The Growth and Diversification of Primac Merchandise

A first hand account written and presented by Mr. Wayne Fischer

Merchandise Division

I joined Primac as General Manager Merchandise in late 1985 and had the pleasure of retaining the position for the next twelve years. During this time, we had the support of two CEO’s in Don Swan and Bruce Sneddon and the Board, who supported the growth and diversification of the merchandise division.

“Supplied by Primac”: The stickers say it all, in the 1980’s & 90’s Primac Merchandising was the “go to” rural merchandise supplier.

Photo: Courtesy of Valerie Weise Young

Primac’s Merchandise team were very active in quality acquisitions:

Primac always had good market share in the traditional general merchandise and animal health markets across Queensland and in particular throughout the western branches. A few branches on the Darling Downs had ventured into agricultural chemicals and fertiliser with success. A decision had been taken just prior to my arrival to acquire the business of AW Rasmussen in Mackay and enter the coastal ag chem and fertiliser market. This met with some challenges as the then Consolidated Fertilisers (now Incitec Pivot) were quite hostile towards Primac and it took some time with head office discussion and local perseverance by Mackay staff to eventually get support from them. This acquisition proved successful and gave the Board confidence that diversification into the coastal markets could be successful.

Primac had also moved into the wholesale veterinary supply business (Primac Vet Supplies) with a specialist staff selling ethical products to veterinary surgeons with good gains made in market share.

The next move was the acquisition of JH Williams in the Northern Rivers of New South Wales. JHW was a large family business with major market share across the region. Primac acquired the rural business and Williams retained their hardware outlets. The business was badged Primac JHW with branches in Labrador (Southport), Tweed Heads, Cudgen, Murwillumbah, Kyogle and Alstonville. A greenfield site was opened in Grafton a couple of years later. Further expansion in the region came with the acquisition of the Gippsland and Northern branches in Casino and Grafton which gave Primac access to livestock activities. Along with the rural businesses J H Williams had a seed division which was included in the acquisition and Primac Seed was setup to both import and export seed. The focus was on both pasture and recreational turf seed. Export markets included Japan, America and the Middle East with imported seed for pasture and the turf business. Primac Labrador supplied most of the turf seed and other products into the Gold Coast and North Coast recreational turf markets.

In North Queensland, Primac attracted the attention of a  group of Elders employees who were keen to join in on our expansion. They had a significant business based in Townsville with depots and sales representatives based in the Burdekin (Ayr and Bowen), Ingham, Tully and Innisfail. This move proved to be highly successful and Primac gained significant market share along the North Queensland coastal strip. Around the same time Bakers Creek Produce was acquired and added to Mackay branch which gave coverage south towards Sarina.

With a significant increase in business, it was clear that the exiting distribution center in the old wool store was not adequate to service the needs of the merchandise and veterinary supply business. A decision was taken to move the center to a purpose built complex at Coopers Plains and incorporate a retail store. This move proved successful and provided logistical, purchasing and marketing services to the branch network.

By this time Consolidated Fertilisers had made a complete about face and were very supportive towards Primac and encouraged us to acquire their agent in Tolga, which we did. As well as a strong fertiliser and chemical business servicing the southern Atherton Tableland the business also had a fertiliser blending operation. Bulk fertiliser was trucked up the range from Cairns to Tolga and the fertiliser was blended to suit individual farmers requirements. Unknown to us at the time they were also blending a small quantity of loose mix for graziers in the Gulf. This was the start of Primix (more on this later). With Tolga and Mareeba branches, Primac had major market share across the tableland.

By now word was out that Primac was on the hunt for more acquisitions and we purchased the Southern Queensland business of Agtec with branches at Caboolture, Cleveland, Kalbar, Stanthorpe and Coopers Plains. The Coopers Plains business was moved across the road to the Primac distribution center.

Another Consolidated Fertiliser agent became available at Tully and we proceeded with this acquisition. This added further strength to our North Queensland operation and added further volume to the fertiliser and chemical activities.

Thought was given to expanding the Primac footprint and a decision was taken to investigate setting up in Victoria. The first location was a greenfield site at the Dandenong saleyards. This was successful and an acquisition was made of a business in Bendigo, Northern Seed Supplies. While both businesses were successful, we weren’t able to find other acquisitions or greenfield locations and our move to Victoria did not meet with the same level of success that we had achieved elsewhere.

A number of key merchandise branches either moved to new locations or had extensive upgrades to improve their ability to adequately service our expanding merchandise business. Good gains were made in the broadacre and irrigation cropping markets on the Downs and Western Downs as well as Central Queensland. Not to forget the traditional markets of animal health, animal nutrition and general merchandise which also increased market share.

In the early 90’s Primac merchandise joined with Websters (Tasmania), Rural Traders Cooperative (Western Australia) and Murray River Wholesalers (South Australia/Victoria/New South Wales) to form a buying group called National Agrimerchandising Network. Primac was the largest participant, but by combining all four businesses in one group we were able to secure better purchasing power and security of supply.

