Skin graft-focused biotech PolyNovo is poised to re-enter the ASX 200 in March, with Macquarie analysts expecting $67m worth of shares to change hands as it reclaims its spot in the benchmark index.

The company, chaired by boutique investment banker David Williams, was removed from the index of Australia’s 200 biggest listed companies last year after its shares sunk as low as 85c in May.

At the time, short-sellers had targeted 11.5 per cent of PolyNovo’s stock, and following its exit from the ASX 200 lost the support of index-based funds.

But in the past six months the company’s shares have rebounded more than 45 per cent to $2.39, giving it a market value of $1.64bn. It has capped off record half-year sales, delivering revenue exceeding $5m a month for the first time, as it builds momentum in the US and expands into new markets, with short-sellers now targeting 2.5 per cent of its stock.

Macquarie analysts named PolyNovo as one of the “standout” stocks set to re-enter the ASX 200 this year. It is predicting five changes to the benchmark index, with Syrah Resources, Omni Bridgeway, NRW Holdings and Ioneer also on track for addition.

Meanwhile, Macquarie expects SmartGroup, Novonix, Ramelius Resources and Domain Holdings to lose their spots as a result of the ASX 200’s rebalancing.

Macquarie estimates there will be about $67m, or 26.4 million shares, of incremental demand from index funds due to PolyNovo’s re-entry to the ASX 200 — the equivalent of about 10 days of daily trading.

From last May, Mr Williams has been on a spending spree, buying almost $7m worth of PolyNovo shares, saying he “had enough” of the short-sellers and the “dampening effect” of index funds leaving the company following its exit from the ASX 200.

“The company’s recent growth in US sales but also sales in Canada, HK, UK, and Australia has been a very impressive 67 per cent increase half on half,” he said.

“Surgeons worldwide are heralding the technology as not only life saving but changing the way surgery is done.”

PolyNovo has developed a synthetic skin for burns and soft-tissue regeneration, which in recent years has been used to treat Australian bushfire and New Zealand volcano victims.

It received US Food and Drug Administration clearance for its NovoSorb MTX product last September.

MTX leverages the technology platform underpinning the clinical success of the company’s other product, BTM, but without a sealing membrane.

With MTX, the wound can be closed either with a skin graft or allowed to heal by contraction and formation of an epithelial layer, simplifying wound management. It is indicated for use in partial and full thickness wounds, pressure ulcers, venous ulcers, chronic and vascular ulcers, diabetic ulcers, and surgical and trauma wounds. Crucially, the MTX product expands PolyNovo’s addressable market in the US by an estimated $500m.

The company’s revenue surged 62.2 per cent to $29.5m in the six months to December 31, based on unaudited accounts. In three of those months during the half-year, it generated sales of more than $5m. This compared with delivering $2m a month in sales in early 2020 before Covid-19 hit Australia.

Elsewhere, Macquarie is only expecting one change to the ASX 50 — with job search company Seek making way for mining giant IGO. Meanwhile, it says Stanmore Resources, Terracom and Silex Systems will be three “automatic” additions to the ASX 300, given the index has 297 stocks currently listed.

“As usual, there is a long list of potential deletions but we only see another seven stocks that are ranking high enough to be added,” Macquarie said of the ASX 300, with other additions including Tietto Minerals, Renascor Resources, Mount Gibson Iron, Bowen Coking Coal, Weebit Nano, Adriatic Metals and Ridley Corp.

It expects Aurelia Metals, Australian Strategic Materials, Pact Group, Betmakers Technology Group, City Chic Collective, Southern Cross Media Group and Bravura Solutions to be deleted from the ASX 300.

Dressed in a crimson blazer, David Williams reclines into a burgundy leather seat at Collingwood’s Smith Street Bistrot where chef Victor Blain serves him the restaurant’s caviar service.

Like the best champagne, the dish is synonymous with luxury and extravagance. But not so much today, says Mr Williams – one of Australia’s prominent agribusiness bankers – as he spreads a dollop on to a Merimbula oyster.

“(Last year) was all about entrees of yellowtail kingfish but 2023 is all about bringing caviar to a wider audience,” he says.

