year it acquired “a portfolio of high quality businesses”, including five CRT member sites in WA, NSW and Tasmania, with a $65m capital raising in February last year funding the acquisitions, he said.

Mr Dillon outlined the company’s record results for the year to September 30, 2017, to the conference.

Good ag times

This included an underlying EBITDA (earnings before interest, tax, depreciation and amortization) profit of $65.4m, an increase of 58 per cent on 2016, and a net profit after tax of $26.2m, up 95pc on the previous year.

“What has been driving good returns for farmers and good returns for us is the new floor in commodity prices – we’ve never seen that before with record cattle prices, sheep prices, lamb prices, wool prices and horticulture markets are all pretty buoyant as well.

“I’ve been in the industry for 25 years and the message has been that the South East Asian boom and the demand for Australian produce will eventually come and that will provide better returns for growers, and that’s exactly what we are seeing over the last few years, and long may it continue.

“The signs are, and it’s pretty well common sense, that population growth and the move from basic incomes will drive the opportunities for Australia to capture that, and I think it’s here to stay but at what level all these commodities settle out at is the unknown.

“There’s still lot of scope to grow our business, we’re early days in regards to our water strategy - we’re the largest water services provider in the country but there’s still a lot of gaps in our footprint that we can look at - and we will still be investing in our traditional livestock agency and rural supplies businesses,” Mr Dillon said.

Aa

From the front page

Sponsored by