Merged giant to dominate SA grain

THE merger of grain handling, storage and trading company Viterra with global grain giant Bunge will be watched closely for any potential impacts on the South Australian grain industry.

Bunge entered into an agreement with Viterra Limited to merge in a stock and cash transaction, understood to be valued at $34 billion, last week.

Viterra is the main grain handler in South Australia with 55 receival sites in SA and western Victoria, and six port terminals including Port Giles, Ardrossan and Wallaroo.

Bunge built an export port terminal in Bunbury, and has grain receival facilities at Kukerin and Arthur River, also in Western Australia.

Bunge describes itself as an active participant in grain markets in South Australia and the East Coast with head office operations in Melbourne.

Grain Producers SA chairperson Adrian McCabe said because Bunge did not trade in SA or have facilities within the state, the merger would probably mean business as usual in the short term. 

“But now 90 per cent of the world’s grain trade is concentrated in four major companies,” he said.

Mr McCabe said Viterra had invested in SA’s grain supply chain facilities and had increased throughput in its ports, which had become rundown under previous ownership. 

He said GPSA would continue to closely scrutinise the operations of the merged company to ensure the monopoly ownership of ports was not abused and to benchmark its performance against other companies. 

GPSA will monitor operations to ensure handling and storage efficiencies are maintained or improved, and costs to growers are not increased.

In a statement, Bunge said its increased diversification across geographies, seasonal cycles and crops would increase options for managing risk and increasing resilience.

The merged company will be led by Bunge’s CEO Greg Heckman, while Viterra CEO David Mattiske will join the Bunge leadership team as co-chief operating officer.

Mr Mattiske said they would be better positioned to meet increasing demand for food, feed and fuel products. 

“Together, we will play a leading role in the future of the agriculture industry, developing fully traceable, sustainable supply chains and moving towards carbon-neutral operations, while creating a strong growth platform for our combined business,” he said.