China's GLAM has $1bn to beef up Australian agriculture ambitions
China's Genius Link Asset Management (GLAM) says it has $1bn to fund its Australian agricultural ambitions over the next three years.  This comes as foreign investment increases in Australian dairy, meat and grain so as to tap into the Asian food boom.  GLAM's founder, Joel Chang, stated that the firm sees "Australia as the food hub for the Asia Pacific region", adding it is the perfect export hub to feed the 1.3 billion Chinese people.

Mr Chang said Australia was the perfect export hub to feed his 1.3 billion countrymen.

"We see Australia as the food hub for the Asia Pacific region. If you look at the region, from south-east Asia to Korea, Australia and New Zealand are the only two that have export capacity," he said.

Serious advantage

The nation's reputation as a safe, "clean and green" supplier of premium produce was a serious advantage and Genius Link Asset Management (GLAM) wanted to partner with local farmers to capitalise on brand Australia.

"The food produce is the best in quality – that is known globally. It is all about clean and green food," he said.

"We want to create a brand in Australia. We want to create a brand so that all the Michelin-starred restaurants would use that meat."

Advertisement

Mr Chang is a former chief investment officer at Investec Asia and boasts plenty of investment banking and private equity experience at firms including BNP Paribas, Societe Generale, and China Everbright Capital.

He knows Australia well.

He led GLAM's two previous Australian agribusiness investments and completed his undergraduate studies at Melbourne's Monash University.

GLAM owns Riverina Oils and Bio Energy, which operates the country's second-biggest integrated oilseed crushing and refining plant.

Uses its knowledge

The investment group has representation on Riverina Oils' board and uses its knowledge and contacts in Asia to sell product from the plant, in Wagga Wagga in NSW, in Asian markets.

Advertisement

The firm also owns the country's biggest table olive plantation, TreeTops Plantation, which has 120,000 olive trees on 500 hectares in the NSW Riverina region.

Mr Chang, 47, declined to comment on his play for S. Kidman & Co, but The Australian Financial Review's Street Talk column revealed last week that GLAM had trumped Shanghai Pengxin's $350 million bid.

Kidman is Australia's biggest private landholder and operates 10 cattle stations, a stud farm, and a feedlot covering more than 100,000 square kilometres.

Mr Chang is hugely optimistic about beef and it is unlikely he will go quietly into the night.

He said the lack of subsidies to Australian farmers had made them some of the best operators in the world.

"We are hugely impressed with Australian farmers. The work ethic. The commitment ... Australia has not put in a lot subsidies compared to other parts of the world, which is what makes them so competitive cost-wise," he said.

Advertisement

Local partners

"We always find local partners around the world, as we believe this gives us local knowledge and a much easier way to localise our operations."

He noted other companies that presented as potential partners or investment opportunities.

"There are all the usual suspects, like AACo [Australian Agricultural Company], CPC [Consolidated Pastoral Company] etc," he said.

"It would make sense for AACo to partner with a Chinese company. It would give them access to a bigger market and be very beneficial for both sides."

GLAM's primary offices are in Hong Kong but the group also has a small Sydney office. The firm has a history of co-investment with home-grown investment bank Macquarie.

Advertisement

Mr Chang is also encouraged by the recent China-Australia Free Trade Agreement and a bilateral agreement on Australian live cattle exports that has given pastoralists unprecedented acess to the vast Chinese market.

"It is definitely very good from the Chinese perspective," he said. "The population of China is about 1.3 billion. In terms of meat consumption, it's a lot less than Australia in per capita terms. And we see that as the Chinese economy continues to grow, people are becoming more mindful of protein consumption.

"China has problems with producing that much beef for two reasons: urbanisation continues to increase; and secondly, population issues.

"We are anticipating that China has a shortage of 1.4 million head [of cattle] or, in terms of tonnage, 350,000 tonnes."