Elders announces new chairman

Malcolm Jackman. Photo / Bloomberg.

Recovery in Australian agricultural sector will take some time, says Ballard

MELBOURNE: The chairman-designate of agribusiness Elders, John Ballard, says it could take quite some time for the Australian agricultural sector to return to buoyant levels.

Elders announced yesterday that Ballard would take over from Stephen Gerlach, who announced his retirement in December as part of an ongoing board renewal process at Elders.

Ballard, who was chief executive of winemaker Southcorp until it was taken over by Foster's Group in 2005, will assume the chair after a handover period.

He comes to Elders after the company in June flagged an underlying loss of between A$8 million and A$14 million for the financial year ending September 30, 2010 compared with an original target of a A$55.7 million underlying profit.

The profit downgrade saw Elders shares plunge more than 45 per cent in a single day.

Ballard said yesterday that the Australian agriculture sector had just come out of a major drought, and it would take at least a full season of normal rainfall or more before the water table lifted.

"There's quite a delay factor in seeing a flow-through to purchases of products such as the products and services that Elders provides," he said.

Ballard said recovery starts very tentatively with the first rain.

Herds that had been reduced would also have to be rebuilt and numbers were "way, way down".

The drought had also put financial pressure on farmers, which had been exacerbated by the credit squeeze arising from the global financial crisis.

Ballard said the time taken to recover from the drought would vary according to area.

"In cropping, where they've had sufficient rain to get a good crop away, it will be quite quick.

"But in beef, there's quite a delay, so I wouldn't expect to see a dramatic turnaround any time soon.

"In terms of having a really buoyant sector across the board, it will clearly take some time."

Ballard was confident Australian agriculture would become an increasingly important part of the domestic economy given population growth and greater demand for food in Asia.

It was unsurprising that Asian interests were increasing their investment in Australian agricultural companies.

"There's also quite a lot of money available in Asia. You have to expect that they would want to secure their lines of supply," Ballard said.

He said Elders was currently in the process of recovery and major change.

"Again, these things don't happen instantly."

Ballard was "very comfortable" with Elders' recovery strategy and the people implementing it.

"The direction is right, but one should be questioning as to how it may be improved as it is executed," he said.

Elders chief executive Malcolm Jackman said he and Ballard had great passion for Elders and the Australian agricultural sector.

"I think the two of us are going to work famously as we go forward," Jackman said.

Asked if he were feeling under pressure given Elders' financial performance and the fall in the company's share price, Jackman said: "Absolutely. Yes, I feel I'm under an immense amount of pressure, but that's what I get paid for, and I will take us back to where we need to go".

Jackman said he expected to remain chief executive. "I do not want to sound egotistical, but I do not think there is a better person equipped to lead the company into the future."

Ballard is currently a non-executive director of dairy group Fonterra.

He has also served on the board of building products and aluminium group CSR and held executive roles with United Biscuits and Coca-Cola Amatil.

- AAP