Despite a run of tough seasons across many parts of rural Australia, farm services business, Landmark, is proving to be a bit of a gem in the global portfolio of super-sized Canadian agribusiness, Nutrien.
While persistent rumours just a year or two ago suggested the parent company was set to offload the Australian arm it had bought when AWB Limited collapsed in 2010, Landmark has actually turned into one of the Nutrien stable’s best growth performers.
The local business model and its experiences are also increasingly set to contribute to Nutrien’s expansion in South America, particularly in the promising Brazilian crop and livestock marketplace.
In the crop protection and merchandise categories alone, Landmark’s total sales rose almost $200 million in the past four years, or 18 per cent.
On a compound basis, crop chemical and merchandise revenues grew 3pc and 5pc respectively.
Even in drought conditions Landmark's still performed very strongly, surpassing expectations
The extra turnover was partly attributed to Nutrien’s expanding Loveland house brand chemical range on the Australian market.
“There’s a lot to be pleased with in Australia, across all aspects of the business,” said Nutrien’s vice president of investor and corporate relations, Richard Downey.
“Even in drought conditions it’s still performed very strongly, surpassing expectations.
“There’s also scope to use our Landmark experience in South America.
“It has lots to offer other parts of the Nutrien business in other parts of the world.”
Landmark’s network of 300-plus selling agency, merchandise, agronomy, wool marketing and financial services operations gained about 440 new staff in rural Australia during 2018, including the team at prominent NSW-Victorian agency firm, Paull and Scollard, based at Albury, absorbed by the group in early December.
The company, lead by former NSW Central West jackaroo, Rob Clayton, has payroll now total about 2000.
“We’ll continue to invest in new business opportunities in Australia, and register more Loveland products to provide greater choice to our customers and help secure our business bottom line,” said Mr Downey.
He was in Australia meet with significant shareholders and Landmark staff.
He said suggestions the global company had ever been shopping for a buyer for Landmark in recent years were not true, although conceded “there may have been somebody knocking at the door”.
“Agrium (Nutrien) was never looking for a buyer.”
“In that situation you have to at least talk, but there was never much to consider beyond that point,” he said.
“Agrium/Nutrien was never looking for a buyer.”
Aside from strong speculation about rival farm services suitors moving in on the business, the Lempriere wool marketing and agricultural property group reportedly reached the due diligence stage of a potential $1.2 billion buyout in 2016, before turning away.
Nowadays Landmark’s performance experience was giving the Calgary-based Nutrien incentives to look more broadly at its business options in Canada, the US and particularly South America.
Nutrien, largely a farm fertiliser, farm chemical maker and crop inputs retailer in North America, also has chemical and fertiliser retail operations in Chile, Argentina and Brazil where it also makes crop protection products.
However, Brazil, a big grain industry player, also with its huge cattle herds and grazing areas, represented big growth potential - up to $1b in total turnover by 2021, Mr Downey said.
“We’re looking at Brazil as a chance to adopt the Landmark learnings as our footprint grows.”
“There are quite a few smaller independents in the market, and it is quite competitive, but we see potential in the retail crop inputs and services.
“There’s also real opportunity on the livestock front which could be brought in from Australia because we don’t do that sort of business in North America.”
Funds to play with
With a war chest of about $5.5b to fall back on after recently selling a Chilean potash-cum-lithium business, Nutrien, would look at further expansion options, including Asia.
“When Landmark was acquired eight years ago it was seen as being able to provide the broader company with geographic proximity to Asia, but we haven’t yet leveraged that fully,” Mr Downey said.
“If you look at where the company’s cash flow currently comes from and where it sees growth potential, we probably have the flexibility to develop more in Asia and South America than, say Europe.”
In Australia Nutrien wanted to ramp up its technology commitment to farmers, including services to better decipher the wealth of crop and soil nutrition, yield and input data now available to its customers from various sources.
A multi-function digital portal which will accommodate a host of farm information and even bill-paying options is about to be rolled out in the US, and later in Australia with services adapted to local needs.
Nutrien, previously Agrium until it renamed at the start of 2018 following the merger with fellow Canadian fertiliser producer, Potash Corporation, has about 23,000 staff worldwide.
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