Roc Partners acquires Emerald Grain from Sumitomo

Roc Partners has bought out Emerald Grain from the Japanese conglomerate, at a time when prospects for Australia’s east coast grain industry are positive.

Private equity firm Roc Partners has acquired grain handling business Emerald Grain from Japanese trading company Sumitomo Corporation.

Emerald Grain is one of Australia’s largest grain marketing and supply chain businesses, with nine grain storage and handling facilities in New South Wales and Victoria that feed exports through the Melbourne Port Terminal, which it also owns. The firm exports to 35 countries across Asia-Pacific, Africa and the Middle East.

The deal covers all of Emerald’s business units, including grain trading and supply chain management. The value of the transaction has not been disclosed, nor which of the Roc Partners-managed funds are behind the investment. Roc Partners declined to comment.

Sumitomo first acquired 50 percent of Emerald Grain in 2010, and took over the rest of the company in February 2014.

Australia is set for its highest levels of winter crop production since 2017 following favourable climatic conditions on the east coast. The Australian Bureau of Agricultural and Resource Economics and Sciences has forecast that production will reach 51.5 million tonnes in 2020-21. This level has only been beaten once in the past 10 years, when production reached 56.7 million tonnes in 2016-17.

Emerald Grain managing director David Johnson said he was looking forward to a new phase for the business under Roc Partners’ management.

“Sumitomo was involved with Emerald for many years, the past five as parent company, working strongly with Emerald as we restructured the business and refined our strategy – a very important period during which we appreciated Sumitomo’s support and guidance,” he said in a statement. “Roc Partners are entering the grain industry in a year when seasonal conditions are highly favorable in all our operating regions. They recognize the strategic nature of Emerald’s assets and are excited by our growth prospects.”

Sydney-headquartered Roc Partners has made several agricultural investments in Australia, striking deals through the Victorian Business Growth Fund and the GO NSW Equity Fund, both of which it manages.

It most recently made an investment of an undisclosed size in Victoria tomato producer Flavorite through the VBGF, a vehicle comprising a A$200 million ($149 million; 122 million) commitment from Aware Super and A$50 million of public funds from the Victoria government. It has partnered with Aware Super on other investments, including wagyu beef producer the Stone Axe Pastoral Company.