Managing Director's Report

Managing Directors Report - November 2011

2011 has been a tough year by any standard. With crops impacted by floods, poor growing conditions, a softer international market and a high Australian Dollar, there has been little positive news to report. The resolve and support of our grower base cannot be underestimated, having received the second largest crop in our history under very difficult circumstances. With the majority of the crop having been marketed, our staff have worked extremely hard to deliver as much value as possible in terms of price, clean seed yield and payment back to the grower. Having made losses for the season to date, we have shared some of the financial pain with our stakeholders and learned many lessons from this adversity. Bean Growers Australia is now looking forward to the new growing season with enthusiasm. There are a number of new projects and opportunities which will offer more value and profitability to our stakeholders.

In light of an excellent offer from Ruralco, Bean Grower's Board made the decision to sell its controlling interest in its rural merchandise subsidiary BGA AgriServices. BGA AgriServices will continue to operate under the same banner with the same staff but with a different shareholder. The sale crystallised significant value for all BGA AgriServices shareholders. A portion of the proceeds will be employed to enhance the core Bean Growers Australia business by lowering its financial exposure and to fund previously approved capital projects.

Commissioned in April at a cost of $1.4 million, the first stage of our Plant 2 redevelopment has seen service through the current season. The state of the art plant, consisting of Cimbria cleaning equipment out of Denmark has tripled capacity on our Plant 2 line. The De-Stoner has more than proved its worth this season enabling efficient removal of dirt clods and stones that would have otherwise made some lines unsaleable. It is planned that the second stage, which will enhance our existing polishing and colour sorting capacity, will be commissioned prior to the 2012 harvest.

With the increased growth in our business, pressure on segregated storage is now at an all time high. Early 2012 will see the removal of our 3,500t Bulk Storage Shed and 14 low quality seed silos and the construction of 3,500t of sealed, aerated, segregated storage will replace the outdated facility. Individual silos of 155t and 200t constructed by Denny’s Engineering will provide the necessary segregation for the future. Under-silo belts planned for the new storage system will, allow us to directly feed both cleaning plants from over 7,500t of storage, giving us considerable savings in labour costs and efficiency.

Management and staff (with the support of the Board) are continually striving to keep Bean Growers Australia at the forefront of the pulse industry. We wish everyone the best for the New Year ahead and look forward to working with established and new customers in 2012.

Lloyd Neilsen

Managing Director

Bean Growers Australia