Mission, Vision and Strategy

Mission: An international leader in food ingredients and agribusiness, creating value by connecting consumers and producers.

Vision: Grow as our customers’ preferred partner – driven by our passionate people and assets around the world. 

 

Strategy

GrainCorp’s business model is based on:

 

  • Three core grains - wheat, barley and canola. GrainCorp focuses on the ‘drier climate’ grains where GrainCorp has comparative advantages of grain origination, freight differentials and technical expertise.

 

  • Three integrated grain activities  - storage & logistics, marketing and processing. GrainCorp creates and captures value in its core grains along the grain chain, with insight into consumer requirements in these grains.

 

  • Three operating geographies - Australasia, North America and Europe. These regions collectively service over 50% of the global trade in GrainCorp’s core grains, providing market insight, price risk management and multi-origin capability.

 

GrainCorp creates and captures value for consumers, growers and shareholders from the following competitive advantages:

 

  • Strategic assets - GrainCorp’s unique “end to end” infrastructure network at all stages of the grain chain in GrainCorp’s three core grains.

 

  • Freight advantage - Proximity to the world’s growth markets for grain: Asia, Middle East and Africa

 

  • Grain Origination - Access to grain with strong quality advantages to satisfy a diversified range of consumer products.

 

GrainCorp is currently pursuing strategic initiatives aimed at delivering incremental underlying EBITDA of approximately $110 million by the end of the 2016 financial year. GrainCorp expects to invest $250 million in capital expenditure to implement these initiatives (Excluding $20 million of capital expenditure spent in FY12 on “Gamechanger” initiatives).

 

a. “Gamechangers” initiatives

 

On 24 May 2012, GrainCorp announced the “Gamechangers” plan to deliver $40 million of incremental EBITDA by the end of the 2014 financial year. On 15 November 2012, the company subsequently upgraded this plan to approximately $45 million of incremental EBITDA by the end of the 2015 financial year. Under the “Gamechangers” plan, GrainCorp expects to invest $70 million in capital expenditure13 on the implementation of the following initiatives:

 

• Storage & Logistics – Initiatives underway to strengthen and optimise the grain supply chain by improving efficiency to maximise grain volumes.

 

 Marketing – Initiatives underway to grow the GrainCorp marketing business, both domestically and internationally, through volume and margin growth by broadening relationships with customers and expanding the origination footprint.

 

• Malt – Operational excellence initiatives underway, as well as strategies to capture additional malt supply chain value by harnessing the grain processing footprint and capability to develop superior customer offerings through a global customer proposition in malt sales and barley procurement.

 

b. Asset Optimisation initiatives

 

On 15 November 2012, GrainCorp announced the Asset Optimisation initiatives to deliver approximately $45 million of incremental EBITDA by the end of the 2016 financial year. Under the Asset Optimisation plan, GrainCorp expects to invest $180 million in capital expenditure on implementation of the following initiatives:

• Oils – A number of initiatives have been identified within GrainCorp Oils. An integration plan is being implemented to realise synergies.

 

GrainCorp is developing a plan to strengthen and optimise the Oils network, building on the company’s leading Australian presence.

 

• Ports – GrainCorp has a program underway to rollout continuous improvement initiatives across the Ports business and increase non-grain volumes at the bulk grain port terminals and grow bulk liquid terminal capacity to service growing demand for storage of non-edible oil bulk liquids.

 

c. Port Flexibility initiatives

 

GrainCorp’s Port Flexibility initiatives were announced on 15 November 2012 and are expected to deliver incremental EBITDA of $20 million by the end of the 2016 financial year and requiring minimal capital expenditure.

 

Subsequently, on 30 November 2012, GrainCorp announced two developments that are expected to substantially improve the flexibility and international competitiveness of the company’s bulk grain port terminals:

 

• the ACCC confirmed that it will not object to GrainCorp offering long-term agreements to exporters for access to its ports; and
• the Australian Federal Parliament passed the Wheat Export Marketing Amendment Bill 2012 which provides for an industry code of conduct which would, if prescribed, replace the existing Port Access Undertaking arrangements from 1 October 2014.

 

These new port protocols are expected to allow GrainCorp’s port terminals to operate with increased planning and flexibility. This provides GrainCorp the opportunity to significantly improve the efficiency of its bulk grain export operations, allowing for better long-term planning and improved demand management.

 

In May 2013, GrainCorp offered and customers secured 3.8 million metric tonnes in long term capacity for the 3-year period 1 October 2013 to 30 September 2016.

     

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