March 5, 2020

By Lynda Kiernan

Clean Agriculture and International Tourism (CAIT) has closed on a deal originally announced in early 2019 to acquire three cattle stations – two in the Northern Territory (NT), and a third in Western Australia (WA) – from Consolidated Pastoral Company (CPC).

“The divestment of this cluster of three stations at a premium to net asset value reflects the quality of the stations and the investments that have been made in infrastructure in recent years,” said Troy Setter, chief executive, CPC in January 2019. “Our station management and staff look forward to working with CAIT to continue to run the properties and manage the land.”

CAIT –  a subsidiary of TH Group, a Vietnamese conglomerate active in agriculture, food, finance, and pharmaceuticals which accounts for 40 percent of Vietnam’s fresh milk production, is the buyer of the Auvergne and Newry stations in the NT, and the Argyle Downs station in WA totaling 732,900. The deal also included 60,000 head of cattle, and a plant.

Thai Huong, the chairwoman of CAIT’s parent TH Group, has previously been listed as one of the most powerful businesswomen in Asia by Forbes, and she is leading the group through a strategy of international expansion.

With 45,000 dairy cows in Vietnam, the group made a significant investment in 2018 into advanced tech dairy machinery, and invested $630 million into a dairy processing plant in Russia. 

This move in Australia by the group is a means to expand into cropping, pastoralism, and tourism, Dr. Steve Petty, director of CAIT in Australia, told ABC, noting that Auvergne would be key for development. 

“It is a pretty good base that CPC have left there, and the plan is to build on that foundation,” he said.

Initially, plans are to improve the pasture, and then potentially expand into cotton, but for now production will focus on forage crops such as sorghum.

Rumors about the sale of the CPC portfolio have circulated since November of 2014, but the divestment process did not begin in earnest until 2018 with the sale of Nockatunga Station, a bullock fattening operation located in southwest Queensland.

Despite intentions to sell the CPC portfolio in its entirety, since then approximately 40 percent of its farmland has been divested.

Two months after CAIT agreed to acquire these three stations, in March of last year, CPC parted with its Mimong Station for a  reported A$20 million (US$14.3 million) to Baldy Bay Pty Ltd, which is owned by pastoralist Sterling Buntine. And by May, Baldy Bay returned to acquire CPC’s Comley Station aggregation in central Queensland for a reported A$50 million (US$35.27 million).

All told, CPC has sold eight properties, or little more than 40 percent of its 5.5 million hectares, to buyers including Cleveland Agriculture, Sterling Buntine, and Vietnam’s Clean Agriculture and International Tourism, fetching A$310 million (US$211.5 million).

Then, in October 2019, Guy Hands, founder and chairman of Terra Firma, the British private equity investor and parent of CPC, decided to lead a consortium consisting of CPC management and unnamed institutional investors for the A$600 million (US$409 million) buyout of the company. 

Through this buyout proposal, Guy Hands, CPC’s management, and their related investor partners will take over the remainder of the CPC portfolio (still ranking as the largest private cattle company in the country) totaling 3.2 million hectares (7.91 million acres) of land and 300,000 head of cattle, along with a 90 percent stake in a joint venture holding two feedlots located in Indonesia.

The deal for Auvergne, Newry, and Argyle Downs however still needs to secure approval from both the Foreign Investment Review Board (FIRB) in Australia, and from the government of Vietnam. Once approval is had, this deal will represent one of the largest land deals in the Top End of the NT in recent history.

– Lynda Kiernan is Editor with GAI Media and daily contributor to the GAI News and Agtech Intel platforms. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.