LOCAL stock agents are confused by an unusual move by Regional Livestock Exchanges (RLX) to enter into a long-term lease of the Camperdown Saleyards.
On its own it wouldn’t be a viable proposition if it didn’t have co-location to our main investment site in the area in order to provide the required scales of economy.
- Garry Edwards, Regional Livestock Exchanges
Offering less the 25,000 head of cattle this financial year, the Camperdown throughput ranks poorly against the six other saleyards managed by RLX that boast an average cattle throughput of 136,600 head annually.
The lease of the South-West saleyard facility was announced late last week, following a public expression of interest process by the Corangamite Shire Council.
In a statement, the council said Camperdown Saleyards would operate under new management, and be renamed the Corangamite Regional Livestock Exchange (CRLX). The first sale will be held on Tuesday, 29 May.
The lease of the saleyards is part of an expansion strategy of RLX’s network into southern and western Victoria.
Despite not knowing about the lease arrangement prior to its announcement, Camperdown Stock Agents Association president Tim Healey said the move would be positive for the local district.
“We are shocked but extremely grateful someone has put their hand up to continue the operations of the Camperdown Saleyards,” Mr Healey said.
“We have a large dairy cow component to our sales and our local dairyfarmers should be delighted as the alternative wasn’t looking great.”
The lease of the saleyards is part of RLX’s expansion into southern and western Victoria. RLX is managed by AAM Investment Group whose subsidiary Regional Infrastructure Pty Ltd (RIPL) previously bid to operate private regional saleyards in the south-west.
AAM Investment Group managing director Garry Edwards said the decision to lease Camperdown was to deliver economies of scale off the back of its main south-west operation at its new Central Victoria Livestock Exchange (CVLX) on Ballarat’s outskirts, which is due to open in mid year and replace nearby the existing Ballarat yards in Delacombe.
“We have identified there is a niche in the supply chain in the extensive dairy herd located south of the Princes Highway that is unlikely to make its way to Ballarat,” Mr Edwards said.
“What we’ve done is an expansion of our strategy of deploying more capital – capital that we’ve found particularly slow to release.
“And while we have invested in six much larger saleyards throughout Eastern Australia, we’re not getting as much investment into this industry segment as we’d like to get.”
Mr Edwards said their strategy was to include peripheral sites, such as Camperdown, which already had a captured market of throughput, and utilise it as a satellite around its main investment – in this case being Ballarat, “to expand our overall business opportunities”.
“We’re not expecting Camperdown will turn into a CVLX or even a Mortlake, but we do believe it will service a niche within the dairy industry,” he said.
“On its own it wouldn’t be a viable proposition if it didn’t have co-location to our main investment site in the area in order to provide the required scales of economy, and in this case utilising the staff from Ballarat at Camperdown.
“And there are various things we can do to upgrade Camperdown in order to reduce our exposure, like the water cost and effluent management.”
Mr Edwards said RLX had been in discussions with Camperdown for about four years, after originally approaching Warrnambool.
“Our first occasion was in conjunction with Warrnambool, which didn’t go ahead, but we’ve always maintained a dialogue with Camperdown,” he said.
“The change of our internal strategy has enabled this lease to occur.”
He said there had also been discussions with other regional areas.
“We can quite openly say we have had discussions with Wangaratta, who chose not to take us up on our proposal,” he said.
“We did look at that as part of a broader strategy where we could create greater scales of economy.
“At this point Wangaratta has decided to go in a different direction.”
There has been criticism from local stock agents that that RLX had not consulted with them prior to the lease agreement being finalised.
Mr Healey said agents associated with the selling centre were not told about the proposed change until they were invited to participate in a photo opportunity at the saleyards last Wednesday.
“We knew nothing about it at the time,” Mr Healey said.
“We hadn’t been advised by council of the planned change and we certainly hadn’t had contact with RLX to advise they are taking over.”
Mr Edwards admitted discussions with Camperdown agents had only begun recently.
He said it had been difficult to meet council requirements and also deal with the saleyard’s principal stakeholders – its stock agents.
“This happens everywhere we go, it is a significant challenge when dealing with councils,” he said.
He said he would have liked to have spoken with agents months ago, but was unable to do so without council permission.
Corangamite Shire Councillor and Saleyards Advisory Committee chair Simon Illingworth said the long-term lease was “a vote of confidence” for the saleyards.
“RLE has a proven track record of investing in and improving regional saleyards across Australia,” Mr Illingworth said.
“This long-term deal means stability and security for our farmers and stock agents, who will be able to get on with the job and continue to make it a great place to do business.”
RLX expects that the CRLX will undergo a range of improvements in coming years, including transitioning the site into a soft floor facility, improving onsite water usage and enhancing operational efficiencies.
However agents around the region are skeptical about whether these improvements will occur given the declining patronage and number of head sold at the saleyard facility.
Saleyard lease ‘throws’ plans for South West
Reaction to Regional Livestock Exchanges’ (RLX) lease of the Camperdown Saleyards has been deemed “bizarre” and “confusing” by industry insiders.
With RLX’s soon to be completed CVLX saleyards near Ballarat to open in August, the lease of the selling facility throws a spanner in the works of plans for the greater South-West region.
Elders southern region livestock manager Peter Homann said the decision to extend the life of the Camperdown Saleyards did not make sense.
“The new Mortlake yards are now operational but none of the region’s existing yards have expressed any interest in ceasing activities,” Mr Homann said.
“The idea of Mortlake was to concentrate saleyard operations and enhance buyer participation at markets rather than divide it. It essentially adds more markets and divides the supply of saleable cattle.”
The $16 million new Western Victoria Livestock Exchange (WVLX) at Mortlake is owned by SELX Pty Ltd, based in Yass, NSW, and was completed earlier this year.
AAM Investment Group managing director Garry Edwards - the company which manages RLX – said SELX developed WVLX without consultation or cooperation of existing selling centres nearby, at Camperdown and Warrnambool.
“The investors in Mortlake made their decisions on their own assumptions and obviously we’re making our own decisions on a commercial basis,” he said.
“The investors in Mortlake staked their claim in the area, but we will be looking for further synergies around what we have at Ballarat because the more that we can scope from that facility, the more we can keep the costs down for everyone involved.”
He said RLX intended to expand operations in southern and western Victoria.
“We’ve been involved in investing in these type of structures for over 10 years now. We will continue to expand.. with these very long-term commitments of 25 years,” he said.
“Our initial target of the amalgamation of the Camperdown and Warrnambool businesses into one new saleyard facility didn’t get the support from that area. That has changed with the change to our expansion strategy. We will continue to look at opportunities where we can cost effectively get greater exposure.”