Host: Yougawalla Pastoral Co.
Written by Haydn Sale – Manager, Yougawalla Pastoral Company
In 2017 we concluded the Sale of Yougawalla Pastoral Company to a Hong Kong Family. The company Jane and I, along with two city-based partners, established 10 years ago with one property and 800 head was eventually handed over to the new owners with 3 owned and 3 sub-leased properties and 46,000 head of cattle. It certainly had been an eventful and hectic ten years to this point. With the sale process completed and the dust settling on the changeover and partnership dissolution we hit a period of introspection that has continued for the best part of a year. Where to now?
Jane and I as part of the sale are contracted to stay and run the business for the new owners for a period of two years. We were happy to do this as we feel a strong commitment to the staff we work with who have worked tirelessly to help us build the business, to make sure the transition was ok for them too. Of equal importance was the commitment we felt to the aboriginal communities we work with on our subleases to make sure the transition was successful for them as well. Not owning the business and the feeling of losing some control and attachment to what you have built has certainly taken some getting used to. There was also the much-debated specter of foreign ownership of ag land and had we made the right decision to sell to a non-Australian entity
The foreign ownership issue I have to say has never bothered me. If you look at the history of investment in Australian agriculture, it has always relied heavily on foreign investment to grow and prosper, spanning all the way back to Vesty, AA Co and more that helped build the north. CPC, one of the largest cattle companies in Australia is owned by a British hedge fund. For a country with a small population and a relatively small and capital starved economy this is the only solution to develop and grow a business that is vast and capital hungry and most importantly needs patient capital to succeed. These are not short-term investments, in my mind once you commit, you are in for minimum of ten years or you shouldn’t bother.
Some of the arguments against foreign investment include, “food security, they will take away all our produce or control the sales and increase our prices”. Australia exports 75% of what we produce, so therefore one country/entity would need control 75% of all production to really lead to a food security situation, not possible. “We will lose control of the land”, the land is controlled by private enterprise already, no matter where they are from, and the collective does not have control of the land, which is good thing unless you have a communist bent, but most importantly the new entity cannot take the land away. At some point the entity will most likely exit Australia and if they have spent money to develop and increase the productivity of the land they leave behind then that is a really good thing.
So with all these thoughts and uncertainties swirling around we have embarked on a new chapter in our working (and as station life is, our personal) lives. So far, we have been lucky and to date things have been going well. We still have all our original permanent staff, continue good relations with our aboriginal sublease partners and have undertaken a huge development program this year with a around $6,000,000 spent so far on water development, fencing and station infrastructure. The same is planned to be spent again next year. We have taken on a new sublease called Lake Gregory with the Mulan community and already started development work there this year. We have budgeted to spend $2,000,000 there over the next two years to improve the station, increasing productivity, providing jobs for the local community and making the property viable when at the end of our term it is handed back to the Mulan Community owners. If this capital has come from overseas and will always remain on Australian soil, then this is a great result.
So we are happy with how it is going, not withstanding the normal trails and tribulations of station life and intend to stay on and play a part in the exciting growth strategy our new owners want us to drive. I think life is always full of uncertainties and unless you flesh them out with an open mind then great opportunities may pass you by. The industry is in a fantastic space at the moment with opportunities for young people to enter and make a career in ag in abundance. Capital investment drives industry growth and job creation, what nationality that capital is makes no difference. An injection of new blood into the business has so far been a cathartic event.
New development means 30 new tanks this year.
New Development means 10 new bores.
New development means 500 km of fencing.