Property

WA scale for sale as SALIC, PenAgri list Merredin Farms

Liz Wells, January 8, 2024

Harvesting last year at Merredin Farms in the North Bodallin district of WA. Photo: Colliers

THE Saudi Agricultural and Livestock Investment Company and Western Australia-based investor PenAgri have listed their jointly owned Merredin Farms Wheatbelt Portfolio to wind up SALIC’s involvement in Australian broadacre cropping.

Located in the North Bodallin district of WA’s Central Wheatbelt , the portfolio covers 77,954ha, including 66,159ha suited to cropping.

It is also suited to mixed farming, although sheep have been phased out of the operation in recent years.

“It’s being sold as a full grain operation, with no livestock at all,” Colliers agribusiness head Rawdon Briggs said.

In its listing of the portfolio, Colliers said the purchaser will become WA’s largest corporate broadacre farmer, with economies of scale and efficient farm practices creating a platform for low-cost, high-volume grain production.

Merredin Farms was bought primarily as a grain farm through SALIC’s 2019 acquisition of leased and freehold country totalling 200,000ha and put together by John and Julie Nicoletti.

The portfolio now for sale through Colliers is all freehold country, and is being sold as a going concern on a walk-in walk-out basis.

While SALIC and PenAgri jointly own the land, it has been operated by SALIC’s Merredin Farms, with staff available to stay on after the sale.

“The portfolio is available on a going concern basis, offering an immediate turn-key enterprise, inclusive of an extensive list of modern plant and equipment and committed workforce, dedicated to best-in-class farming and safety practices,” the listing says.

Carbon opportunity

According to PenAgri’s website, the company owns two aggregations centred in the Merredin region which total more than 108,000ha and are leased to unnamed operators.

PenAgri also owns and operates a mixed-farming and carbon-sequestration aggregation in the Geraldton region, and last year sold the 22,568ha Daisy Downs to BP’s Low Carbon Australia.

Merredin Farms is on the market and is unofficially expected to fetch more than $2600/ha. Photo: Colliers

In marketing the Merredin Farms Wheatbelt Portfolio, Colliers said it is “positioned optimally to capitalise on an increasing price for carbon and high demand for natural capital assets for carbon sequestration and/or renewable energy infrastructure.”

Expressions of interest on the portfolio close February 14, and Mr Briggs said the listing was already attracting interest from corporates interested in a sizeable acquisition in WA.

While he declined to provide a price guide, indications are the portfolio could fetch around $200 million, or $2565/ha.

Shift for SALIC

According to its website, SALIC entered into offshore investments in 2012 with purchases tied to grain, rice and meat in countries including Brazil, Canada, India, Singapore, and Ukraine as well as Australia with the aim of improving the kingdom’s food security.

SALIC’s investment in processing rather than production have been significant in recent years, and include its purchase in 2021 of 35 percent of Minerva Foods Australia,  which followed its 2016 buy-in of the Brazilian parent Minerva Foods with 31pc.

In Australia, Minerva owns the Australian Lamb Company which includes a meatworks at Colac in Victoria, as well as processing sites at Tammin and Esperance in WA.

Saudi Arabia is a long-term buyer of Australian feed barley, milling wheat, and sheepmeat.

Up to 2012, Saudi Arabia was also a significant live-export market for Australian sheep, and the trade is showing signs of rekindling.

 

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