March 8, 2021

By Lynda Kiernan, Global AgInvesting Media

Hancock Agriculture, the second largest producer of beef in Australia, and its joint venture partner S. Kidman and Co. have appointed Elders to market a portfolio of seven of its Northern Australia beef production assets. 

Included in the sale will be approximately 108,500 head of cattle, plus progeny, along with Phoenix Park, a 20,000-head feedlot and export station located near Katherine, rounding out a portfolio that has the capacity to turn off as many as 45,000 head of cattle per year.

Becoming available will be more than 1.8 million hectares (about 4.5 million acres) of prime Australian grazing land, reflecting nearly 20 percent of the total 10 million hectares owned by Hancock Agriculture and S. Kidman, in which Hancock Agriculture Executive Chairman Gina Rinehart owns a majority stake in partnership with China’s Shanghai CRED, following its acquisition for A$386.5 million in 2016.

The properties being listed are:

Aroona Station – Acquired in early 2017 by Hancock for $24 million, the 147,510-hectare Aroona is located 100 kilometers west of Katherine and included 15,000 head of Brahman cattle. 

Willeroo Station – Adjoining Aroona, Willeroo is a 171,000-hectare station acquired by Hancock from Agri International, the Australian division of the Indonesian company Great Giant Livestock (GGL), in October 2017 for $33.05 million. The station included 21,000 head of Brahman cattle and an operational plant.

Riveren and Inverway Stations – Located in the Northern Territory, Riveren and Inverway were acquired by Hancock in 2016 from Indonesia’s Japfa Santori. Collectively the stations cover 550,000 hectares and run a herd of 40,000 head of cattle. It was the purchase of these stations that served as a foundation for an expansion in the value chain for Hancock.

Neerima Station – Located in West Kimberly and adjoining the Fitzroy River, Neerima totals 203,142.75 hectares (501,974 acres) with a three-year average carrying capacity of 15,445 and recent upgrades to its cattle yards and infrastructure.

Ruby Plains and Sturt Creek –  Totaling 796,134 hectares (1.9 million acres), these adjoining leases are excellent breeding stations with reliable rainfall, and abundant natural water storage. Upgrades have been made to water capture and distribution, and livestock handling infrastructure, as well as communication systems. 

And, Phoenix Park – Acquired by Hancock in 2016 one week after acquiring Riveren and Inverway, Phoenix Park is an integrated cattle depot and cropping property with a capacity of 30,000 head. The acquisition of this infrastructure positioned Hancock to be a leading supplier to emerging Asian markets.

“This represents a rare opportunity to acquire a strategically constructed portfolio of assets at scale during a period of unprecedented growth in demand for quality Australian protein,” said Tom Russo, general manager, real estate, Elders.

“The geographic locations of the individual stations, coupled with the completion of an extensive and high-quality capital improvements program and a refinement of the breeder herd, allows for the operation of an efficient beef production enterprise which enjoys economies of scale and operational flexibility,” he added.

In a statement, Hancock Agriculture noted that this sale is a natural progression following a rapid expansion and course of improvements undertaken across its portfolio, stating that it is “…now looking to complete its investment cycle and focus on other areas of growth in its agricultural operations.”

Since their acquisition, Hancock Agriculture has undertaken an extensive and comprehensive capital works program across its assets that improved water storage and distribution infrastructure, saw to the addition of innovative technologies including digital communication networks and connectivity, and focused on attention to animal welfare and the improvement of cattle herd quality, mainly through the reduction in age profile of the breeder herd.

“Given the strategic advantages and operational efficiencies that can be achieved by operating the portfolio as an integrated beef production enterprise, we anticipate receiving offers for a whole of portfolio sale from both domestic and international investors,” said Mark Barber, head of agribusiness investment services, Elders.

“Having said that, there will undoubtedly be strong interest from parties looking to acquire individual assets or larger components of the portfolio, particularly from existing operators seeking to expand their holdings or achieve geographic diversification.”

The timing of the sale has been orchestrated to capitalize upon the confluence of multiple favorable conditions: the return of a normal wet season in the northern Northern Territory, better than average rainfall in Northern Queensland, high cattle prices during a time of herd rebuilding following drought and floods, and high market demand for large scale cattle assets.

“The growth of the Hancock Agriculture portfolio in such a small space of time, and its huge investment, is nothing short of astonishing,” said Russo. “This sale is a refinement of the overall portfolio following a period of value creation through further investment and strong management and our client’s intention is to reinvest in the growth and improvement of their larger agricultural enterprise, continue to focus on innovation and maintaining high standards throughout the supply chain for employee safety and animal welfare.”

As it refines its holdings and business, Hancock stated that it remains dedicated to being an industry leader and is committed to retaining and growing its remaining substantial portfolio, which includes holdings across Queensland, South Australia, New South Wales, and the Northern Territory.

With the knowledge that “happy, healthy cattle are the best cattle”, Hancock plans to continue to invest in cattle stations, targeting technical and genetic improvements. 

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com.