CLEAR Grain Exchange is set to consolidate its position as Australia’s leading electronic market for grain with the purchase of igrain.
Announced today and effective from tomorrow, the private sale has been negotiated in recent months for an undisclosed figure following agreement between igrain managing director Tom Roberts and directors Peter Flottman and Andrew Kelso, and the CGX board.
Both Mr Roberts and CGX managing director Nathan Cattle told Grain Central the sale will be advantageous to the two companies’ client bases.
“The opportunity here is that Clear Grain Exchange is the market leader in the warehoused market, and igrain has operated in the ex farm space,” Mr Roberts said.
Founded in 2009 in the wake of export market deregulation, Mr Roberts said igrain has had a total of 12,000 registered users, mostly in New South Wales and Victoria, but also in Queensland and South Australia.
“We’re thankful for the client base that’s supported us, and I’m sure they’ll be serviced well by Clear Grain Exchange now that they’ve purchased our technology.
“We’re optimistic about the opportunity this sale will bring to the market, and we think Nathan and the team do an excellent job.”
“I couldn’t be happier with them as a buyer, and I have a high level of respect and admiration for them.”
Mr Roberts said buyers on igrain have been varied, and include domestic end users such as stockfeed mills and feedlots, as well as container packers and bulk exporters, who will all be ably serviced under the new ownership.
CGX has developed as an online exchange for grain warehoused at bulk-handler sites across Western Australia, South Australia, and in eastern states with more than 18,000 growers, 186 agents, and 300 buyers registered.
CGX was purchased by NZX Ltd in 2009, which ran it until it was privatised in 2016; Elders now owns a 30pc stake in the business.
Mr Cattle said the purchase of igrain has partly come about in response to feedback from CGX users looking for a service to help transact grain stored on farm, and create a more efficient market similar to the role CGX has played for warehoused grain.
“Tom is a good thinker, and he’s put a lot into igrain; we think there’s technology in igrain and thought processes that we can use and enhance,” Mr Cattle told Grain Central.
“We’ve learnt a lot regarding igrain as you’d expect, though we only get the keys to start operating on Monday, and there’s a lot more learning to be done.”
CGX’s purchase of igrain is ultimately expected to put grower offers before a broader range of prospective buyers, and give buyers access to parcels available on farm as well as in warehousing.
In a statement, CGX said igrain will continue to operate from its own website in the short term at least while CGX gets across the transaction types in the ex-farm space.
“We believe that coupled with the CGX knowledge of operating markets, we can provide a combined offering to service a broader set of grain transactions for the benefit of the Australian grain industry.”
CGX said its business-development and operations teams will work across both the CGX and igrain markets, and were looking forward to helping users maximise benefits of the two.
“As we learn, we will continue to invest in the igrain technology with the aim of making it easier and more secure for buyers, growers and grower agents to participate in buying and selling grain.
“CGX is committed to long term value creation at the farm-gate and believe we achieve this by working with all parties in the industry to improve price discovery and make it easier for all buyers to purchase growers’ grain whilst ensuring growers are protected.”
Mr Roberts said the sale of igrain will allow him to concentrate on his grazing operation near Bathurst on the Central Tablelands of NSW.
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