“The $300 jars with all the condiments have always been off limits to all but the very wealthy. Now it’s everywhere in bite-size and affordable dollops.” A few days later, he discovered that Qantas was serving caviar on a flight to New York. There were even bars serving it on potato chips. “Caviar,” Mr Williams says, “is the new black”.

But as tastes change and restaurants like Smith Street Bistrot and Mimi’s in Sydney – which has turned caviar into a pie with scallop mousseline – transform the dish, there is a problem.

While Australia positioned itself well to capitalise on the kingfish boom, albeit partially by accident when some attempts to farm bluefin tuna failed, every ounce of caviar is imported.

What’s more, beluga sturgeon, which produces the most valuable roe and is primarily found in the Caspian Sea, is endangered from decades of overfishing, habitat loss and the illegal trade of caviar.

But in Adelaide, a public servant has found a solution.

Mehdi Doroudi, chief executive of South Australia’s Department of Primary Industries, has been working with the commonwealth for the past decade to allow the importation of sturgeon and a final decision is expected soon.

The federal government is in the final stages of completing biosecurity risk assessments and consultation. Once approved, Professor Doroudi could issue licences under strict conditions, that would create Australia’s first homegrown caviar industry.

“It was a huge effort,” says Professor Doroudi, who worked in the Caspian Sea region and caviar industry in Iran before he emigrated to Australia 27 years ago.

“There are other countries where the sturgeon is not endemic but they import them and grow them in a biosecurity way. And I thought, why not here?”

While Tasmania gets most of the attention in relation to Australian aquaculture, SA has become the nation’s commercial fishery capital, fattening tuna in pens and farming kingfish, barramundi, rainbow trout, oysters and now potentially beluga sturgeon.

The caviar market presents a major opportunity. It is worth about $US276m ($409m) and that is expected to soar to $US1.88bn in the next five years with an annual growth rate of 9 per cent, according to Market Data Forecast.

But competition is increasing. More than half of the world’s commercial caviar farms are in China, where companies including Kaluga Queen sold their first tin 2006.

The cost of production is also high. Sturgeon farms cost millions of dollars to establish, given the fish needs cool, deeper water.

Professor Doroudi says that unlike carp, sturgeon would not survive in the Murray River or even Australia’s coastal waters.

Crucially, it takes more than a decade for a fish to reach maturity and harvest the first batches.

Mr Williams says: “The single biggest issue I see is that sturgeon is like almonds and walnuts, they can take up to 12 years to mature.

“I am not sure capital markets are that patient. However, they have done it in tree nuts, so maybe here also. The Germans and others have learned how to do it, so why not us,” Mr Williams says.

Australia’s reputation as a clean and green food producer also gives it an advantage, with interest in the nation’s aquaculture assets increasing, following the Tassal’s $1.7bn takeover from Canadian seafood giant Cooke, and Brazilian conglomerate JBS’s $425m acquisition of Huon.

Australian aquaculture is also expanding into new species, farming prawns in recent years and even the nation’s biggest fish, Murray cod, offering a more efficient way to help meet surging global demand for protein as well as higher culinary standards.

“There is lots to like about an Australian-grown caviar for the export market,” says Mr Williams, who bought Tassal for $42.5m after it fell into administration 20 years ago before floating it on the ASX, and then advised Cooke on its acquisition of the company.

“Sturgeon is under threat in certain parts of the northern hemisphere so new ideas to farm it are worth a look.”

Several big names, with equally big pockets, are understood to be interested in applying for licences to import and farm sturgeon in Australia, although Professor Doroudi declined to name those who have approached his office.

“It needs to stack up for investors,” he says, adding that one type of caviar – Almas from the Caspian Sea – sells for $12,000 to $14,000 a kilogram.

“It’s crazy when you think about it, but you need to be patient for 10 to 12 years before you can get caviar from the fish.” But Professor Doroudi says that doesn’t mean that investors cannot generate a return in the meantime.

He says an ideal model is to farm sturgeon, which can grow up to 7m long, for its meat which he says is unlike other fish.

“It’s not similar to anything that we are familiar with here. It’s not salmon, it’s not a snapper, it’s not a King George whiting but it’s nice eating, it’s good eating,” he says. “For many years, many countries have grown, in aquaculture, a sturgeon for the meat. If you look at China, they are producing thousands of tonnes of Siberian sturgeon (meat).”

