Regina pulse processor and exporter Alliance Grain Traders has a letter of intent in hand to buy and expand an inland pulse crop and grain handling terminal in South Australia.
The deal would give Alliance control of Balco Holdings’ terminal at Bowmans, about 100 km north of Adelaide and east of Port Wakefield on the Great Australian Bight.
Alliance, which bills itself as the largest lentil and pea splitting company in the world and already owns Australia Milling Group in Victoria state, said its expected purhcase costs of about C$10 million at the Balco facility include “capital expansions and improvements.”
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Alliance CEO Murad Al-Katib, in the company’s release, described the deal as a “strategic ‘tuck-in’ acquisition that will allow us to be operational for what currently appears to be a promising new crop in Australia harvesting late in 2010.”
South Australia and its Yorke Peninsula region are “generally very reliable production areas for pulses (and) historically, the crops are more consistent and yields generally hold up well in cases of drought,” he said.
“The distance between our plant in Victoria and Balco will give (Alliance) good diversification of our drawing areas and production bases in Australia.”
Alliance board chairman Huseyin Arslan added that the Balco deal “bolsters our lentil, chickpea and faba bean platforms, allowing us to establish a significant foothold in South Australia” for the company’s value-added pulse crop business.
The Balco site is also next to the Bowmans Inland Container Terminal, South Australia’s first inland container terminal, served by road and by direct rail service to Adelaide and Melbourne five days a week. Container trade through the terminal last year ran at about 2,000 containers a month.
Pending due diligence and approval from the company’s board, the Balco deal is now expected to close by about Sept. 30, Alliance said.
