KEY members of State Parliament's Select
Committee on Grain Handling have
labelled the Foreign Investment Review
Board's approval of Glencore's Viterra
takeover a lost opportunity to improve
competition in the industry.
Chairman and Indepen-dent Member for
Frome Geoff Brock said he would have
liked to see the FIRB look at the
exclusive arrangement Viterra has with
Genesee Wyoming for the rail movement of
grain in South Australia.
"This would have been an ideal
opportunity to look at ways to make it
easier for non-Viterra players to
operate in SA," he said.
Late last week, Glencore's $6-billion
takeover deal moved a step closer, with
all the Australian regulatory approvals
completed.
The decision by the FIRB comes after the
Canadian government approved the deal on
July 15.
The final step that now needs to be
completed for Glencore in the
transaction is gaining Chinese
regulatory approval.
Select committee member Adrian Pederick
said in order to receive the Canadian
government's approval, Glencore had made
a series of commitments over a five-year
period, including:
- Increasing Viterra's projected capital
expenditure in Canada by more than
Can$100 million over five years.
- Investing Can$8m above Viterra's
projected expenditures in research and
development.
- Contributing to grain industry
initiatives in certain Canadian
provinces.
- Increasing contributions to programs
supporting the western Canadian farm
community by 25 per cent.
- Working with the government of
Saskatchewan on establishing a global
institute for food security.
Several conditions were also proposed by
the select committee on behalf of the SA
Parliament to FIRB and the ACCC, but Mr
Pederick said all of these had been
dismissed.
The conditions proposed included:
- Divestment of Viterra's ports assets
to break the existing monopoly.
- Investment in new infrastructure
matching Glencore's commitment to
implementing a $100m program of
infrastructure upgrades in Canada.
- Divestment of up-country storage and
handling services allowing competition
in some regional markets in SA.
- Divestment of other Viterra assets
similar to the 23pc divestment of
Viterra assets to Richardson
International and agriproducts to
Agrium.
- Locating of the Australian head office
in Adelaide.
"The select committee presented seven
conditions, however the transaction has
been approved without the points being
considered or implemented," Mr Pederick
said.
"Where is the guarantee of $100m
contribution to SA and the investment
into R&D?
"There has been no talk of divestment of
assets and, as a result, SA grain
producers will continue to be dominated
by a monopoly."
Glencore director of agricultural
products Chris Mahoney said the company
was pleased to have received FIRB
approval.
"For almost 10 years, Glencore has
forged close relationships with
Australian graingrowers," he said.
Committee on Grain Handling have
labelled the Foreign Investment Review
Board's approval of Glencore's Viterra
takeover a lost opportunity to improve
competition in the industry.
Chairman and Indepen-dent Member for
Frome Geoff Brock said he would have
liked to see the FIRB look at the
exclusive arrangement Viterra has with
Genesee Wyoming for the rail movement of
grain in South Australia.
"This would have been an ideal
opportunity to look at ways to make it
easier for non-Viterra players to
operate in SA," he said.
Late last week, Glencore's $6-billion
takeover deal moved a step closer, with
all the Australian regulatory approvals
completed.
The decision by the FIRB comes after the
Canadian government approved the deal on
July 15.
The final step that now needs to be
completed for Glencore in the
transaction is gaining Chinese
regulatory approval.
Select committee member Adrian Pederick
said in order to receive the Canadian
government's approval, Glencore had made
a series of commitments over a five-year
period, including:
- Increasing Viterra's projected capital
expenditure in Canada by more than
Can$100 million over five years.
- Investing Can$8m above Viterra's
projected expenditures in research and
development.
- Contributing to grain industry
initiatives in certain Canadian
provinces.
- Increasing contributions to programs
supporting the western Canadian farm
community by 25 per cent.
- Working with the government of
Saskatchewan on establishing a global
institute for food security.
Several conditions were also proposed by
the select committee on behalf of the SA
Parliament to FIRB and the ACCC, but Mr
Pederick said all of these had been
dismissed.
The conditions proposed included:
- Divestment of Viterra's ports assets
to break the existing monopoly.
- Investment in new infrastructure
matching Glencore's commitment to
implementing a $100m program of
infrastructure upgrades in Canada.
- Divestment of up-country storage and
handling services allowing competition
in some regional markets in SA.
- Divestment of other Viterra assets
similar to the 23pc divestment of
Viterra assets to Richardson
International and agriproducts to
Agrium.
- Locating of the Australian head office
in Adelaide.
"The select committee presented seven
conditions, however the transaction has
been approved without the points being
considered or implemented," Mr Pederick
said.
"Where is the guarantee of $100m
contribution to SA and the investment
into R&D?
"There has been no talk of divestment of
assets and, as a result, SA grain
producers will continue to be dominated
by a monopoly."
Glencore director of agricultural
products Chris Mahoney said the company
was pleased to have received FIRB
approval.
"For almost 10 years, Glencore has
forged close relationships with
Australian graingrowers," he said.
Comment