SunRice’s increased retail presence improves profits
SunRice last week announced a profit increase for 2014 that it will be passing on to its rice growers through a paddy price increase. Listed on the National Stock Exchange, SunRice has a dual share structure, with the economic interests held by shareholders, including active and former growers, their families and employees. SunRice is able to pay its grower-shareholders higher returns for the better prices it can obtain by controlling the supply chain of the products from the farm to the branded retail products.
SunRice says it will be paying an extra $20 per tonne for its 2014 medium grain rice crops, bringing the total pay-out to at least $380 per tonne, which is expected to further increase upon completion of full year accounts. SunRice chairman Mr Laurie Authur explained the extra profit return so far adds up to $49.7 million in unexpected profit returns to members.
The good results were partly attributable to prolonged drought in California but also to an increased consumer interest in expensive rice foods.
Long-grain rice has become less profitable compared with medium-grain rice. Prices were lower on long-grain rice with large supplies coming out of Thailand and other parts of Asia.
The California drought is also predicted to end soon.
SunRice and Riviana
SunRice has seen further success since acquiring the Riviana brand which produces a wide variety of processed foods. Popcorn, instant noodles and other types of foods are sold in Australian supermarkets under the Riviana brand.
Riviana also sells different types of rice such as Arborio used to make risotto and Basmati used to accompany Indian dishes. These speciality rices are also sold in smaller packets and represent a strategy of diversification by SunRice beyond selling bigger, bulk-buy retail offerings that SunRice once concentrated on.