Duncan B.
Australian
agribusiness is becoming increasingly attractive to foreign investors. Private
equity investors have been involved in some big purchases recently.
European
firm R&R, which is owned by French private equity firm PAI Partners,
recently bought Australian ice cream maker Peters in A $400 million deal.
US
private equity firm Kohlberg Kravis Roberts tried a $3.05 billion take-over bid
for Treasury Wine Estates, the makers of Penfolds.
In
June 2013, TPG Capital bought Ingham Enterprises, one of Australia’s biggest
poultry producers for $880 million.
There
have several other deals as private equity buyers target packaged foods and
meats, companies with strong brands that can be used to improve their own
portfolios and food distribution businesses.
Most
of Australia’s grain trading firms are now foreign-owned.
Large,
well developed farms in the Riverina, northern NSW and southern Queensland have
become targets for foreign investors. Large properties suited to grains and
oils, cotton, irrigated cropping and edible nuts are in strong demand.
The
source of funds for foreign investors include pension funds, insurance funds,
endowment funds sovereign wealth funds, ultra high net worth individuals and
families and trading houses and corporates.
All of these represent different forms of finance capital, the most
rapacious and best organised section of capital in the era of imperialism.
Some
foreign investors are seeking joint ventures with Australian farmers and
companies. This could be more beneficial to Australian farmers and
agribusinesses than direct take-overs.
For
example, West Australian biggest meat processor, the Walsh family has signed a
$1 billion partnership deal with Grand Farm, one of China’s biggest food
companies, for 500,000 lambs and 30,000 cattle to be processed in Australia and
shipped to China.
The
joint venture includes a $200 million investment in WA and the provision of
expertise in livestock production and sheep genetics by Walsh as part of $800
million being spent on the development of farms in Inner Mongolia.
Nevertheless,
joint ventures between partners of unequal strength can have serious
shortcomings. These can include an imbalance in levels of expertise, investment
or assets brought into the venture by the different partners. Such an imbalance has the potential to allow
the stronger partner to dominate the weaker.
Capitalism
is not a system that manages the contradictions between “partners” to ensure
equality.
In
that sense, joint ventures may represent the foot in the door that leads to a
complete takeover of the weaker by the stronger.
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