north americans moving into oz, page-2

North Americans agri-giants appear to be eying Australia for its suitability as a resource and trading base into Asia ... this augers well for Georgina Basin phosphate

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Agrium eyes AWB to expand Asia business August 17, 2010 - 11:39AM

Canadian predator Agrium Inc says a successful takeover of Australian agribusiness AWB Ltd will provide it with a base to expand in Asia.

Calgary-based Agrium also says establishing a presence in Australia might enable Agrium to expand some of its fertiliser operations.

"We believe Australia has great potential to serve as Agrium's regional hub to the Asia-Pacific region and the basis for additional future expansion in the region," Agrium president Mike Wilson told reporters on Tuesday.

Advertisement: Story continues belowMr Wilson said Australia would strengthen Agrium's total sales package of chemicals, fertilisers and advanced technologies.

"As an example, Australia would be a great place for us to locate a controlled-release urea facility and service other parts of Asia from there," he said.

There may also be opportunities for Agrium to partner with various fertiliser manufacturers in Australia.

Mr Wilson said Agrium was involved in the wholesale manufacturing and marketing of crop nutrients, with the capacity to produce more than eight million tonnes of nitrogen, phosphate and potash fertilisers.

Some of this is exported to Australia.

Agrium produces eight million tonnes but markets close to 16 million tonnes around the world.

Most production capability is in North America.

Mr Wilson also said Agrium was the largest agricultural retailer in North America and had a significant presence in South America.

Agrium had grown its regional operations five-fold over the past five years and had the goal of doubling retail earnings by 2014.

"We view this acquisition (AWB) as an important step in that direction," Mr Wilson said.

Mr Wilson said Agrium was attracted to AWB's Landmark agricultural products and services business.

Furthermore, acquiring AWB would diversify Agrium's earnings stream by expanding into the grain-handling business.

Agrium had no plans at this stage to sell any of AWB's Australian grain-handling operations.

"Agrium's got a lot of experience in distribution, storage and transportation of commodities both in-country and globally, so we think there's a natural fit for that business," Mr Wilson said.

He noted that AWB had been considering divesting its remaining international commodity management operations, but at the moment Agrium had no specific plans to sell that business.

Mr Wilson said Agrium did not have any operating businesses in Australia and should not face any competition concerns in relation to the proposed acquisition of AWB.

Agrium on Monday announced a $1.23 billion takeover offer for AWB, offering $1.50 cash per AWB share.

The Agrium proposal trumped a "nil premium" all-scrip proposal from Australia's GrainCorp Ltd to merge with AWB.

GrainCorp has offered one GrainCorp share for every 5.75 AWB shares.

At Monday's share market close, the GrainCorp proposal valued AWB shares at about $1.13 each, and AWB at about $928 million.

At 1119 AEST on Tuesday, AWB shares were one cent higher at $1.43, and GrainCorp shares were steady at $6.53.

http://news.smh.com.au/breaking-news-business/agrium-eyes-awb-to-expand-asia-business-20100817-127oa.html