This compares with global caviar production of about 380 tonnes, according to the European Union’s latest estimates.

“But even if you produce 100kg of that, if you could sell it for around $10,000 (a kilogram), it would be a significant amount in terms of return,” Professor Doroudi says. “I’ll leave that to the business people to run it the way they want to. But if they come to me for my aquaculture expertise and ask how we should do it … I’d say put part of your production into meat production and get cashflow, and maintain the good ones and quality ones through genetic selection.”

Investors could also gain a greater return from adopting roe harvesting practices that do not involve killing the fish. “That way the fish can continue to reproduce,” Professor Doroudi says.

“A lot could be done. It’s really an amazing area to be involved and needs a lot of passion from people who are coming in.

“If someone is after a quick cash return and says ‘I’ll put my money here, I want to see something tomorrow’, it would be wrong to step into this area.”

The idea of using surgical roe extraction techniques rather than killing a fish appeals to Mr Williams but he has a different view to Professor Doroudi about growing sturgeon for meat.

“I look at it as fish farmed for caviar only and harvested annually without having to sacrifice the fish. You can eat the fish, but the main prize is caviar,” he says, adding it was worth the wait.

“The difference between caviar, almonds and walnuts is that one is an aphrodisiac … clue: try the caviar pie at Mimi’s or the Caviar oysters at 300 Smith Street Bistrot,” Mr Williams says.

https://www.theaustralian.com.au/business/regulators-considering-sturgeon-importation-in-order-to-start-a-premium-caviar-industry/news-story/554c601764c76e1fe941e7f3cef27c78

Mobile Tyre Shop, founded by Challenger’s former head of leasing, is parading its wares to potential investors for a $20 million pre-IPO round that is expected to be shopped as far as Tokyo Stock Exchange-listed tyre manufacturing giants.

Its pitch to investors, seen by Street Talk, was that revenue had grown 36.2 per cent year-on-year while costs were coming down. Now, it needs money to expand its fleet and ramp up marketing.

Mobile Tyre Shop has 42 vans that drive to customers in 3300 suburbs to change or balance tyres. It’s operating in capital cities and has its foot in the door in regional areas and secondary tier cities via relationships with car rental companies like Hertz.

Its third channel of sales is working with other online tyre retailers (Bridgestone, Tyroola, Tyresales) as their onsite fitting partner.

All of that boiled down to $11.9 million trading revenue for the 2022 financial year, and the company expects to triple it to $35.7 million in two years.

It’s still posting losses on an EBITDA basis – $4 million-plus for 2022 – but reckoned the business was more efficient and reducing costs, notwithstanding the loss of corporate business during COVID-19.

Investors were told Mobile Tyre Shop’s capital cities footprint was bringing new potential customers in the door, while online marketing meant ecommerce sales had grown and made up 58 per cent of the total sales in the June half. The raise would allow it to expand its fleet size to 52 this financial year.

The pitch deck also dangled the opportunity for the business to branch out from tyres and deeper into the automotive afterparts market – think, car batteries and windscreens – which was a $5 billion market.

The business was founded by Travis Osborne, who has Challenger Financial Services’ head of leasing. He had also worked at The Gandel Group, Spotlight Property Group and Westfield.

Melbourne corporate adviser David Williams is Mobile Tyre Shop’s chair and largest shareholder. His firm Kidder Williams is running the raising, which was expected to target about a $50 million pre-money valuation.

It would be interesting to see who ends up on its shareholder register.

There’s no doubt Mobile Tyre Shop’s growing, but any potential investor would want to know how far it is from posting profits.

Nevertheless, it’s the kind of business that could be tried on for strategic fit by automotive clubs like NRMA and RACV, or local automotive afterparts giant Bapcor. It also wouldn’t be surprising to see it shopped to overseas auto parts manufacturers like the NASDAQ-listed Goodyear Tire & Rubber Co, Tokyo-listed Bridgestone and Toyo Tires, Frankfurt-listed Continental, Seoul-listed Hankook Tire, Milan-listed Pirelli or Shangahai-listed Shandong Linglong.

