SunRice to acquire Queensland-based Blue Ribbon Rice Group’s rice assets
Australian rice company SunRice Group has announced it has entered into an agreement to acquire the rice milling assets of Blue Ribbon Rice Group (Blue Ribbon), which are located in Brandon in North Queensland’s Burdekin region.
Blue Ribbon, which commenced operations in 2008, owns a single rice milling and packaging plant that last year produced 2,000 tonnes of processed rice. Although this volume represents less than one per cent of Australia’s rice sales, with its climate and secure access to water, SunRice said the Burdekin region was regarded as “one of the most promising rice-growing areas outside of the Riverina”. The assets acquired by SunRice include property, plant and equipment.
Blue Ribbon acquisition part of strategy to develop domestic supply
SunRice said the acquisition would complement its existing supply of rice from the Riverina region in New South Wales.
SunRice said the acquisition formed part of its strategy to invest in and develop sources of domestic supply, in particular, the supply of specialty rice varieties. While the potential supply volumes from Blue Ribbon were not material to the overall volumes for SunRice, the acquisition will help over time to strengthen SunRice’s ability to successfully target premium, niche export markets, according to the Company. SunRice said the acquisition will also enable the Company to further diversify and “increase the resilience” of its earnings.
Benefits of Burdekin region
SunRice said the Burdekin region offered attractive agronomics for rice growing, including favourable water supply and reliability. Local conditions are particularly suited to the growing of specialty rices, including fragrant varieties and specific long grain options, which SunRice said would “increase the overall competitiveness of Australian rice”.
Additional research and development will be undertaken to maximise SunRice’s growing options through its Rice Research Australia (RRAPL) subsidiary.
SunRice said it was “uniquely positioned” to add value and to develop the Burdekin region’s rice industry and the potential of Burdekin-grown rice by contributing the Company’s agronomic support, integrated supply chain, distribution network and international sales and marketing capability.
In addition, SunRice said minimal capital investment was required for Blue Ribbon’s current milling assets, which are well located in the heart of the region’s rice growing area and within close proximity to Townsville Port.
A further announcement will be made at the completion of the acquisition, which is expected during September 2014. The transaction is also subject to clearance by the Australian Competition and Consumer Commission (ACCC).