FarmWorks to continue selling
FarmWorks has confirmed it will continue auctioning livestock at the Katanning saleyards despite last month’s announcement its livestock and rural property division will be divested.
FarmWorks commercial manager Ross Withers said discussions with interested parties to purchase the livestock and real estate arms were progressing.
“At this point we are confident the business operation will continue in its present form,” he said.
“We are negotiating with potential acquirers of the livestock operation and are confident it will continue in its current form.
“There is no intention for FarmWorks to prematurely exit any selling position.”
The rural service provider employs 10 staff in the WA and South Australian livestock divisions.
According to its website, there are 22 livestock sales agents aligned with FarmWorks, extending from the Pilbara to the Great Southern.
Among those surprised at the decision to sell two arms of the business is Cameron Bartram, of Sentinel Stockbroking.
“I am surprised they are getting rid of the real estate and livestock arms and focusing back on chemicals and fertilisers when they have a massive competitor in Landmark, which is owned by Canadian fertiliser giant Agrium which acquired Landmark as part of the AWB takeover deal,” he said.
Mr Bartram said the most likely interested party in the two arms for sale could be a private or smaller player.
“Agrium has only owned Landmark for six months and is still coming to terms with the business and Elders is still working through large debt issues from the global financial crisis,” he said.
FarmWorks recently sold 13 per cent of the company to Qunhui Xu, managing director of Chejiang XinNong Chemical Co, a Chinese agricultural chemical manufacturer with three plants, through a share placement valued at $700,000.
At the time, FarmWorks chief executive Rick Moody said getting the capital base right for FarmWorks was a key priority to position the company in the high growth ag-chemical sector in Australia.
Mr Bartram said one strategy for leaving real estate and livestock could be to sell while the market was at a high, a strategy often used by big players.
FarmWorks’ share price has halved in value to 10c after listing on the stock market 12 months ago.
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