NAB senior leaders take a closer look at Australia’s trade and export sector – providing all-important insights into how regional and agribusinesses can best respond to today’s challenges and opportunities.
A family concern started in the early 19th century is now Australia’s largest onion and walnut grower. Webster features on the February pages of the NAB Agribusiness calendar and, here, CEO Leigh Titmus talks about their sustainable success.
Featured on the February pages of the NAB Agribusiness calendar, Webster Limited was founded by Alexander Webster in 1831, just 28 years after the settlement of Van Diemen’s Land. Over its long history, successive generations of the family have supplied various industries with everything from generators and pumps to refrigeration equipment. Today, Webster’s two operating divisions are both horticultural – Field Fresh Tasmania is the largest onion grower in Australia, and Walnuts Australia is the largest walnut grower in the southern hemisphere.
“There’s a limit on how many onions we can produce here in Tasmania– it’s pretty much capped at around 40-45 gross tonnes,” says Leigh Titmus, Webster’s managing director. “But a lot of our walnut orchards haven’t reached maturity yet. A walnut tree starts producing in year four and then the yield increases over five years from 3-400 kilos per hectare to 5.6 tonnes per hectare.”
Webster exploits counter-seasonal opportunities by selling both crops in the northern hemisphere – and, like most exporters, they’re suffering from the effects of the high dollar.
In the onion business, Webster is in direct competition with New Zealand for the European market so another challenge is the varying cost of labour. Tasmanian producers also have the Bass Strait to contend with.
“Since April 2011, there’s been no direct international shipping service to Tasmania so we’ve had no choice but to ship our onions through the Port of Melbourne and pay the newly- imposed Port Licence Fee.Bass Strait is a very expensive stretch of water, but at the moment we have no other way of reaching international shipping services.”
Responding to demand
Onions are a commodity and, as such, subject to fluctuations in global demand. “In 2012 there was an onion over-supply in the world but 2011 was a record year for us,” says Titmus.
Demand for walnuts is more consistent. It’s also consistently increasing thanks to growing awareness of their health benefits and higher disposable incomes in certain parts of the world.
“We’re confident in the walnut business,” says Titmus. “We’ve established markets in Italy, Spain and Germany and this coming season we’ll also be supplying The Netherlands and the UK. Outside of Europe we supply Turkey, China and Hong Kong.”
Competition is limited because barriers to entry are very high.
“After planting, you have to wait four years and spend around $30,000 per hectare before you get a return. You also have to invest in equipment for harvesting, hulling, grading and drying the nuts down to the eight percent moisture content that makes them shelf-stable.”
Walnuts are sold internationally in US dollars. To reduce Webster’s exposure to exchange rates, Titmus is keen to earn more local currency.
“To this end we’ve raised capital to set up a cracking facility in the Riverina,” he says. “At the moment we send our nuts to Vietnam to be cracked but, within 12 months, we’ll be able to produce the kernel here, reducing our costs and reducing our currency risk. Two major retailers are keen to replace imported product with Australian walnut kernels where possible.”
Webster sees its major marketing advantage as being a reliable producer of safe food products backed by stringent quality and traceability systems.
“We provide the high quality, healthy and safe food that is so important to customers today.”
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