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E-Malt.com News article: 4173

Australia: Another merger of big Australian grain companies is likely within a year or two, Brendan Stewart, chairman of wheat exporter AWB Ltd., announced on February 8. Stewart said the number of grain industry marketing and logistics organizations has fallen to four from 15 over the past eight years, according to Dow Jone.

There will probably be only three such organizations "in a year or two," he told an AWB shareholder meeting in this central New South Wales farming town. He didn't elaborate.

Currently there are four major companies operating in the grain export market chain, including AWB, which operates a wheat export monopoly and other rural business. Graincorp Ltd. operates a large upcountry silo and export terminal network through Australia's three eastern states, and has a large stake in a milling business. ABB Grain Ltd. operates a silo and export terminal business based in South Australia state and is the nation's largest maltster, while grower-owned, unlisted Cooperative Bulk Handling Ltd. operates a similar logistics business in Western Australia state.

Stewart told the meeting that grain logistics is divided into geographical monopolies with some limited competition.

AWB has a joint venture with Graincorp to manage export grain logistics in the eastern states, which operated for the first time in the last harvest. The venture is resulting in substantial savings, through such means as quicker turnaround times for trains unloading at Newcastle Port in New South Wales, he said. AWB wants a similar arrangement with CBH in the west, but is still negotiating with that company, he said.

09 February, 2005

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