News

July 02, 2008

The Future Brightens For Two Giant Australian Agri-Businesses, Elders And Dalgety

By Our Agri Expert in Oz

For much of Australia’s history after the first fleet dropped anchor in 1788 the farming community was served by two great “pastoral” houses, Elders and Dalgety. Now, after two decades of fiddling with corporate structures, name changes, and diversions up blind alleys, it is starting to look as if it might be the resumption of business as usual with both companies on the cusp of remarkable returns. Elders, which for a while was used as a plaything in the defence of the big miner, BHP, is about to break free of a strait jacket called Futuris, and Dalgety might re-emerge from the disgrace which has enmeshed AWB, formerly known as the Australian Wheat Board. Interesting as this is to followers of agribusiness “down under” investors would be well advised to watch, learn, get ready to act – but not to touch at this stage.

In both cases, there is more dirty water to flow under the bridge. Elders is likely to be the first great farming name to make a return to the stock exchange, virtually by default. Dalgety is a little further back with AWB still struggling to deal with a bad name acquired from trading, somewhat incorrectly, with the regime of late Iraqi dictator, Saddam Hussein. In the case of Elders it might well turn out to be a simple name change by Futuris once it gets rid of a swag full of surplus assets...