CPC

CPC is the largest privately owned beef producer in Australia

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Consolidated Pastoral Company (‘CPC’) is the largest privately owned beef producer in Australia. Its operations include breeding, grass- and grain-feeding cattle and domestic and live export sales across 16 stations comprising 5.5m hectares of land in Australia and two feedlots in Indonesia. Today, CPC has capacity to hold 367,500 head of cattle.

 

Investment strategy 

Asset-Backed: CPC owns and operates a portfolio of 16 cattle stations with a carrying capacity of 367,500 head of cattle across 5.5 million hectares of land in Australia.

Requiring Fundamental Change: Under Terra Firma’s ownership, CPC has transformed from being a cattle producer to an integrated premium quality beef and cattle supplier to international markets. Terra Firma has invested to grow the business, improve station capacity and cattle efficiency, and implemented integrated processes and systems to drive operational efficiencies and improvements along each aspect of the supply chain. This includes investments in technology, in particular a genetics program, and developing property assets. CPC was an undermanaged and under-invested business when Terra Firma acquired it in 2009. This presented a unique opportunity to acquire assets with attractive fundamental attributes and to assemble a robust management team to reposition the business into a well-capitalised, commercially focused organisation.

 

Creating Value 

  1. Transforming strategy

    • Upon acquisition Terra Firma introduced a more commercial mindset to the business along with an analytical capability to identify investment opportunities to develop existing assets, explore new geographical markets and make add-on acquisitions. Under Terra Firma’s ownership, CPC has repositioned itself to be a customer-focused marketer of beef, as well as a cattle producer. CPC is driving to be the industry leader in operations and genetics, as well as financial and administrative management.
  2. Strengthening management

    • Upon acquisition, Terra Firma strengthened CPC’s existing operational team with the appointment of several senior hires with decades of industry experience. CPC has invested in its people and developed an experienced and diverse workforce, employing up to 200 staff during the high season – of which around 40 per cent are women. The business provides important jobs to Australia’s regional and rural communities and is a strong supporter of employee training.
  3. Developing through capital expenditure

    • CPC has undertaken a significant capital investment programme to improve its cattle stations and increase their cattle carrying capacity. A number of strategic projects have enhanced all-weather station access to help drive year-round sales and reduce costs. CPC has also invested in increasing the productivity capacity of its land holdings through developing land-care activities, fencing, yards and new stock watering points.
  4. Building through mergers and acquisitions

    • Under Terra Firma’s ownership, CPC has improved breeding and grazing capacity through M&A. This has resulted in flexibility in the way which cattle are bred, grown and marketed, and it offers defensive possibilities in times of adverse climatic change.
    • In 2015, CPC increased its stake in its Indonesian joint venture, JJAA, from 50 per cent to 80 per cent to improve the business’s portfolio performance and its position in the beef supply chain.
  5. Lowering the cost of capital to create extra upside

    • Risk has been reduced through the establishment of a forward-looking management team, the creation of integrated systems and processes, and a more diversified geographical exposure for both production and sales markets. The latter is being further supported through partnerships and further involvement along the supply chain. 

Status of Investment: The CPC investment is unrealised.

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