Germany’s Continental, in particular, knows the lay of the land, having paid $350 million to buy Wesfarmers’ Kmart Tyre and Auto Services in 2018.

Mobile Tyre Shop is kicking off the raising talks just as Tyre retailer Tyremax courts M&A interest from the likes of Bain Capital. Tyremax is a much bigger business with expected $50 million EBITDA and has been tipped to fetch around the $500 million mark when sell-side adviser Miles Advisory reboots the auction next year.

https://www.afr.com/street-talk/mobile-tyre-shop-revs-up-for-pre-ipo-round-20221208-p5c4p3

Kidder Williams has pumped the accelerator on a sale process for private smash repair group Western General Bodyworks (WGBW), kicking off talks with private equity funds and other potential buyers.

The accident repairer, based in Victoria, has 11 workshops, more than 170 staff and services north of 10,000 cars a year, according to a flyer shown to potential investors.

WGBW was established in 1981 with one workshop in Maribyrnong and now has locations across Melbourne, Geelong (where it is the biggest collision repairer), Newcastle and Gold Coast, repairing cars for insurers including IAG Group, Allianz, Suncorp and Youi.

The group’s owned by businessman Danny Buzadzic, who has 30 years in the vehicle repair industry, and a bunch of acquisitions in the pipeline to try to grow the business and its footprint.

It also recently launched businesses including M Tech Suspension and Motor Glass Windscreen, which provide aftermarket repairs and were said to be on track for positive earnings in FY23. [The businesses were started in the past two financial years].

With all the expansion plans, Buzadzic has hired Kidder Williams to go shopping for a new owner that could help fund it all.

The five-page pitched, sent to potential acquirers this week and seen by Street Talk, looks like a direct call to cashed up PE funds looking for places to deploy their dry powder.

PE funds have sniffed around Australia’s smash repairs sector in the past – Blackstone even had a deal to acquire AMA Group’s panel repairs arm which fell over – with thoughts about consolidating what’s still a fragmented market.

WGBW’s small compared to AMA’s business, and looks like one for the growth funds. It turned over jobs worth $33.9 million last financial year at a double-digit EBITDA margin, the flyer said.

Revenue is heavily skewed towards workshop repairs (91 per cent), and about 60 per cent of its work is insurance jobs.

The flyer said WGBW’s owners were considering their strategic options including a full sale of the business. They hired Kidder Williams to run Project Optimus and test buyer appetite.

The advisers have started drumming up interest, keen to point out that WGBW got through the pandemic better than plenty of its rivals, winning industry awards as the best multi-site operator.

It comes as the biggest buyer (and player) in the sector, AMA Group, implements new pricing deals with insurers and engages in “network optimisation” to try to turn around its fortunes, after expanding rapidly in the past decade. Its biggest move was acquiring Suncorp’s Capital Smart repair business for $420 million in 2019.

https://www.afr.com/street-talk/smash-repairer-western-general-hunts-pe-investor-to-take-the-wheel-20221201-p5c2qy

Tasmania’s Tassal, the last ASX-listed salmon producer, is looking to expand into new species – including barramundi and kingfish – as it enters new ownership under Canadian seafood giant Cooke Aquaculture.

Cooke settled its $1.7bn takeover of Tassal on Monday – and the company will be pulled off the exchange – with chief executive Glenn Cooke in Australia to meet staff and outline his new operation’s next phase of growth.

This includes exporting Tassal’s products to new markets, including Europe where Cooke has recently acquired a prawn distributor.

“Tasmania sells and I think there is positioning for some of that. I also hope to bring some of our other products through Tassal into the Australian market – shrimp, crab, those types of products,” Mr Cooke said.

The close of the sale marks a transition of Tasmania’s $1bn salmon industry into complete foreign ownership and comes as supermarket chains are looking for more fresh fish meat, particularly white-flesh species, to offer year-round seafood.

Mr Cooke said he would work with Tassal and its chief executive Mark Ryan – who has led the company since 2003 – to expand Tassal’s product offering.

Cooke has turnover of $2.7bn, with, salmon farms in Canada, US, Chile and Scotland, and 10,000 employees. It is understood to be looking to increase its geographic diversification further to help reduce the risks such as adverse weather and disease.

