THE JOINT venture between cotton and oilseed industry major Cargill Australia and partners Namoi and Auscott has wound up.
Forced by changing profitability after more than four decades of collaboration and industry-good investment in the 1970s, it brought a new model of oil and meal production not seen before in eastern Australia.
Under the banner of Cargill Oilseeds Australia and Cargill Processing Ltd, Cargill was the majority owner, with Auscott and Namoi equal minority shareholders of 15 per cent in the joint venture.
It supported investments in Narrabri in north-west New South Wales, and Footscray in Melbourne, Victoria, with both plants operated by Cargill.
The Narrabri crush ceased operation last year, but the Footscray facility, which handles around 150,000 tonnes of canola annually, is continuing under sole Cargill ownership.
Cargill corporate affairs Asia Pacific director Peter McBride said cottonseed market economics were the cause of the recent change in structure.
“The Cargill Oilseeds Australia and Cargill Processing Limited partnership ownership structure has changed significantly due to the changing economics of the Australia cottonseed market over a number of years which resulted in the closing of the Narrabri plant earlier this year,” he said.
“As a result the partners – Cargill, Auscott and Namoi – have dissolved the partnership and therefore the Footscray plant in Victoria is now 100pc owned by Cargill.”
Court disputes withdrawn
On Friday, proceedings by two of the joint-venture partners, Cargill and Namoi were withdrawn.
The initial action by Namoi had its origin in losses made by the joint ventures over years which required the partners to fund the shortfalls.
Both parties had matters before the Federal Court of Australia seeking discovery, and the proceedings of both matters were dismissed with no orders made as to costs.
Namoi Cotton for several years has identified the burden on its balance sheet and wanted to get it sorted.
In a statement released on Monday, Namoi chief executive officer Michael Renehan said resolving the commercial dispute with Cargill had been one of the company’s major priorities.
“This dispute was in relation to the Cargill Oilseeds Australia partnership in which Namoi had a 15pc interest,” the statement said.
“Namoi is pleased to announce that it has now settled the dispute, including dismissal of pre-discovery proceedings, and has simultaneously sold its 15pc interest in Cargill Oilseeds Australia and Cargill Processing Ltd to Cargill Australia Limited.”