Elders was an agribusiness company founded in 1839, with an emphasis over the decades on wool broking. Over the years a number of well known stock & station agent businesses merged into Elders, for example Goldsbrough Mort & Co Ltd merged with Elders Smith & Co Ltd in 1963 (to form Elder Smith Goldsbrough Mort Ltd, which traded under that name until 1982), Younghusband Ltd in 1971; Pitt, Son & Badgery Ltd in 1976; and then Henry Jones IXL (to form Elders IXL Ltd) when John Elliott bought Elder Smith Goldsbrough Mort Ltd in 1982. In 1996 Futuris bought Elders IXL Ltd.
Futuris hasn’t been going well and in 2008 the company decided to concentrate on their acquired business’s core focus of agriculture, with a plan to divest unrelated business such as automotive interests. In April 2009 the decision was made to ditch the parent company name of ‘Futuris’ in favour of the iconic business name ‘Elders Limited’. (I just can’t help thinking of the strangler fig that gets its start in life by grafting onto a big healthy tree – then it takes over completely.)
I also can’t help but get the view that Futuris, at least as it was, was simply another one of those too-large companies that does not create or produce anything worthwhile in itself. Predatory-like, it simply existed to take over good quality smaller companies that others have started and worked into good going concerns, thus boosting the Futuris bank balance on the back of the efforts of others. While a number of the companies purchased may well have been in poor financial shape, i.e. needing a capital injection, acquisition by a large company so often doesn’t lead to a happy ending for those in the smaller company anyway (it just leads to a bare skeleton, that eventually disappears). It is an exceedingly long list of companies that Futuris Corporation has ended up with, since it was founded in 1981 (publicly listed in 1993). The list includes many well known rural businesses such as Primac Holdings Limited (Queensland based) and VPC (Victorian Producers Co-op) (both acquired via Elders). Futuris’s history looks like one big ego trip (or kleptomania, or at least acquisitiveness gone berserk) by whoever was approving of the buying. Such diversity of interests surely could not possibly result in business efficiency.
It is debatable whether the Australian Agricultural Company was better off for having been 43% owned by Futuris since the mid 1990s. Certainly in recent years, Futuris’s ownership has undoubtedly been very much to the detriment of the AACo. There have been boardroom kerfuffles galore (the fly on the wall would have had some fabulous true stories to tell). Numbers of talented people with solid agricultural experience, from the boardroom down, have left the company. To be replaced by some who I suspect couldn’t run a chook raffle profitably. With Futuris (now called Elders Limited) having finally completed the sale of AACo shares (14.9% to Dubai-based IFFCO and the rest to retail & institutional investors), and yet another boardroom upheaval which involved the installation of new AACo board chairman Brett Heading, hopefully the AACo can now concentrate again on running cattle stations well, in the long term, and energy will no longer be wasted on dealing with an owner who hasn’t wanted to an owner, for several years at least.
A poke around the internet dug up this gem, in the Futuris AGM presentation of 24 October 2002: ‘We maintain the view that AACo is an excellent asset and that its true value will be demonstrated in the long term. We will continue to support the company.’ It was only a few years later that it became public that Futuris wanted to sell their investment in the AACo. Thank goodness they’ve now gone. Apparently there are no Australian Agricultural Company plans to sell any more stations.
Tags: Pastoral companies