ABB acquires NZ stock feed maker

ABB acquires NZ's most experienced stock feed maker

Leading Australian agribusiness, ABB Grain Ltd, has announced plans to
buy New Zealand's largest and most-established brand in compound feed,
NRM.

ABB Grain's board has approved the acquisition from Tegel Foods Ltd with
settlement on 20 March 2009. It will make ABB NZ the market leader in
animal feed sales in that country.

Managing director, Michael Iwaniw, said board approval of NRM's purchase
for A$31.7m increased ABB's investment in New Zealand to almost A$80
million

"The acquisition of NRM enables ABB to draw upon the vast experience of
New Zealand's iconic stock feed manufacturer, while continuing our
strategy of becoming an integrated supplier to the compound feed
market," Mr Iwaniw said.

NRM employs 72 staff and caters for the feed requirements of dairy,
poultry, pigs, horses and working dogs. ABB's acquisition includes two
mills and a textured feed plant in Auckland. The feed mill acquisitions
give ABB milling capacity in both north and south islands.

Mr Iwaniw said the purchase of NRM reinforced ABB's strategy of
diversifying operations to regions with more reliable climatic
conditions: 'We believe we can add real value to the New Zealand feed
market, particularly the dairy sector through intensive feeding, thereby
improving milk yields."

He said NRM imported over 100,000 tonnes of grain a year for processing
in its mills. ABB-sourced Australian wheat, barley and sorghum would
supplement NZ grain acquisitions. With this additional tonnage and
existing relationships, ABB would be managing the supply chain for over
750,000t of grain and other bulk commodity imports.

"Changing land usage means New Zealand will become increasingly reliant
on imports to support domestic dairy, pig and chicken compound and
intensive feed markets," Mr Iwaniw said.

"ABB's ability to reduce supply chain costs through the efficient use of
an integrated value chain will provide real benefits to New Zealand's
end users, while also providing Australian producers with a further
dedicated market for their grain."

NRM can trace its beginnings back to an Auckland feed mill in 1875. In
1899 it adopted the name the Northern Roller Milling Company - now NRM.

ABB's investment in New Zealand in the past year has included the
completion of purpose-built extensive storage facilities in New Plymouth
and Mount Maunganui (Tauranga) while ABB is also about to start work on
a new feed mill in South Auckland, which will initially have an annual
production capacity of 180,000t.

Last year, ABB acquired the ruminant business of PCL Feeds in July and
high-profile maize player, NZ Grain and Seed Ltd (TAG) last April.

ENDS

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