Mr Ryan said Tassal was exploring expanding into barramundi – four years after it branched out into prawns after it acquired Fortune Group for $31.9m. “(Tassal) doesn’t necessarily have to be salmon and prawns. There’s potential opportunities in barramundi or kingfish,” Mr Ryan said.

“We’re a global operation now. So I think for us, it’s not just saying ‘it has to be here or there’. It really is about which is the best spot to actually do that and give you the best payback and from a risk point, what was going to be the place that minimises the risk.”

Tasmania has also banned further leases of its waterways for salmon farming, pushing producers out into the ocean, about 20km offshore, in rougher, federal waters – or looking to waterways in other states or breeding different species.

Tassal 40-year-old fish breeding program has delivered a food conversion ratio close to 1:1. In other words, it takes about 1kg of feed to produce 1kg of fish, about eight times less than what’s required to produce the same amount of beef.

Mr Ryan said he was confident it could do the same for other species.

“Prawns or shrimp, globally they work at sort of 2.2-3kg. Already, we’ve taken that down to 1.5kg within three years,” the Tassal chief executive said.

“I’ve talked about barramundi, which is so similar to salmon it’s not funny in terms of infrastructure and practices, and there’s no reason we couldn’t employ that into growing barramundi.

“We’ve got a really good base where we use the technology and particularly the AI where it‘s not just about overfeeding, it’s about underfeeding fish as well. If we can optimise that, that just puts us in a really good spot.”

The company has branched out into seaweed and it hopes to grow the asparagopsis variety, which is used to feed livestock to lower their methane emissions.

Cooke’s acquisition of the company attracted criticism from activist organisations, including the Bob Brown Foundation, which expressed concern that the shift to offshore ownership reduced reporting requirements, while claiming multinationals could buy influence and bully regulators.

Mr Cooke dismissed that criticism as “fake news” and a “bald-faced lie” from “well organised groups”. He said science was on Cooke’s side and Tassal had a credible management team.

“We feed a lot of people very healthy protein and we’re going to continue growing our business to more healthy programs. As far as these environmentalists, or so-called environmentalists, you know, we better continue to fight that message with the truth,” Mr Cooke said.

“To basically throw non-truths and fake stories around, bald faced lies, that’s not nice and just discredits them. It just shows what kind of people are out there trying to protest when they have to lie.

“You‘ve got to remember these well organised groups, they have the next platform to get people to scream and yell because they need to raise money to pay for their salaries. So it’s a very circular thing.”

David Williams, the investment banker who advised Cooke on the deal through his Kidder Williams advisory firm, told The Australian: “Farming animals and fish has been subject to continuous improvement, in animal husbandry and feed and growing methods.”

Mr Williams was also a previous owner of Tassal, acquiring it for $42.5m after it had fallen into administration in 2003 before floating it on the ASX a year later.

“Modern fish farming is a relatively new business and there are many learnings every year to improve practices. Continuous improvement is important because aquaculture will continue to be a low-cost way of feeding the world,” Mr Williams said.

“Cookes are one of the best operators in the world and will accelerate industry improvement here with their technologies and experience.”

https://www.theaustralian.com.au/business/companies/barramundi-and-kingfish-on-the-menu-for-tassal-as-it-looks-to-branch-out-under-cooke/news-story/31030bbcc5ce892f7c6f5de1c5015e2d

Tassal shareholders have overwhelmingly backed a $1.7bn takeover of the salmon producer from Canadian seafood giant Cooke.

It marks the end of a 20-year turnaround at the Tasmanian group, which entered administration in 2002 and was floated on the ASX a year later at 50c a share.

The company will now be removed from the ASX boards later this month after 96 per cent of shareholders voted in favour of Cooke’s fourth and final bid of $5.23 a share on Thursday.

It has been a test of patience for Cooke – which first approached Tassal in 2010 and made its first offer for the company in 2011. When it contacted the board this year, it was armed with a secret weapon: David Williams.

Mr Williams, who runs boutique investment bank Kidder Williams, can say he effectively bought Tassal twice. Once for $42.5m after the group fell into administration and again for $1.7bn after he advised Cooke on the deal.

