Key Investment Highlights

Investment highlights of PrimeAg include:

  • Exposure to the growing global demand for soft commodities - reflecting world population growth, increasing affluence in emerging economies and increasing demand for biofuels, the demand for soft commodities is positive;
  • Economies of scale and innovative "Hub" structure makes PrimeAg a globally competitive low cost producer of agricultural commodities - a multiple Hub structure aggregates a number of farms within a close proximity to capture economies of scale through improved utilisation of machinery and labour and greater purchasing and marketing power;
  • Geographic spread of properties over 1,200 km mitigates climatic risk - PrimeAg properties may eventually stretch from the Liverpool Plains of NSW to Central Qld 1,200 km to the north. There is a low correlation for annual rainfall between these districts smoothing the effect that a drought in one region may have on the overall group's financial performance;
  • Production is further secured through the ownership of irrigation water entitlements - PrimeAg will own irrigation water entitlements in the Upper Darling and the Fitzroy (Qld) river systems. These entitlements mitigate climatic risk and increase production and financial returns from PrimeAg's cropping enterprises, subject to the availability of irrigation water;
  • Price risk is mitigated through the production of a diverse range of commodities and having the ability to switch between these commodities in response to price movements or climatic changes - being located in a region that can produce both winter and summer crops, and having access to irrigation water, affords PrimeAg great flexibility;
  • An experienced Board and management team with the skills and vision to build a significant Australian agricultural company - members of the Board and senior management have extensive experience in the agricultural and related industries. Each Board member holds or has held senior positions in their respective industries;
  • Agricultural commodity prices are not strongly correlated with Australian share prices on the ASX - history has shown that commodity returns have not been strongly correlated with other investment asset classes. As an ASX listed entity, PrimeAg will provide investors with a direct exposure to growth in soft commodity prices and appreciation in rural property and water entitlement capital values;
  • Quantitative and qualitative selection criteria, including return on investment, are used to evaluate and prioritise properties for purchase; and
  • Sustainability focus on efficient water use, efficient chemical use, reduced carbon emissions, efficient nitrogen use and increased carbon sequestration.