The Gilmac case - a successful Australian agribusiness

Take home messages

• Maintain a commitment to high standards in product quality and in performance reliability in dealing with customers, suppliers and staff.
• Drive to innovate, i.e. finding ways to do things better – turning problems into opportunities.

The Gilmac story

Fodder export business

Peter Mackie started a fodder export business at his New Norcia WA farm in 1987. From a tenuous beginning that business, now in the entity of Gilmac Pty Ltd, has grown to be Australia’s largest fodder exporter. Shipments from its four pressing plants in three states represent approximately 30% of the close to 1 million tonnes of containerised hay and straw now leaving Australia each year.

Pelletised ruminant feed to the domestic market

In 2000 a pellet mill was established at the Gilmac New Norcia pressing site to supply pelletised ruminant feed to beef and lamb growers and live export shippers in WA. At the time of Gilmac’s entry the WA market for pelletised ruminant feed was well established with at least three experienced competitors.

It took five years for Gilmac to achieve acceptable profitability in its feed pellet venture. The breakthrough came not suddenly but progressively as the Gilmac focus on relevant product quality and reliable service gained recognition amongst buyers. Since that was achieved the Gilmac feed pellet line has operated profitably at close to optimum capacity despite substantial swings in market demand.

An important factor in Gilmac’s pelletised feed business success was the fact that it was undertaken as the “little brother” to an already established and profitable enterprise. The two enterprises shared many commonalities.

Other opportunities

Since it established its fodder export business Gilmac has committed a significant part of its annual cash flow to investigate and evaluate other agribusiness opportunities. Apart from pelletised ruminant feed candidates investigated include artificially dried lucerne hay, straw-based particle board, upgrading oil seed meal, manufacturing of fodder processing equipment, alternative methods of hay storage and Australian feedlot dairying. Several of the latter candidates remain under consideration and search for new candidates continues.

Foundation stones of Gilmac’s success

• Commitment to high standards in product quality and in performance reliability in dealing with customers, suppliers and staff.
• Drive to innovate, i.e. finding ways to do things better – turning problems into opportunities.

History of export fodder business problems and solutions