Tassal chair, former Incitec Pivot chief executive James Fazzino, said it was a “significant day in the history of Tassal”, with Cooke’s bid representing a 49 per cent premium and the “best interests” of shareholders.

His comments came after managing director Mark Ryan – who was appointed as receiver in 2002 and stayed with the company after its listing the following the year – said in August there was no greater external validation than an appropriately-priced takeover bid.

“If you look at a 49 per cent premium, I think it’s a good premium from when it started, and if I look at where we listed at 50c it feels pretty good to get it up to $5.23,” Mr Ryan said.

A court hearing has been scheduled for Tuesday to approve the scheme. If it gets the green light, the takeover will become effective on November 21, with shareholders paid $1.1bn or $5.23 cash a share. The deal also includes about $600m of Tassal’s debt.

It comes after Cooke unsuccessfully made a play for Tassal rival Huon, which was ultimately sold to Brazilian firm JBS for $424m last year.

Cooke has turnover of some $2.7bn, salmon farms in Canada, US, Chile and Scotland, and has 10,000 employees. It is understood to be wanting to increase its geographic diversification further to help reduce the risks such as adverse weather and disease.

Cooke chief executive Glenn Cooke made a direct pitch to Tassal’s 10 biggest shareholders in late June via a phone call described as a “meet and greet”. Mr Cooke told the Tassal shareholders on the call that the company faces limited growth prospects, and under Cooke’s ownership it could take it to the new markets and the next level.

He also gave a summary of Cooke’s history and operations, which includes salmon farms in Canada, the US, Chile and Scotland.

Tassal’s revenue surged 32.8 per cent to $788.7m, while net profit rose 31.9 per cent to $63.7m in the year to June 30.

The takeover comes as salmon prices have eased from a record high. The Nasdaq Salmon Index, which tracks the prices of the fish from Norway, the world’s leading producer, has fallen 5.13 per cent in the past quarter.

But in the past month, prices have crept up again, rising 10.1 per cent. In July, Rabobank said “recessionary dynamics resulting from a decline in disposable incomes” had sparked a shift toward retail from food service.

“For most supplier regions, and especially Norway, supply in (the first half of) 2022 was weak, resulting in a global contraction of 6 per cent, the highest negative supply growth since 2016,” Rabobank wrote in its latest update.

“Salmon supply will improve in 2H, compensating for the supply contraction in 1H. This year’s growth is still the lowest since 2016.”

https://www.theaustralian.com.au/business/companies/david-williams-reels-in-cookes-17bn-takeover-of-tassal/news-story/1023a1a7ceca8ea77a015e1b3f3f0338

Canada’s Cooke has signed a $1.1 billion deal to acquire Australian salmon farmer Tassal.

Unperturbed by things like six weeks diligence regimes, bickering over standstills, funding packages, investment committees or the like, the privately owned Cooke brought to a head years of talks with Tassal by making what they thought was their best offer, a $5.23 a share bid.

The unconditional offer, to be paid in cash, came after Cooke acquired a 10.5 per cent stake in Tassal in the past two months, and made approaches at $4.67 and $4.85 a share.

While Tassal rejected the $4.67 and $4.85 a share approaches, Cooke returned for its swansong, which it was confident would be high enough for Tassal’s big shareholders.

Sources involved said there was no need for a heavy diligence regime – Cooke knows the industry as well as anyone, ran diligence on fellow Tasmanian salmon group Huon Aquaculture last year and has had its eyes on Tassal for years.

It was also not reliant on a highly leveraged bid vehicle, a big bank syndicate or pesky LPs to make its purchase, and even had former Tassal owner David Williams of Melbourne firm Kidder Williams in its camp as financial adviser.

Cooke will pay $5.23 a share which was a 49 per cent premium to the undisturbed price, and higher than its earlier bids at $4.67 and $4.85 a share. Tassal last traded at $4.89 a share.

The deal valued Tassal’s equity at $1.1 billion and the company at $1.7 billion, including debt.

It was to be done via a scheme of arrangement.

Cooke already owns a 10.5 per cent stake in Tassal, acquired on-market in trades via a handful of brokers including Macquarie and Canaccord Genuity and under various entities. 

