ADM Capital finances beef processor

The investment is part of ADM's strategy to improve efficiency for another portfolio company, Yeeda Pastoral.

ADM Capital has opened a halal-compliant cattle processing facility in Western Australia, financed by its ADM Galleus Fund II, and is considering further agri investments in the country.

The firm is also a key backer of Western Australia’s Yeeda Pastoral Company, a beef production, processing and distribution business with 80,000 cattle in the nearby Kimberly region. The new Colourstone Processing Facility will be an important part of that company’s “paddock-to-plate” strategy for domestic and export consumption to markets including the Middle East, according to a statement.

ADM Galleus Fund II is an open ended fund launched in 2009 for institutional managed accounts. No financial details have been disclosed, although it was reported earlier this year that ADM was looking to raise an additional $65 million from existing investors for the fund. It also provided Yeeda with a $23.5 million loan to finance a rights issue involving two of Yeeda’s shareholders, according to local reports.

The new Australian finishing complex will be the only halal-compliant, state-of-the-art beef processing facility in the region, capable of processing 37 cattle per hour, according to ADM. The nearest facility is more than 1,800km away. It is part of a push by the firm to increase vertically-integrated production efficiency, as “the world deals with increasing scarcity of land, water and inputs”. The firm is considering several agribusiness deals across the food chain in Australia for the near future.

“Population increases, urbanisation and disposable income growth are driving a structural change in protein demand, consumption and food chains, with companies like Yeeda likely to offer strong returns,” said one of the firm’s founders and chief investment officers Rob Appleby.

Co-founder and co-chief investment officer Chris Botsford said demand for good quality beef in emerging markets is also growing.

Yeeda’s director of corporate affairs Mervyn Key said that ADM’s backing had enabled the company to “achieve its potential when other more traditional sources of capital in Australia did not understand the opportunity”.

ADM Capital has $1.2 billion under management. ADM Galleus Fund II’s predecessor fund is an open-ended hedge fund focused on Asia, while the second makes longer-term investments in agribusiness, including in Asia-Pacific region. In April, ADM launched a $100 million fund to invest in agriculture and food companies along the value chain in Kazakhstan.