Management buy-out for Tamworth Wheat Starch Plant

Grain Products Australia has signed a contract to purchase the Tamworth Wheat Starch Plant of Penford Australia Limited in a management buy-out.

Grain Products Australia is a new company established by the operations manager of the Tamworth plant, Henry Segerius, and a former managing director of Penford Australia, Robert Lowndes. Major equity for the buy-out has been provided by Barony Trust Limited, a UK-based private family company, as well as the plant’s largest customer, Itochu Corporation of Japan and its Australian subsidiary, Itochu Australia Limited.

Segerius will continue as Operations Manager for the plant while Lowndes has been named as Managing Director of Grain Products Australia.

In making the announcement, Lowndes said the Tamworth Wheat Starch Plant will increase its product range and serve a broader range of customers under Grain Products Australia’s management.

“The Tamworth Wheat Starch Plant has a very talented and dedicated workforce and is located in the heart of prime wheat growing areas, which is important for the high-quality wheat gluten and starch we make. In Japan, gluten produced at the Tamworth plant is regarded as the best in the world.

“Over the next 12 months, Grain Products Australia will invest $6.5m in new equipment to make modified starch products, primarily for the Japanese market. We also plan to double production in that period to serve an increasing number of local and international customers,” commented Lowndes.

According to Segerius, the management buy-out is great news for customers, employees and the Tamworth community.

“The past few years have been challenging ones for the Tamworth Plant. The business was impacted by higher wheat prices and staff were concerned the plant may close. This management buy-out will provide certainty and stability for the Tamworth team and new opportunities for growth. I am particularly pleased that all current employees will be offered positions with the new company, retaining full entitlements.

“Itochu’s investment in Grain Products Australia is evidence of its commitment to our long-term viability. As a significant and longstanding customer, Itochu recognises the value and quality of our products and has asked us to produce a new range of modified starch products for the Japanese market,” Segerius said.

Commenting on the announcement, Ryuzo Saito, Chief Executive Officer of Itochu Australia, said his company had been importing products from the Tamworth plant for over 20 years, originally under the name of Fielder’s Starches.

“We have a high regard for the quality of Tamworth gluten and for the enthusiasm of its staff. We are very pleased to invest in Grain Products Australia and support the future of the Tamworth plant.”

The sale is expected to be completed on 27 November 2009.