Tassal’s the second Australian salmon business to be taken off the ASX-boards in the past two years. Last year it was Huon Aquaculture, the No.2 player to Tassal, which went to Brazilian meat giant JBS after an auction that also involved Cooke.

Goldman Sachs and Herbert Smith Freehills advised Tassal, while Kidder Williams and Allens are in Cooke’s corner.

Tassal announced the deal on Tuesday morning, to coincide with its 2022 financial year results.

https://www.afr.com/street-talk/cooke-gets-tassal-for-1-1-billion-no-need-for-protracted-dd-20220815-p5ba32

Australia is “behind the eight ball” in trying to prevent an outbreak of foot and mouth disease, following the “decimation” of government-funded animal health programs in the past 20 years.

That’s the assessment of Michael Perich, one of the country’s biggest dairy farmers, agribusiness banker David Williams, and former Victorian premier and livestock vet Denis Napthine.

The trio fear Indonesia’s outbreak of foot and mouth disease will quickly spread to Australia as thousands of tourists return from holidays in Bali.

Mr Perich – who farms 30,000 head of cattle at Leppington Pastoral in western Sydney and is chief executive of ASX-listed food and supplement company Noumi – is particularly concerned about the ability of schools with cows, pigs, alpacas and other cloven-hoof animals to detect and contain an outbreak.

Mr Perich – who says he has not seen a government-funded livestock vet on his farm in years – said unlike the varroa mite outbreak that had been contained around Newcastle, it would only take one animal infected with foot and mouth disease to shut down Australia’s multibillion-dollar meat and dairy exports.

“There are a lot of countries that are either foot and mouth disease-free or are in what’s known as a controlled state … and they only buy from foot and mouth disease-free countries,” Mr Perich said. “A lot of them would shut their trading doors (to Australia).”

Shares in Australia’s biggest cattle producer – ASX-listed AACo, which owns about 1 per cent of Australia’s land mass – have fallen more than 18 per cent in the past month to $1.84 a share.

While the company regained some ground on Monday, rising 2.2 per cent, investors are concerned about what an outbreak would do to red meat supply and prices.

Meanwhile, shares in Elders – which hiked its interim dividend this year by 40 per cent to 28c a share, thanks in part to strong livestock pricing – has fallen about 5 per cent in the past week.

Mr Perich has written to the NSW Education Department to request a ban on student contact with school-based agriculture programs that have farm animals onsite. “We work with schools allowing visits to our farms, plus we donate calves for programs focused around raising dairy calves,” he wrote. “At our farms we implemented last week a 7-day isolation program for any employee or visitor to our farm that has travelled internationally.

“With schools returning back today (Monday), a number of schools have susceptible animals – cattle, buffalo, camels, sheep, goats, deer and pigs – we wanted to ensure that schools are aware of the risk to the $80bn agriculture industry and extreme caution should be taken with any international traveller.”

Dr Napthine – who before entering politics was a government veterinarian who worked on disease eradication programs – said such state-funded animal health programs “virtually don’t exist anymore”.

“The animal health side of the Department of Agriculture has been decimated in the past 20 years. There just isn’t that network of people on the ground,” Dr Napthine said.

“We have got to be absolutely vigilant about preventing it (foot and mouth disease) getting into the country, and the second thing is we’ve got to be absolutely ready to respond immediately if it does get in. On both cases, we’re both behind the eight ball.”

Dr Napthine said the rise of hobby farmers also put the country at risk of a potential outbreak.

Mr Williams, who advises a host of Australia’s biggest agribusinesses, said more government veterinarians were needed.

“And if they are not available then manufacture a solution using vets from private practice, eg from Apiam, one of Australia’s biggest veterinary practices, which is listed on the ASX,” he said.

But he said companies also needed to take responsibility.

“Good corporate governance requires food and ag companies to rate the risks to their businesses. Biosecurity should be one, two and three on that list but rarely are.”

Agriculture Minister Murray Watt announced a $14m fund to ward off the disease, which has reached Indonesia and East Timor.

https://www.theaustralian.com.au/business/agribusiness/lack-of-vets-leaves-australia-behind-the-8-ball-to-combat-foot-and-mouth-disease/news-story/9ca6eabe1a81c55e2df7991c328eb778

David Williams visiting Dr Melanie Oey and Professor Ben Hankamer at the Institute of Molecular Biology at the University of Queensland.

