In 2005, with farmers facing rising fuel costs, a high Australian dollar and low commodity prices, a group of southern New South Wales frustrated and passionate farmers looked at adding value to canola as an alternative energy source. The group, the Lockhart Bio-fuels Group, conducted a feasibility study into bio-diesel production. While it commenced with high expectations, the study soon found that bio-diesel production from canola in the then economic environment was unviable. Although its investigations into bio-diesel ceased, the group continued meeting and searching for new ideas.

In early December 2008 the Group organised a special bus tour through Victoria to investigate various business opportunities, ventures, group structures and export opportunities as a means to research the most appropriate avenue to return more profits and service to farmers in regional southern New South Wales.

The tour was successful in that it provided the Group with guidance on what approaches might be possible and what initiatives should not be pursued. A Steering Committee was then formed with new passion, vision, structure and a desire to create a more profitable and sustainable rural community in their region.

(Members of the Steering Committee are pictured right)

The Way Ahead

The Steering Committee then set to work on how it would achieve these goals. It was considered paramount that any organisation established to be the vehicle had strong legal, accounting and operational structures, whilst maintaining the vision and passion of the people and businesses in our rural communities.

The idea of establishing a company with these aims and objectives was launched publicly in July 2009 and received support from farmers in the Lockhart and adjoining regions. Special public meetings were held to provide information about what was planned for the establishment of the Company.

After careful consideration, including a review of other farmer owned and controlled entities, the Steering Committee decided the most appropriate structure was that of an unlisted public company. Southern Agventure Limited was incorporated on 5 October 2009 with initial funds contributed by members of the Steering Committee. Funding was subsequently provided by the New South Wales Government to assist with establishment costs.

Southern Agventure Limited’s first Prospectus was released in October 2009, with an initial share offering to farmers, graziers and other potential investors. The Company attracted strong interest, with 165 shareholders taking up the offer and purchasing a minimum of 5,000 A Class shares.

The Steering Committee also had come to the view that as most farm businesses in southern New South Wales derive a significant proportion of their farm revenues from grain production, here was an area of potential opportunity. With deregulation of grain accumulation and marketing underway, the opportunity to establish an effective local operator in this sector was available. The aim was to have the grower based organisation become a force in the market, add value by increasing competition and services provided to growers and return profits to the local shareholders.

Following extensive and detailed discussions with Emerald Group Australia Pty Ltd, a company established to conduct grain accumulation and marketing activities, the Company entered into a Unitholders Deed on 15 October 2009 for a 50/50 joint venture with Emerald to establish Southern Ag Grain Pty Ltd to engage in grain accumulation and marketing activities in the southern New South Wales region. Southern Ag Grain was established in October 2009 and continues to trade successfully.

The ongoing success of Southern Ag Grain in line with the Company’s expectations has been the catalyst for consideration of further initiatives and opportunities. With this clearly in mind, in August 2010, the Company entered into a contract with Airmaroo Management Pty Limited for the provision of Executive Officer and related services to facilitate the next steps. This has provided the services of Mr Geoff Breust in the role Executive Director.

In 2011 the Company went to the market again with a Prospectus seeking more shareholders and a wider geographic coverage (an area roughly 250-kms from Wagga Wagga). The Prospectus was successful in raising further capital funding. It increased the number of shareholders to 232 and, following the commencement of grain storage facilities at Ungarie, New South Wales later that year, total shareholders to over 250.

Shareholders received a dividend of 10 cents per share fully franked for 2010/11 and an interim dividend of 5 cents per share was announced in July 2012 for the 2011/12 Financial Year.

In August 2011, Mr Breust was appointed to the full-time role of Managing Director and for the 2011/12 Harvest, the Company operated its first grain storage facility at Ungarie, New South Wales, providing a valuable facility for its local shareholders.