Agribusiness project to create more jobs in NSW

excess of $100 million in the first 5 years. The Riverina region would also benefit from an initial $20 million of capital purchases and project spending on items such as building, electrical equipment, utilities and services.

In September 09, a $63 million oilseed crushing and edible oils refining plant was launched officially at Wagga Wagga in NSW, to process up to 170,000 tonnes a year. Riverina Oils & Bio Energy Pty Ltd’s (ROBE) investment is one of the largest in value-added food business Australia-wide in recent years, and is being called the single largest Greenfield Indian investment in the eastern seaboard of Australia.

Melbourne based entrepreneur Mr. DD Saxena is the Managing Director and the promoter/founder of ROBE, with a significant shareholding. Mr. Saxena has worked with companies like Unilever, Ballarpur Industries (Thapar Group) and Bakrie International from Indonesia, where he was involved in establishing major agribusiness projects in Australia. The plant, at a Greenfield site on the outskirts of Wagga Wagga, is expected to be in production by November 2010.

PREETI JABBAL: How did ROBE with its strong Indian connection set up a project in regional Australia?

DD SAXENA: India is the world’s largest importer of edible oil. That makes the Indian connectivity of this project hugely important, both in terms of the investment and the export market. There have been larger investments in Australia by Indian companies, but they primarily have been acquisitions of existing businesses, particularly in the Resources sector. As the project is on a Greenfield site, we will be setting up the infrastructure like gas, water, electricity from scratch. A huge amount of time, money and effort will go into establishing the plant. This is the biggest value-added Greenfield project to date on the eastern seaboard, and shows how serious the ROBE and Indian commitment is to Australia.

PJ: What are the key elements of this project?

DDS: The company will export some of its 65,000 tonnes a year of refined vegetable oil to food industry customers in India, Japan, and other parts of Asia, Europe and the United States. It will also produce 105,000 tonnes a year of vegetable protein meal for use in the Australian poultry, dairy and animal feed industry.

Long-term, the plant will also produce up to 75 million litres of biodiesel, converted either from refined oil or imported palm oil. As well, Mr. Agarwal’s Bhoruka Group, which is one of the major shareholders of ROBE, is keen to explore the possible use of biomass, such as the residue from Riverina vineyards and citrus orchards or Queensland sugar cane, to generate power. Bhoruka group is one of the largest private power producers in India.

PJ: Who is expected to benefit from this project, besides the shareholders?

DDS: The project has significant benefits to various constituents and has a huge multiplier effect, with the key beneficiaries being Australian farmers, especially in the Riverina region. Once the plant is up and running, we expect to spend more than $60 million a year buying raw materials and other products from the Riverina region. The other benefits include the creation of 65 direct jobs and over 500 indirect jobs in construction, transport and other sectors, as well as the export of refined vegetable oil in

PJ: What are the funding requirements of this project?

DDS: This project includes $45 million of project construction costs as well as $18 million of working capital. The equity capital of $20 million is coming mainly from India and US and the Bank Debt from State Bank of India. The revenues generated at the full oilseed crushing/refining capacity will be in excess of $125 million per annum.

PJ: Who are the main shareholders in the ROBE project?

DDS: Bangalore-based businessman S. N. Agarwal’s Bhoruka Group is a key shareholder in this project. Mr. Agarwal also chairs India’s largest trucking company, Transport Corporation of India. Also in the ROBE founding team as a strategic investor and supporter is prominent Indian business executive Ravi Uppal, who was head of Asia Pacific operations for Swiss energy infrastructure major Asea Brown Boveri (ABB) until 2007. He now heads the power division of India’s global engineering and infrastructure company, Larsen & Toubro, which has a market capitalisation of A$23 billion. In addition to ROBE’s founding

PJ: A few months into this project, what is your main hurdle?

DDS: I won’t term it as a hurdle, however our project could benefit with some more support from the Australian Government. This is especially so as the project will deliver significant benefits to the city of Wagga Wagga and Australian farmers, creating 65 direct jobs in phase one, and up to 500 indirect jobs in the construction, transport and logistics sectors. Almost 15,000 truckloads or rail container movements a year would be needed to carry 350,000 tonnes of raw materials and finished products to and from the plant in Wagga Wagga. Clearly, the project has a strong multiplier component with exporters and associated service industries benefiting. However as of now, we haven’t received much in terms of financial or operational assistance from the Federal and NSW Government.

The ROBE Project is based in the country region, it’s about jobs, it’s got a high valueadd and it’s timely. Hundred such projects should happen in future. It is a matter of pride for the Indian community that such a project is in place. It also creates an interest in similar investments from India in the future, and can be a catalyst for more development. However, the Australian and State Governments need to provide much more support and encouragement than what we have received.