Australians hoping to buy a piece of the burgeoning Stahmann Farms nut business have lost out to the long-term investing credentials of Canada’s Public Sector Pension Investment Board.
PSP Investments, one of Canada’s biggest pension funds, this week teamed up with management of the expanding nut grower, processor and marketer to become the pioneering pecan company’s major shareholder.
Established east of Moree in 1971 as the Australian arm of the US-based Stahmann family’s 85-year-old pecan business, Stahmann Farms Enterprises (SFE) is Australia’s largest pecan grower and processor.
SFE produces and packs the vast majority of Australia’s 3000 tonne pecan crop and is also the fourth largest macadamia processor.
The operation, which split from its US parent in 2006, wants to double and diversify its nut plantation footprint into walnut and macadamia farming.
PSP is already known in the Queensland beef industry for its two-year-old investment in Hewitt Cattle Australia.
The Ottawa-based pension fund’s latest deal ends several years of equity option investigations by Stahmann.
At one point market speculation had the Toowoomba-based business gearing up for a 2017 stock market float to fund its vertically integrated growth plans.
“We looked at a range of options and we looked hard for Australian money,” said SFE’s managing director, Ross Burling.
“We considered everything, but the Australian options didn’t offer the long-term support we really need.
“This is a very long-term business – we’re planting pecan trees today for owners who will be still harvesting from them in 100 years.
“This capital option and these people are what we wanted.
“Their plans suited our plans exactly.”
He said PSP had an investor focus based on strong partnerships with best-in-class and like-minded local operators.
PSP Investments has about $126 billion in assets funding the retirement plans of Canadian government employees, including the Royal Canadian Mounted Police.
Since 2015 it has also backed Central Queensland’s Hewitt cattle company’s $90 million herd and property expansion program.
While no details of the size of PSP’s investment or share in the Stahmann enterprise have been released, the fund reportedly has about $500m committed for agricultural investment plans, including more funding into beef country and aquaculture.
Mr Burling said PSP’s capital injection would enable the Stahmann business to further expand processing and marketing activities as extra nut volumes were harvested.
A multi-million dollar upgrade at the Toowoomba plant is already underway to improve its pecan and macadamia cracking and packing capacity.
“We want to produce the world’s safest and best looking product,” he said.
Stahmann’s consumer packing division sends nuts to supermarkets Australia-wide and overseas, including the big Trader Joe’s grocery chain in the US and Chinese e-commerce sites Alibaba and JD.com.
In addition to SFE’s original “Trawalla” farm in NSW which has 100,000 bearing trees, the company is developing three the new adjoining holdings planted to about 70,000 trees.
Its 800 planted hectares will almost double with a further 650ha of new irrigated pecan plantings, to be followed by more pecan and macadamia production outside the Moree district.
SFE will also look at cooler climate zones after walnut trials planted at “Trawalla” in 2010 proved unsuccessful.
“On the back of booming demand for tree nuts, future investment is expected to support regional development in new and existing locations in NSW and Queensland,” Mr Burling said.
The company’s existing owners, Matthew Durack, Richard Sampson Genest and Mr Burling will be joined by a PSP representative and SFE’s chief financial officer, Robin Stinson, on a revamped board of directors.
With ample funds to support “significant new expansion projects”, Mr Burling said the experienced management team and SFE’s dedicated workforce would be building on Shahmann’s successful history.
Stahmann Farms was established by Deane Stahmann junior, whose first harvest at “Trawalla” in 1978 was followed by construction of the Toowoomba processing plant in 1982.
In 2008 long-term associates Mr Durack and Jeff Dodd bought the nut business from its ailing founder, who died four years ago.
Mr Burling, who spent his youth at “Trawalla” 30 years ago and was mentored by Mr Stahmann, became chief executive officer in 2014 soon after Mr Dodd departed the business.
Andrew Marshall
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
