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Food & Beverage

Elders to Acquire Australian Agribusiness Delta in 2025

2024-12-09

Elders Limited, a prominent player in the industry, has recently taken a significant step by entering into an agreement to acquire Australian agribusiness Delta. This acquisition holds great importance for both companies and the agricultural sector as a whole.

Uniting Agribusinesses for Enhanced Service and Growth

Delta's Operational Network and Customer Base

Delta, founded in 2006, operates a vast network consisting of 68 locations. It serves around 40 independent wholesale customers, offering a comprehensive range of farm inputs. These include essential items such as crop protection, seeds, animal health products, fertilisers, fuel, and general merchandise. The company's extensive reach and diverse product offerings make it a key player in the agricultural supply chain. It not only provides these products but also markets its own private label brand of agricultural chemicals and animal health products. This allows Delta to stand out in the market and offer unique solutions to its customers. Additionally, Delta's team of agronomists and Precision Agriculture specialists provides farm advisory services, adding significant value to its operations.The acquisition of Delta by Elders Limited is expected to bring several benefits. As Mark Allison, the managing director and CEO of Elders, stated, "All decision making at Elders is underpinned by an ambition to provide the best service for our clients and customers, and the acquisition of Delta supports that." Delta provides Elders with greater exposure to key local retail markets, especially in regions such as New South Wales, North West Victoria, South Australia, and Western Australia. This expanded market presence will complement and extend Elders' existing products and services range, enabling them to better serve rural and regional customers.

Integration and Future Prospects

Under the terms of the integration with Elders, Delta's leadership and operations will remain unchanged. Both companies will continue to operate independently, maintaining the current structure of their networks. This ensures that customers receive the same level of service from both Delta and Elders. Allison further added that the agreement will enhance Elders' existing technical service network and its offering in Ag Tech and precision agriculture. Elders has a proven track record of synergy generation through backward integration, and it is anticipated that this acquisition will create meaningful value for Elders shareholders.Delta management and employees will also remain unchanged, in line with Elders' light touch integration strategy. As Gerard Hines, the managing director and co-founder of Delta, mentioned, "There is strong cultural alignment between Elders and Delta, as two trusted agribusinesses seeking to create value for our customers." The management team will continue to lead Delta, and they are excited to be able to provide customers with innovative and value-adding business solutions with the added support of Elders.Completion of this acquisition is subject to customary conditions and ACCC clearance. It is expected to occur in the first half of calendar year 2025, marking a significant milestone in the growth and development of both Elders and Delta. This acquisition has the potential to reshape the agricultural landscape and bring new opportunities for both companies and their customers.

Foodfolk Australia, a Western Australian family-owned and operated business, is experiencing remarkable growth with the support of a government investment. This investment is enabling them to expand their operations and put their delicious ready-made meals on more in-flight menus.

Government's Investment Unlocks New Heights for Foodfolk Australia

Government Support and Business Expansion

The Western Australia Government's investment of $1 million through the Value Add Investment Grant is playing a crucial role in Foodfolk Australia's growth journey. This grant is allowing the business to undertake its ambitious $10 million expansion project. By relocating and upgrading their operations at Perth Airport, Foodfolk Australia is setting the stage for significant growth.The introduction of new state-of-the-art technology, advanced equipment, and automation will enhance the capacity and efficiency of the business. It will enable them to triple their meal production, increasing their share in the Australian aviation and non-aviation markets. This includes sectors such as mining, events, hospitals, and aged care. Moreover, it opens up opportunities to attract new international air-carrier customers.

Ethos of 'Less Waste, More Taste'

New processing and packaging equipment will be a key aspect of Foodfolk Australia's expansion. This equipment will support their ethos of 'less waste, more taste' by extending the shelf life of fresh packaged meals from five days to 20 days. This not only reduces waste but also ensures that customers can enjoy their delicious meals for a longer period.

