Wellard boss quits as export strategy revamped

Wellard chief Fred Troncone leaves, again, after export strategy rethink


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Wellard will consider selling it's MV Ocean Drover because tighter live export shipping regulations could make the purpose built vessel more attractive to another owner.

Wellard will consider selling it's MV Ocean Drover because tighter live export shipping regulations could make the purpose built vessel more attractive to another owner.

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Livestock shipper re-arranges top deck chairs, re-sets export plans and may sell vessel

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Livestock shipper, Wellard, is rearranging the deck chairs again following the sudden departure of recently re-recruited operations executive director, Fred Troncone.

The West Australian live export business is also looking to beef up its charter operations from South America to help rebuild its balance sheet after a two-year slump in earnings from Australian sourced cattle.

Mr Troncone, who joined Wellard Limited’s board in June last year, became the operations executive on a $682,850 annual salary soon after, in September.

He was previously chief executive officer of the then privately-owned West Australian-based Wellard Rural Exports from 2011 to 2015, departing prior to its public float almost three years ago.

His past experience with the livestock exporter also included being general manager of its South East Asia business in 2009 and 2010.

Mr Troncone said Wellard’s immediate short term focus on chartering ships for the South American live cattle trade to Europe and a narrower Australian trading strategy in South East Asia should be implemented by a new senior manager.

Chief business development officer, Scot Braithwaite, will also leave Wellard at in October to “pursue other opportunities”.

Rethink on sheep, South America

Indications are the company has now frozen any plans to expand its own South American trading activities to Asia or Europe, or get too involved in live sheep exports for the time being.

In fact, tighter Australian shipping regulations, particularly for sheep, mean Wellard will consider offers for the potential sale of its livestock ship, MV Ocean Drover.

The latest strategy shift in South America comes despite Wellard successfully exporting its first cattle consignment from Uruguay to China – the largest recent shipment between the two countries.

Fred Troncone

Fred Troncone

The deal involved 9265 Angus heifers bought and freighted by Wellard in a 30-day voyage from Montevideo to Lianyungang in China.

Company chairman, John Klepec, took over as interim executive chairman this week, managing Wellard’s day to day operations in partnership with chief executive officer, Mauro Balzarini.

His $31,000 a month contract runs until the end of 2018, paid on top of his current director’s fees of 235,000 a year.

He said the company was undergoing a strategic refocus, although Wellard’s strategic themes remained principally as a cattle trader and a charterer.

Its cattle export division would concentrate on trading Australian-sourced stock to South East Asia, where Wellard has traditionally been the dominant supplier.

With Australian cattle prices stabilising after hitting record highs last year, Mr Klepec said buying opportunities were more attractive and the company was receiving increased interest from South East Asia.

It wanted to regain market dominance in this core trade.

RELATED READING: Wellard’s slow boat to recovery

Mr Klepec, previously Hancock Prospecting’s chief development officer before joining Wellard’s board in 2016, thanked Mr Troncone for a significant contribution as a director and subsequently as Wellard operations chief.

Mr Troncone had helped stabilise the business during difficult market conditions, and managed a successful costs out program.

Vessel bookings strong

Mr Klepec said there were no material changes to Wellard’s business outlook and trading conditions for the near future, with vessel demand booked strongly until December.

However, he said emerging demand for large, modern livestock vessels created by tighter shipping regulations in Australia meant the company would consider any offer to buy the Ocean Drover, if the deal provided a superior return on equity for shareholders on a long-term basis compared to operating the vessel itself.

No specific negotiations were flagged as being in the pipeline, but Mr Klepec would tell the stock market if a transaction was agreed.

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