In a significant move, Australia's largest co-operative, CBH, is looking to end its long-standing partnership with Indonesia's Salim family. The joint venture, Interflour, owns flour mills and port assets across South-East Asia.
The Perth-based co-operative, controlled by about 3,500 Western Australian farmers, has been part of this venture for nearly two decades. However, the partnership has recently struggled with profitability due to rising grain prices.
"This reduced flour margins as the higher cost of grain was not able to be recovered," CBH stated in its annual report.
Interflour operates nine flour mills across Indonesia, Malaysia, Vietnam and the Philippines. Despite a revenue of $1.3 billion last year, the company's profit was minimal, with CBH's share being only about $100,000.
The potential sale could allow CBH to focus on new projects, including a large-scale oilseed-crushing plant south of Perth. This move aligns with the growing demand for biofuels in Australia.
Meanwhile, the Salim family is making moves elsewhere in Australia. Their company, Mach Metals Australia, is currently seeking control of Rex Minerals and its Hillside copper project in South Australia.
As CBH considers its options, this potential exit marks a significant shift in Australia's grain industry landscape. The co-operative's decision could have far-reaching implications for both local farmers and the South-East Asian flour market.
In a welcome boost for shareholders, ASX-listed medical imaging company CurveBeam AI saw its shares jump 15% on Tuesday, 9 July 2024. The surge comes on the back of significantly improved sales figures for the final quarter of the 2023-24 financial year.
CurveBeam AI specialises in CT scanners for orthopaedic use and AI-powered software for bone fragility diagnosis. The company's CEO, Greg Brown, attributes the sales uptick to growing recognition of their weight-bearing imaging technology among orthopaedic practitioners.
"We believe these purchase orders show a building recognition and acceptance of the benefits of our technology by the orthopaedic community," said Brown.
Despite the positive news, CurveBeam AI faces ongoing challenges. The company reported a $14.7 million net loss in H1 on revenue of $3.53 million. However, with $15 million in cash reserves and potential expansion into knee and hip surgery applications, analysts remain optimistic about future growth prospects.
Lodge Partners senior analyst Rachel Levin highlighted the significant market opportunity:
"In the US alone, approximately 1.6 million hip and knee joint replacements are conducted annually, compared to 350,000 ankle-related procedures."
As CurveBeam AI continues to gain traction in the orthopaedic imaging market, investors will be watching closely to see if this sales momentum can be sustained in the coming quarters.
In a significant milestone for Queensland's renewable energy future, construction has begun on the long-awaited CopperString project. The $5 billion initiative aims to connect Townsville and Mount Isa with an 840-kilometre high-voltage transmission line.
The project's first phase involves building accommodation for up to 550 workers in Hughenden, a small town 1,400 kilometres north-west of Brisbane. This workforce will be crucial for constructing a nearby substation and initiating the transmission line's development.
"CopperString will be the catalyst for transforming Queensland's north and north-west – opening up mining opportunities, creating more jobs and unlocking critical minerals," said Premier Steven Miles.
CopperString is a key component of the Labor government's ambitious target to achieve 80% renewable energy by 2035. The project will enable large-scale renewable projects in North Queensland to feed into the national grid, connecting the state's north-west to Townsville's manufacturing and port facilities.
Construction of the transmission line is scheduled to commence in mid-2025, with the entire project expected to be completed by 2029. The Queensland government has allocated $8.5 billion for CopperString as part of its broader $25 billion investment in the state's energy "SuperGrid".
Despite challenges, including Glencore's announcement to close copper mining operations in the region, the government remains committed to the project. CopperString is set to benefit major industrial users in and around Mount Isa, potentially reshaping the economic landscape of North Queensland.
The Riverside Company, a global mid-market private equity firm, is strengthening its presence in Australia with a key appointment. As of 10 July 2024, Ed McManus, former CEO of Meridian Energy and Deliveroo Australia and Singapore, has joined the firm as a senior operating partner.
McManus will lead Riverside's six-person local operating team, focusing on enhancing revenue and earnings for the Riverside Australia Fund. This fund currently owns several prominent businesses, including:
Additionally, McManus will chair the board of the newly acquired Virtual IT Group on Riverside's behalf.
"Ed is a highly accomplished executive with a deep understanding of the Australian market and a proven ability to unlock new value in businesses," said Simon Feiglin, Riverside's Melbourne-based managing partner.
McManus's career highlights include:
Riverside targets businesses with up to $25 million in annual earnings, aiming for significant growth potential. Recent successes include the sale of price prediction software company Energy Exemplar to Blackstone and Vista Equity Partners, and the exit from road safety business RWTA.
With McManus on board, Riverside is well-positioned to continue its successful investment strategy in the Australian market.
Missed out on Nvidia's AI boom? Don't fret. Australian investors now have a new way to ride the artificial intelligence wave, thanks to BFA Global Investors.
BFA Global Investors, led by Jonathan Belz and Gavin Ezekowitz, has secured a $14.8 million stake in Groq AI's latest funding round. This Series D raise, totalling $US300 million, values the California-based AI chip maker at a whopping $2.2 billion.
"This investment offers Aussie high-net-worth individuals and family offices a unique opportunity to tap into the booming AI chip market," said Jonathan Belz, former Goldman Sachs executive.
Founded by ex-Google engineer Jonathan Ross in 2016, Groq is making waves in the AI chip industry. The company aims to develop faster, more efficient chips for machine learning, potentially rivalling industry giant Nvidia.
