Canadas PSP merges Daybreak and BFB farming ventures

PSP Investments' combined Australian grain growing businesses will be led by its management team at BFB.

Temora-based BFB will be will be the hub of united enterprises PSP Investments with Daybreak Cropping.

Prominent agricultural farmland management group, Warakirri, is cutting its broadacre cropping ties with Canada's Public Sector Pension Investment Board as two of PSP's farming businesses merge.

PSP Investments' majority-owned BFB grain cropping, storage, transport and farm inputs business will be consolidated with the four-year-old Daybreak Cropping operation.

The united enterprises will be led by the current BFB senior management team, largely based in Temora in south western NSW.

Consolidation is set to create one of the leading cereal cropping operations in Australia - 41 farms across 10 aggregations in four states.

Aside from its broadacre crop activities PSP has accumulated farming and processing assets spanning cotton, nuts, pigs, dairy, beef and timber worth about $4 billion in Australia in the past decade.

The Canadian investment fund paid about $208 million in early 2019 for its BFB business in southern NSW.

At the time BFB was involved with dryland grain growing, a 332,000 tonne grain storage site owned in partnership with Cargill, a piggery and fuel and fertiliser distribution operations.

Globally, PSP ranks as one of Canada's largest pension investment managers which 12 months ago boasted about $220b in assets across real estate, infrastructure, natural resources and credit investments.

Warakirri Asset Management, which has also been a minority shareholder while managing the Daybreak business since early 2018, will transition out during the next few months.

However, it continues running PSP's majority owned Aurora Dairies, which includes 39 dairy farms and dry cow blocks in South Australia and across Victoria.

Daybreak was formed with an initial 12,500 hectares of grain growing country offloaded by mining and agricultural commodities giant Glencore, the parent company of grain logistics and marketing giant Viterra.

"We thank PSP Investments for a very successful Daybreak Cropping partnership, and we look forward to continuing our longstanding Aurora Dairies partnership, said Warakirri's managing director, Jim McKay.


Ottawa-based PSP Investments senior managing director of real assets and the global head of its natural resources investments, Marc Drouin said the latest development was "a natural evolution of our portfolio of broadacre farming assets".

"The combination of the businesses will allow us to simplify operating structures and capture the benefits from operational scale while driving growth, performance and results," he said.

Combining two operations was another example of PSP Investments' long-term investment horizon and commitment to the Australian market.

The pension fund had a particular emphasis on sustainability, but expected to drive operational efficiencies and achieve even stronger growth through continuous improvements to on-farm practices.

The transition was not expected, nor intended, to impact farm-level employees.

He said PSP appreciated and thanked Warakirri for helping Daybreak Cropping become "a world-class sustainable farming operation".

Warakirri's Mr McKay said his team was extremely proud of its role in helping establish a significant national portfolio of investment-grade broadacre cropping assets.

The investment management group prioritised a culture of safety and wellbeing of staff alongside its goals to achieve a scale sustainably by adopting global best practices.

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