Grain merger deal agreed
TWO farmer-owned operations have combined to create a major new grain marketing and input supply business. Grainfarmers and Centaur Grain have merged to form Openfield, which is expected to handle around a fifth of the UK grain market, and become the third largest supplier in the UK of seed and fertiliser.
TWO farmer-owned operations have combined to create a major new grain marketing and input supply business.
Grainfarmers and Centaur Grain have merged to form Openfield, which is expected to handle around a fifth of the UK grain market, and become the third largest supplier in the UK of seed and fertiliser.
The proposed chairman of the merged business, Richard Beldam, said the new organisation, which will be working with more than 7,000 farmers, gave them the scale and structure to grow in size and influence.
“Openfield will have the flexibility, scale and high level of service which we believe is needed in today's marketplace to capture improved value across the supply chain,” he said.
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“Increasingly we believe this can only be achieved by companies that combine a national presence with a scale and structure that ensures efficient continuity of supply to its customers, managed through a network of regional offices.
“As our major customers continue to grow in size and influence, we have to do the same. Many of them are now looking for longer term committed supply contracts and Openfield fully intends to promote a similar expansion of the committed grain principle to support these contracts.
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“The aim is to ensure better continuity of supply of assured grain of known quality across the UK and at the same time guarantee provenance for some internationally-recognised brands through our strong local network of farmers.”
The business will be developing its ongoing relationship with a UK network of independent, farmer-owned central storage businesses handling around 900,000 tonnes of grain a year.
It also plans to increase its existing arable inputs business. When combined, the business will become the third largest supplier in the UK by volume of both seed and fertiliser. It will also be a “significant” supplier of agrochemicals through an ongoing relationship with UAP, it says.
Following a successful joint project earlier this year between Centaur and Grainfarmers which helped underline the potential benefits of a merger, Openfield will appoint DHL Exel Supply Chain to handle the procurement of grain haulage.
DHL Exel Supply Chain will establish a “control tower” at Openfields' headquarters in Colsterworth, Lincolnshire, which is expected to be responsible for 120,000 grain movements a year, and aims to provide the most efficient supply chain in the grain industry, and one which is expected to reduce road miles by up to 10%.
Both sets of shareholders and members are now due to be consulted, and will be asked to back the board's proposals before the new company's launch in November.
Openfield plans to establish a farmer council to represent the views of the new shareholders, and current Grainfarmers managing director Tim Davies will become chief executive.
“We have an exciting opportunity to combine the best of both businesses,” he said.