Their very exciting project is developing algae dressings to bring more oxygen to a wound to speed up healing.

They are taking advice from surgeons at Royal Brisbane Hospital who are using Polynovo’s BTM.

Canadian aquaculture giant Cooke has swallowed a 5.4 per cent slice of ASX-listed salmon producer Tassal, and is ready to gobble up more chunks of the Tasmanian-based company.

Cooke was revealed as the mystery buyer of a parcel of Tassal shares on Monday after a 10-day spending spree, buying at prices ranging from $3.42 to $3.85 a share and ending speculation that investment banker David Williams was returning for another bite at the company.

Mr Williams bought Tassal from receivership in 2003 before floating the company.

He has brokered some of the biggest Australian agribusiness deals, including turning around the fortunes of almond producer Select Harvests and returning Vegemite to Australian ownership after convincing Bega Cheese to buy the spread from confectionary titan Mondelez.

While Mr Williams was buying Tassal shares last week under Amore Foods – a private company he launched in 2004 – a substantial shareholder notice lodged on the ASX reveals he was purchasing on behalf of Cooke.

Cooke cast a line on Tassal in 2010 before walking home with an empty catch. It later tossed a lure at rival Huon, with Mr Williams advising them on the bid.

But it was unsuccessful, with Brazilian meat processor JBS acquiring Huon for $425m despite resistance from Andrew Forrest.

Cooke has turnover of some $2.7bn, salmon farms in Canada, US, Chile and Scotland, and has 10,000 employees. It is understood to be wanting to increase its geographic diversification further to help reduce the risks such as adverse weather and disease.

Tassal shares surged 3.1 per cent to $3.97 – a two-year high.

It is understood that Cooke is still active in the market, given Monday’s share jump.

JBS Australia managing director Brent Eastwood said at The Australian’s Global Food Forum this month that salmon farming was a “misunderstood business” and was an efficient way to help meet surging demand for protein.

“At the end of the day the planet we live on, the surface is 70 per cent water. But the protein we consume today is only 7 per cent fish,” Mr Eastwood said. “In many parts of the world there is overfishing of the available natural wild species of fish. But (salmon farming) is a very sustainable business. It’s very energy efficient and doesn’t use much land.”

Tassal chief executive Mark Ryan said at the company’s latest financial results in February that it was now “experiencing the benefits of scale” after completing its investment in salmon biomass growth.

“Together with the investments in and growth of our prawn business, where we achieve more attractive capital and working capital cycles, Tassal is focused on growing cashflow and optimising returns. We have delivered a stepchange in cash generation and believe Tassal is well positioned to deliver further improvements in cash flow and cash conversion going forward,” Mr Ryan said.

“We are now at scale delivering a sustainable annual salmon harvest of around 40,000 hog tonnes, and optimising sales mix through branded product development in retail leveraging Tassal’s No.1 salmon and protein brand position, strategically balancing contract unbranded sales, and capitalising on the strong recovery in global pricing and the commencement of pricing recovery in the domestic market.”

Cooke is being advised by investment banker David Williams, who bought Tassal from receivership in 2003 before floating it on the ASX.

Mr Williams has brokered some of the biggest Australian agribusiness deals, including turning around the fortunes of almond producer Select Harvests and returning Vegemite to Australian ownership after convincing Bega Cheese to buy the spread from confectionary titan Mondelez.

He has been buying Tassal shares in the past two weeks under Amore Foods – a private company he launched in 2004 – on behalf of Cooke at prices ranging from $3.42 to $3.85 a share.

Its shares surged 3.1 per cent to $3.97 – a two-year high – after Cooke’s stake in the company was revealed on Monday. Tassal is being advised by Goldman Sachs as its financial advisor and Herbert Smith Freehills as its legal advisor.

https://www.theaustralian.com.au/business/companies/david-williams-lands-canadian-aquaculture-a-prize-catch-in-tassal-raid/news-story/98f4d0d930320fd360569c963269322b