October 10, 2017

Gina Rinehart’s Hancock Prospecting has confirmed the acquisition of the 171,000-hectare Willeroo Station in the Northern Territory of Australia for an undisclosed sum.

Located about 100 kilometers west of Katherine, the Willeroo Station runs 20,000 head of cattle, and was acquired from Agri International, the Australian division of the Indonesian company Great Giant Livestock (GGL), which has been an importer of cattle from Australia for the past three decades, and providing cattle for two feedlots in Sumatra from the Willeroo Station.

While under its ownership, Agri International has invested in excess of $4.5 million into upgrades on the property including implementing a fencing and cattle yard project, improving staff facilities, and widespread water development projects.

One factor that drew Hancock Prospecting’s attention to Willeroo is its location adjacent to the Aroona Station, which the company acquired in March of this year from John and Kate McLoughlin for $13.5 million (not including  cattle or other assets). It’s proximity to Aroona will allow Hancock to integrate economies of scale, while its added proximity to Hancock’s Phoenix Park Export Depot will also enhance the company’s marketing.

“It is adjacent to Aroona which we acquired earlier this year allowing us to operate the two stations as a combined unit,” said Gina Rinehart. “Also being near to the Phoenix park export depot it will assist part of the wet season growing program for Riveren and Inverway as well as help to provide better market timing opportunities for some of Hancock Beef’s Kimberley cattle stations.”

Hancock Prospecting is also planning to replicate the upgrades and improvements it has completed at its other properties in northern Australia at the Willeroo Station, and which are currently being implemented throughout the group’s Kidman properties acquired in December 2016 through a joint venture between Gina Rinehart and China’s Shangjai CRED for A$386.5 million.

“…we were interested to secure Willeroo because we believe we can add improvements and value to the station, where we will copy what we have introduced successfully on our other Hancock stations, and are currently rolling out across Kidman properties also. Willeroo will well complement our existing investments in the North,” said Rinehart.

A New Head for Ag

Last month Hancock Prospecting also announced a major addition to its team, naming David Larkin, a former Australian Meat Industry Council chairman, as CEO of Hancock Prospecting’s agricultural business and its S. Kidman & Co. holdings.

Considering Larkin’s extensive experience in the beef sector, including brand development and the building out of distribution networks, the appointment indicates that Hancock Prospecting is viewing a future more involved in not only large-scale cattle production, but also along the value chain with plans to establish a “paddock to plate beef supply chain.”

“Hancock intends to grow all aspects of its beef business,” said Garry Korte, CEO of HPPL. “Similar to many of Australia’s northern stations, the cattle on our northern stations have a high Brahman content, relying on the live export markets for their continued existence. We are working on building new long term sustainable markets, so that as our northern herd increases it is also possible for this smaller part of our beef business to expand. We are continuing to grow the largest component of our business, which is based on our other cattle breeds across both Hancock and Kidman properties, including our prime Wagyu. This will underpin and drive the development of our Kidman and 2GR brands.”

All told, Larkin will oversee a cattle and beef empire that touches four Australian states and the Northern Territory, and one that encompasses an area larger than all of Tasmania. These holdings include a network of wholly-owned or partner-owned cattle stations and feedlots, including a Wagyu beef operation in New South Wales with a capacity of 7,000 head and another Wagyu feedlot in Queensland with a capacity of 10,000 head. These Wagyu operations will supply Hancock’s 2GR branded Wagyu beef product line created to supply China’s premium restaurant market.

“Agriculture is Australia’s second largest export industry, and earns more than $48 billion dollars annually, (according to recently announced figures from the Federal Government), as well as being responsible for employing directly and indirectly, more than 1.6 million Aussies,” said Rinehart in a recent company release announcing the appointment of Larkin. “So it is important that the agricultural industry continues to survive and thrive, and to do so it must be internationally cost competitive, and listen to our overseas markets needs and preferences, and be able and willing to invest in practical agritech under reasonable government regimes.”

Larkin is a fitting choice for the role of CEO when the goal is to keep an eye on international markets. Aside from his time as chairman of the Australian Meat Industry Council (AMIC), he also is a former industry advisor to Trade Minister Andrew Robb during the period of time that saw Australia engaged in free trade agreement talks with China, Japan, and South Korea. He also has been awarded the 2009 Distinguished Australian of the Year award from the AMIC, the 2015 Red Meat Industry Achiever of the Year award, and the Medal of the Order of Australia for “significant service to international business and commerce through leadership and innovation”, reports Farm Weekly.

“In accepting the role at Hancock, I was amazed at the level of commitment from the business, but also the passion and the capability of the business to grow into the future,” Larkin told Farm Weekly.

“There’s $40 million being invested in agriculture by the group this year split fairly evenly, roughly $20m going into the Kidman business and $20m going into the Hancock business,” he said, adding, “I see opportunity in Australian agriculture, particularly with such iconic names as Hancock and Kidman and the history in those businesses, to be able to build something that people in time will be able to say was an iconic Australian company built by Australians and that it was a remarkable achievement.”

-Lynda Kiernan