Australian Sugar Milling Foreign Ownership Isn't Against National Interest-Official

The move to majority foreign ownership of the Australian sugar milling industry isn't contrary to the national interest, a senior official of the Department of Agriculture said Friday, just as Thailand's Mitr Phol Sugar Corp. nears completion of its takeover of MSF Sugar Ltd.

"The anecdotes from the industry suggest this has been positive so in that case it isn't something we would look at and say there's a fundamental problem here and we need to go and investigate," Allen Grant, a First Assistant Secretary in the Department of Agriculture, told a Senate panel.

"Our judgement to date is that it hasn't been against the national interest because it has continued employment, it has continued investment, it has continued economic activity and that's supported broader rural communities in those regions," he said.

Thailand processing giant Mitr Phol is close to sealing its A$313 million (US$337 million) takeover of MSF Sugar. Earlier Friday, MSF said 88.72% of its equity is held by Mitr Phol, which plans to compulsorily acquire all of MSF shares when it reaches a 90% threshold for such a move. This would effectively delist Australia's only listed pure sugar company.

Australia's Foreign Investment Review Board raised no objections to Mitr Phol's takeover of MSF.

Australia's No. 3 milling group by output, MSF owns four mills and land in Queensland and its takeover follows a string of acquisitions of local sugar-industry assets by foreign corporations.

In December, Wilmar International Ltd.'s (F34.SG) Sucrogen unit bought Proserpine Cooperative Sugar Milling Association Ltd. for A$120 million, building on its purchase a year earlier of Sucrogen from CSR Ltd. (>> CSR Limited) for A$1.75 billion. Sucrogen operates eight mills and is the largest miller in Australia by output and dominates ownership of sugar refining assets. In July, Chinese government-owned Cofco bought unlisted Tully Sugar Ltd. for A$136 million.

Belgium-based Finasucre also owns two mills and a refinery.

Steve Greenwood, chief executive of farmer lobby Canegrowers, said previously there has been some concern among growers about the future given that there is a "lot of turmoil" in the industry.

source: 4-traders