SunRice and Wilmar go `toe to toe' in battle for the Pacific

Australia may not have much rice to export after three drought-boosting seasons, but national brand SunRice is digging deep to protect the long-standing trade in the Pacific from a cheap attack by the business giant. Asian agriculture Wilmar.

While SunRice's overall export business achieved a 10% increase in sales last fiscal year, despite Australia's shortage, Australia's strengthened sales effort by Wilmar International is based in Singapore. putting more pressure on the market in 2019-20.

The struggling economy of Papua New Guinea and the devaluation of kina have been a particular concern for a few years, undermining consumer demand for the high-quality 50-year-old Trukai brand, the majority. owned by the King of Clamp and Australian marketing.

Its 13 Pacific markets represent 60% of SunRice's international business revenue - far ahead of the next largest offshore revenue, the Middle East at 19%.

They are trying to buy market share by selling products at very low prices
- Rob Gordon, SunRice

However, Wilmar, the company that acquired the entire ownership of Australian food business Goodman Fielder last year, has actively stepped up its efforts to capture the regional market, making the most of its trusted footprint. by Goodman Fielder to set foot in the Pacific.

"They are trying to buy market share by selling products at very low prices," SunRice chief executive Rob Gordon said.

"We will fight if they want to continue.

"We have kept our position and are holding back their attack, but assume they have a position in an area they cannot ignore."

Wilmar is one of Singapore's largest listed businesses and one of the largest integrated agribusinesses in the world with benefits including oil palm production, oilseed processing, sugar mill milling, biodiesel. Study, fertilizer and rice processing.

The sales of rice in the Pacific are mainly sourced from Vietnam, although it is not a quality rice or Japonica that the market usually enjoys from Australia, or from alternative sources of SunRice when Australian rice is in short supply. .

Gordon said SunRice has the benefit of better quality products, shorter supply chains and well-established regional supply networks.

Closer, better quality
In fact, the PNG business employs about half of 2000 employees working for SunRice and all its subsidiaries in Australia and abroad.

"At some point, Wilmar also has to earn some money from its markets in PNG or elsewhere, so it can't keep discounting products forever," he said.

"We're taking them away. We will go toe-to-toe with them."

Part of SunRice's defense strategy is the launch of a Pacific "fighter" in 2020 using rice from Vietnam where the company has its own factory and farmer contract, or China, where they have consolidated supply deals with a state-owned enterprise in recent years.

Increasing its offshore supply becomes even more important as 2019 brings an Australian 54,000 ton rice crop, followed by a smaller 45,000 ton crop this year.

Traditionally, Trukai, SolRice and SunRice rice are mostly exported from Australia, but the large exchange rate difference between the dollar and local currency, especially kina, has created potential winds. pay for the brand.

Further challenges include rising global rice prices, especially after the coronavirus outbreak, disruption and slowdown in transportation operations due to labor restrictions related to COVID-19.

SunRice brands in some of the company's 100 export markets, including SolRice for major trade in the Pacific.

Sales to food service customers such as cruise ships and the wider travel sector are also heavily impacted, notably in Hawaii.

Despite having sold more than 1 million tons of rice worldwide in 2019-20, the added costs, market disruptions, frequent rebranding and the lack of Australian crops for service export demand have been SunRice's international division was taxed at a loss of $ 1.4 million, compared with a profit of $ 2 million in 2018-19.

Pacific achieved export results
"Challenging Pacific market conditions weighed significantly against the improved annual performance of the rest of our international operations," Gordon said.

On the positive side, however, the challenge of finding more rice to fill the markets often served from Australia, has revealed new temperate climates for a variety of different types of rice in South America.

Having a significant source of water helps us believe in South America's potential for us
- Rob Gordon

"We have done a lot of research and are using the next opportunity in this market," Gordon said.

Initially, SunRice originated from koshihikari seeds from Uruguay, but expanded its purchasing activities to Argentina, Paraguay and Brazil.

"Having a significant source of water helps us believe in South America's potential for us."

Source: https://www.farmonline.com.au/story/6818481/sunrice-braces-for-discount-battle-with-wilmar-in-pacific/