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Agri-Biz & Commodities - Marketing


AWB plans investment in agri-produce marketing

G. Chandrashekhar

Mumbai , Dec. 20

ONE of the world's largest wheat marketing and management companies and Australia's largest agribusiness firm, AWB Ltd (formerly Australian Wheat Board, now corporatised), is here in India with concrete plans to invest in agri-produce marketing services and infrastructure.

The multinational - which markets and trades wheat worth up to $5 billion to 50 countries as well as a range of other grains domestically and overseas - believes that its international agribusiness expertise could be leveraged in India through the value-addition and trading route and total logistics services for the expanding farm sector. Identifying inadequate rural infrastructure as a weak area of Indian agri-produce marketing, AWB has plans to build about 20 warehouses across the country, each to accommodate 10,000 to 15,000 tonnes of grains — mainly cereals, oilseeds and pulses.

AWB is the latest MNC to enter the burgeoning Indian agricultural sector. It is building a warehouse in Kota, Rajasthan to store up to 10,000 tonnes, while work on another warehouse of the same size is expected to commence soon in Madhya Pradesh. AWB is gearing up for the upcoming Rabi (summer harvest) harvest season.

"We are here as long term players to participate in and contribute to the growth of Indian agriculture and to set up a 100 per cent subsidiary in New Delhi under the name and style of AWB India Pvt Ltd early this year," said Mr Andrew Lindberg, Managing Director of AWB Ltd, who was in India recently.

AWB is looking to tie up with local partners for its warehouse business. The idea goes beyond mere warehousing to the creation of value-added products for private label marketing, a rapidly expanding area of activity in the country, Mr Lindberg explained.

The company is also planning to replicate in India the Landmark-AWB integrated business model developed in Australia whereby hundreds of outlets across the nation act as `one-stop shops' for all the physical and financial needs of the rural farmers.

A warehouse receipt would be issued, which could be pledged to take a loan (of up to 80 per cent of value), to farmers.

Farmers are also free to sell their produce in advance, but price it at the time of delivery, said AWB officials. NCDEX terminals will be used for price discovery.

The company is looking at the organic establishment of a domestic trading fund within India for commodity origination, distribution to markets, toll crushing of oilseeds, trade and structured finance.

AWB India has already achieved a turnover $50 million during the current year and hopes to double it to $100 million in 2006.

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