Let's dish for a moment on Ricegrowers Limited. The company, which does business as SunRice, is one of the world's largest rice product suppliers with operations in Australia, Asia, the US, the Middle East, the Solomon Islands, and Papua New Guinea. Its facilities mill and pack rice and rice flour and manufacture rice cakes and ready-to-eat rice meals, which are then marketed and distributed in Australia and certain international markets under the SunRice brand and subsidiary brands. SunRice traces its roots to the establishment of Ricegrowers Co-operative Mills Limited in 1950.
SunRice is organized into four main segments: rice milling and marketing; Riviana Foods, an Australian subsidiary that covers the importation and distribution of pickled vegetable and Mediterranean food products (not to be confused with this Riviana Foods); Australian Grain Storage, a subsidiary that handles the receiving and storage of paddy rice in Australia; and all other segments. Other key SunRice subsidiaries include majority-owned Trukai Industries, the leading supplier of rice products in Papua New Guinea, and wholly-owned Solomons Rice Company, which distributes rice products in the Solomon Islands. SunRice division CopRice deals in animal feed.
Although SunRice was riding high on a one-off record profit in fiscal year 2009 due to a significant global rice price cycle, business returned to more normal levels of performance in fiscal year 2010 after prices softened again. Consolidated revenue reached $817 million, 9% lower than the previous year. Profit after tax was $11.7 million compared to $76.8 million for fiscal year 2009. Going forward, SunRice expects its growth may be somewhat hampered by the Australian government's water policy reform efforts, which could reduce water availability for its rice growers. Other potential negative impacts on the company include the Australian dollar rate exchange, local droughts that affect milling, and the withdrawal of government funding for agriculture-specific research and development.
In light of these variables, SunRice is turning to certain subsidiary businesses to continue to perform strongly: Riviana posted another year of growth in 2010 on the strength of its Always Fresh brand and its expansion into the foodservice sector. Meanwhile, SunFoods, its joint venture in the US, made efforts to upgrade its HINODE rice brand and roll out sales distribution across the US. HINODE's entry into the ready-to-eat meal category represents a larger strategic move by SunRice to shift its product mix to higher marketing value products to deliver stronger volume and margin growth. In addition, the company is boosting its visibility with advertising campaigns and a partnership with UNICEF. – less