*adds comment from UBS Global Management.
The Chinese Australia Sino Hundred Year Agricultural and Food Safety Partnership (ASA 100), an Australian agriculture industry initiative chaired by Andrew Forrest, the mining tycoon, has agreed to take the first steps towards creating a unified strategy towards China.
In a meeting last week, ASA 100 attendees, consisting of 19 agribusinesses, five financial services firms and government representatives including Australia’s agriculture minister Barnaby Joyce, agreed to meet in Brisbane before the next G20 meeting to talk about a pool of requests from China; the aim is to form a single brand with which to approach Chinese companies in the future.
“The key outcome of this historic meeting is that the Australian agricultural industry has come together to demonstrate we are united and a highly collaborative industry supplying China, as opposed to marketing our industry state by state, sector by sector, or even company by company,” said Andrew Forrest, chairman of ASA 100. Forrest has been increasing his own investment in the agriculture industry recently after purchasing a Western Australian abattoir and cattle business in May this year.
And the initiative already boasts three major agribusiness participants in COFCO, the Chinese state owned food processing conglomerate, New Hope Group, the Australian owned industrial giant and Wilmar International, the Singapore listed agribusiness group, according to local media sources.
There was also unequivocal support for an free trade agreements between the two countries, although no official FTA on agriculture has been formally discussed or agreed upon.
The accord spells good news for agri investment managers, according to Trevor Cooke, head of global real estate for APAC and Tony Eyres, head of Australian farmland operations, at UBS Global Asset Management; the firm recently launched an Australian farmland investment platform targeting institutional investors.
“Anything that promotes Australian agriculture and the opportunities available for direct investment is hugely positive,” Eyres told Agri Investor. “We think that engagement with all those types of investors and institutions is key part to what we are doing and the more positive news that reaches institutions, at home or abroad, about the industry, the more capital we should see flow into the asset class.”
Cooke called it a “specialised chamber of commerce for food and agri” and said that it may not be “transformational, but that it was accretive to the overall goal of facilitating greater investment activity and to promoting an understanding of the industry’s needs”.
“China is of course important to UBS but we have a significant presence there already and some very strong relationships,” Cooke added. “It is helpful, however, to lessen the fragmentation of the industry at a corporate level and encourage coalescence.”
Australian agribusinesses in attendance included SunRice and Murray Goulburn and Macquarie and ANZ were some of the financial sector’s representatives.
Various state and federal government representatives also attended. While there have been no official agreements between ASA 100 and the Australian government, they were all very supportive of the initiative.
“Australia and China have a symbiotic relationship where both countries can be great benefactors from ASA 100,” said Joyce, the agriculture minister, in a statement.