Job Creation and Local Economy Boost

The expansion is expected to create 100 new jobs over the next three years, with the potential for a further 100 jobs within the decade. This job creation will have a significant impact on the local economy, providing employment opportunities and contributing to the growth of local supply chains.The Value Add Investment Grants program is not only helping Foodfolk Australia but also a diverse range of agrifood and beverage businesses across the state. These grants are enabling them to take on large-scale expansion plans and provide a much-needed boost to local economies.As Food Minister Jackie Jarvis said, "It's truly exciting to support Foodfolk Australia, which started as a small business, to reach new heights and put more of WA's incredible produce on the menu." The Cook Government's continuous support for the growing food industry is evident through programs like the Value Add Investment Grants.Foodfolk Australia's story is a testament to the power of government investment in supporting local businesses and driving economic growth. With their expanded operations and increased production capacity, they are set to make a significant impact in the food industry.

South Australian wine exports to China have witnessed a significant surge, reaching an impressive $558 million in the 12 months up to October. This remarkable growth comes after Chinese tariffs were lifted, with over 99 per cent of sales occurring in the subsequent seven months. This development marks a major comeback for the state's wine industry, which had faced severe setbacks due to trade restrictions.

Unlock the Potential of South Australian Wine in China

Impact of Tariff Lifting on South Australian Wine Industry

The removal of tariffs on Australian wine in April has had a profound impact on the South Australian wine industry. Overall, wine exports from South Australia during this period reached a record $1.7 billion, representing a 38 per cent increase compared to the previous year. South Australian producers now hold a significant share, accounting for two-thirds of Australia's total wine exports, which are valued at $2.5 billion. This surge in exports showcases the industry's resilience and ability to adapt to changing trade conditions.In addition to China, South Australia's second-largest wine export market, Hong Kong, also experienced impressive growth. Sales in Hong Kong rose by more than 30 per cent, reaching $237 million. This indicates the growing demand for South Australian wine in international markets.

Diplomatic Efforts and Government Support

The turnaround in trade with China was made possible through months of diplomatic efforts by the Federal Government. Ministers Don Farrell and Penny Wong played crucial roles in normalizing trade and removing tariffs. In March, the South Australian Government unveiled a proactive $1.85 million reengagement package to help local wine exporters capitalize on the opportunities in China.Trade and Investment Minister Joe Szakacs emphasized the importance of this effort. He stated, "From a total cessation of wine exports to China, as a result of the combined effort and dedication from wine producers and government alike, the return has been very pleasing. Anticipating the lifting of tariffs, it was crucial to act quickly, and that's why we invested heavily in our reengagement package, supporting our exporters to get back into the market as soon as possible. We are now seeing the dividends of that investment, with our producers selling more than half a billion dollars of wine to China in just seven months."The initiative has provided extensive support to exporters, including attending major trade shows and receiving critical on-the-ground assistance from trade experts both domestically and abroad.

Opportunities for South Australian Wine Producers

Matthew Deller, CEO of Wirra Wirra Vineyards, highlighted the significance of the tariff removal. He said, "The removal of tariffs has opened up China as a valuable additional market in our export diversification strategy. For Wirra Wirra, it's an opportunity to re-establish relationships and introduce McLaren Vale's premium wines to a dynamic and growing audience. Chinese consumers are increasingly drawn to authenticity, quality, and sustainability—qualities that are at the heart of South Australian wine."This week, the reengagement package facilitated the return of Chinese wine buyers to South Australia, where they engaged with representatives from over 70 wineries across eight regions. This direct interaction between producers and buyers is expected to further boost South Australian wine exports.

Improving Trade Relations and Other Milestones

In a broader sign of improving trade relations, the Australian and Chinese governments recently announced a schedule to resume imports of Australian Southern Rock Lobster. Exports of this prized seafood are expected to resume later this month, marking another significant milestone in the recovery of trade between the two nations.This series of events demonstrates the positive trajectory of South Australian wine exports and the efforts being made to strengthen trade relations between Australia and China. South Australian wine producers are well-positioned to capitalize on these opportunities and continue their growth in the global market.