SYDNEY, Australia (Reuters) — A consortium of grain handlers plans to build a terminal in New South Wales in Australia, signalling fresh competition for GrainCorp, the region’s biggest listed agribusiness.
Logistics business Qube Holdings said it has formed a joint venture with Noble Resources, a unit of Singapore’s Noble Group, to develop the multi-user handling facility in Port Kembla, about 90 kilometres south of Sydney, with capacity for more than 1.3 million tonnes of export grain a year.
Cargill Group and Emerald Grain have been granted the option to acquire up to a 20 percent stake each in the new venture, Quattro Grain, which is expected to be operational by late 2015 or early 2016.
The new terminal will put further pressure on GrainCorp and its largest port, also based at Port Kembla, which has seen a wave of new competition since the rejection of a takeover bid for the company by Archer Daniels Midland.
GrainCorp has seen increased competition for its port business following the opening earlier this year of the Newcastle Agri Terminal, backed by Western Australian bulk grain handler CBH Group, Glencore Xstrata and Olam International.
In rejecting ADM’s bid last November, the Australian government cited a lack of competition along the country’s east coast.
“It is further evidence, if any was required, of the strong competition for grain in eastern Australia,” said Angus Trigg, a spokesperson for GrainCorp.
Qube said New South Wales Ports would extend and deepen the berth at Port Kembla to accommodate Panamax vessels. The new terminal was dependent on receiving all necessary authorizations.
Cofco Corp, China’s biggest grains trader, is in talks to buy Noble Resources, Noble Group’s agribusiness arm, in a deal that would value the division at around $1 billion, said people familiar with the matter.