With projected revenues of $4.3 billion and EBITDA of $2.1 billion by 2027, Groq is positioning itself as a major player in the AI revolution.
This isn't BFA's first rodeo in the tech space. The firm has previously invested in video game giant EPIC Games and AI start-up Anthropic. Most recently, they've backed early-stage venture capital firm Playground Global.
As the AI boom continues, Australian investors now have more options to get in on the action, thanks to firms like BFA Global Investors bridging the gap between local capital and global tech opportunities.
Transgrid's chief executive Brett Redman claims that momentum is building for the urgent expansion of NSW's transmission grid, despite ongoing challenges with the company's largest project, EnergyConnect.
The $2.3 billion EnergyConnect project, a 900-kilometre cable between South Australia and NSW, is currently experiencing contractual disputes, cost increases, and delays. However, Redman remains optimistic about future projects.
"Once you've done one, the second becomes easier and the third becomes easier... We're on the cusp of that," Redman said at a CEDA lunch in Sydney.
Redman highlighted imminent progress on the $4.9 billion HumeLink project and the VNI West interconnector with Victoria. These form part of Transgrid's ambitious plan to build a 2500km "superhighway" of transmission in NSW.
The CEO emphasised the need to expand the grid to avoid further life extensions of carbon-polluting coal plants. He referred to the recent deal to extend the life of Origin Energy's Eraring plant by two years, stating that "further deferrals are neither physically nor commercially desirable".
In related news, AGL CEO Damien Nicks declared that new hydro generation and storage capacity will be "critical" for NSW's clean energy transition. AGL is exploring pumped hydro projects, including a new venture near Muswellbrook and expansions of existing plants.
However, Nicks stressed that market support and stable policy are necessary for these capital-intensive projects to proceed, potentially requiring special focus in NSW's energy infrastructure roadmap.
Perpetual, a leading Australian investment firm, is set to raise $100 million for its sharemarket-traded credit fund. Unlike many private credit offerings, Perpetual's strategy steers clear of the popular real estate-focused lending sector.
The Perpetual Credit Income Trust focuses on more traditional areas, including:
Michael Korber, Perpetual's fixed income team leader, explains the fund's approach:
"We prefer to invest in larger corporates which have cash flow, and [are] less susceptible to market downturns."
Korber warns of the risks associated with commercial real estate lending:
"[Commercial real estate] is an interesting proposition because it is asset-based and not really invested in through a cash flow lens ... that is an area where I think the risks, by nature, are higher."
The Perpetual Credit Income Trust has delivered impressive results:
The capital raise comprises $65 million for new investors and $35 million for existing unit holders, with units offered at $1.10 each.
As investors seek exposure to credit markets amid rising interest rates, Perpetual's conservative approach offers a compelling alternative to riskier real estate-focused strategies.
In a significant move for Australia's rare earths sector, Chinese heavyweight JL Mag is set to acquire a near 10% stake in Hastings Metals Technology. The deal, worth $7 million, will see JL Mag gain a seat on Hastings' board and potentially reshape the future of rare earth production in Western Australia.
The investment comes at a crucial time for Hastings, which is seeking to advance its Yangibana rare earth project. Having already invested $153 million, the company needs an additional $321 million to complete the mine and concentrator.
"We welcome JL Mag as a long-term, strategic investor," said Hastings executive chairman Charles Lew.
JL Mag, a major supplier of permanent magnets, brings valuable expertise to the table. The deal could pave the way for Hastings to move beyond mining into producing permanent magnets, critical components in advanced technology and defence systems.
Despite recent tightening of foreign investment rules in critical minerals, the JL Mag investment falls below the threshold requiring Foreign Investment Review Board approval. This highlights the delicate balance Australia is striking between attracting foreign investment and protecting strategic assets.
With production at Yangibana scheduled to begin in 2026, this investment could be a game-changer for Hastings. However, challenges remain, including weak rare earths pricing and the need for substantial additional funding.
As Australia seeks to establish itself as a key player in the global rare earths market, deals like this one between Hastings and JL Mag may become increasingly common, reshaping the industry landscape.
In a daring move, Aware Super, the $175 billion industry superannuation fund, is set to shake up its real estate strategy. The fund plans to increase its offshore holdings and capitalise on global distress in commercial property, with a keen eye on London's office market.
Aware's property portfolio, valued at $11 billion, has consistently outperformed industry benchmarks thanks to its contrarian strategy. The fund's head of property, Alek Misev, explains:
"We like playing that game, where we can add value by buying in well, and then getting that 'pop' once things become more liquid."
This approach has seen Aware's portfolio shift dramatically over the past decade, moving away from traditional office and retail investments towards a diverse mix of residential and industrial properties.
With a growing team in London, Aware is targeting opportunities in the UK capital's property market. The focus is on older office buildings ripe for refurbishment, particularly in prime locations like the West End and City of London.
Misev notes, "We're going into a different environment where development doesn't always make sense. Now we need to look at whether we can buy existing assets at higher cap rates."
Currently, 70% of Aware's property portfolio is in Australia. However, the fund aims to increase its offshore holdings to 40-50% in the coming years. This strategic shift positions Aware as one of the few Australian players willing to tackle the global property market head-on.
As the property landscape evolves, Aware Super's bold, countercyclical approach could set a new benchmark for Australian superannuation funds in the global real estate market.