China’s Nidera Buys Full Control of Queensland-Based PentAg
Queensland-based PentAg plans to expand its operations to become a nationwide grain trader after gaining the backing of China’s Nidera.
Nidera, which had previously held a 51% stake in PentAg, announced it has gained complete ownership, buying out Japan’s Toyota Tsusho which owned a 10% stake, and Australian investors who founded the grain trader in 2005.
PentAg had previously focused on operating within Australia’s eastern grain belt stretching from Queensland to South Australia. However, the trader has its sights set on expanding its origination and trading footprint nationwide after receiving fresh capital from the Nidera deal, indicating it will expand into Western Australia where CHS is the leading player, and Victoria. It also foresees the company strengthening its position as Australia’s top exporter of sorghum, the bulk of which is produced in Queensland.
This deal is the second major Chinese investment in an Australian agribusiness within a week, following Shandong Delisi Food’s purchase of a 45% stake in Bindaree Beef Group for $105 million.
The deal also has deeper implications for PentAg as it comes on the back of the recently signed free trade agreement between Australia and China, and brings with it Nidera’s links to China’s state-baked COFCO, which bought a controlling interest in Nidera last year. COFCO will provide PentAg with “direct access to the fast-growing Chinese market, and to COFCO’s downstream processing and distribution activities,” said Dave Lengren, PentAg Nidera chief executive.