Primix

As mentioned, when Primac acquired the Tolga business, a small quantity of loose mix was being manufactured and sold to Gulf graziers. The Tolga staff saw a significant opportunity to grow this business and began to canvass further into the Gulf and the Barkley Tableland. This proved to be very successful and the business grew to around 7,000 tonnes annually. After many upgrades to the Tolga plant, it was obvious that further growth could not be sustained, so the business moved to a location in Townsville where new plant and equipment was installed. The business continued to grow servicing customers across Northern Australia from the Gulf to Kununurra in the west. I think the volume grew to around 35,000 tonnes before the business was sold leading up to the Elders takeover.

Primart

Primart was a new initiative located in Townsville with a focus on streamlining product distribution across Northern Australia. Primart provided a catalogue of products for customers to view and place an order on Townsville for delivery either direct or to the local branch. In some ways Primart was a forerunner to the way a lot of business is done today over the internet, but of course in those days we didn’t have internet.

By the mid 1990’s Primac was by far the leading merchandise operator in Eastern Australia and highly regarded by supplier companies. Our turnover grew from around $33m in the mid 1980’s to $174m just before the Elders takeover. The philosophy was simple – “Have a strong branch network focused on providing quality product and service supported by a head office team with excellent relationships with key supplier companies and good logistical capability”. In the main I believe we achieved this objective.

Associated Companies

New Zealand Agriseeds / Hodder & Tolley / Heritage Seeds

Through relationships developed with Primac Seeds, Primac invested in a New Zealand company New Zealand Agriseeds. NZA purchased the forage business of Yates New Zealand and along with three of the Yates employees and a Dutch company Barenbrug, Primac had a 25% shareholding. NZA had a focus on developing new rye grass varieties and had a world class plant breading research station of 224 hectares at Darfield on the Canterbury Plains near Christchurch. Primac received an annual dividend as well as access to new varieties suited to Australian conditions.

Elders owned a business in New Zealand and Australia called Hodder & Tolley. H&T specialized in seed coating as well as seed sales. During the low times for Elders in the Elliott years, the H&T business was put up for sale. The New Zealand business was bought by staff and along with New Zealand Agriseeds, Primac acquired the Australian business of H&T with a 50/50 joint shareholding. One stipulation in the sale contract was that the business could not continue to trade as Hodder & Tolley. After much deliberation we came up with the name Heritage Seeds and developed the business into a leading seed supplied across Australia. Primac received an annual dividend, access to product and a favorable trading arrangement.

Primac’s shareholding in both New Zealand Agriseeds and Heritage Seeds was sold leading up to the Elders takeover.

Performance Feeds

Through the Primac Chairman, Robin Hart, we were introduced to an American nutritionist Dr Hollis Klett. Hollis had been doing some consulting work for Robin and a few other feedlots. As well as consulting in the US, Hollis also had a liquid supplement business. He was keen to develop a similar business in Australia and we commenced discussions with him. As a result, Performance Feeds was setup on a 50/50 joint shareholding with Hollis and a liquid supplement plant was constructed at Kingsthorpe to supply product for feedlots and the grass fed markets. The arrangement was that Performance Feeds would supply feedlots on a direct basis and Primac would deliver the range product Anipro. Some of you will have fond memories of the Anipro trucks delivering product.

Performance Feeds was and still is highly successful and a leader in liquid supplementation with plants now at Kingsthorpe, Kyneton and Dalby. Primac received an annual dividend from Performance Feeds and distribution of Anipro for a period of time. A clause in the shareholding agreement was that if either party was taken over and the surviving partner didn’t approve of the new partner then they could buy the other 50% shareholding. Hollis enacted this clause when Elders acquired Primac and took 100% control.

A field study trip to Colorado in the USA by Bruce Sneddon and Dr. Hollis Klett, resulting in the joint venture between Dr Hollis and Primac to form Performance Feeds.

Picture 1 is Bruce Sneddon and Dr. Hollis Klett of Performance Feeds standing next to an Anipro trough in Colorado USA

Picture 2 is Bruce and Hollis talking to a group of ranchers in Colorado

Picture 3 is cattle on range country in Colorado

Photos courtesy of Wayne Fischer

Top L. to R: Peter Mutimer (Vet Supplies Brisbane) Richard Handley (Dalby) Peter English (Logistics Brisbane) Ian Mullaly (Labrador) Mike Tedford (Casino) Ken Brand (Townsville) Nev Holden (Toowoomba) Scott McDonald (Cleveland)
Second Top Row: Henry Prichard (Cudgen) Jack Stevens (National Merchandise Manager, Adelaide) Lewis Jenkinson (Beaudesert) Brian Gordon (Gatton) Bill Jones (Jandowae) next ? John Maughan (Bundaberg) next ?, next ? (possibly Victorians)
3rd Row: ?, Murray Otto (Murwillumbah) Darryl Schffe (Alstonville) Ross Carney (Qld Merch Manager) Dennis Wardell (Caboolture) Brian Cannon (Brisbane) Kevin McColl (Primart Townsville)
4th row kneeling: Cameron Ayre (Brisbane Retail) Steve Arber (Grafton) Sam Marino (Stanthorpe) next ?, next ?, Scott Andersen (Brisbane)

Photo: courtesy of Scott Anderson

I hope the above account gives a good overview of the merchandise business through the 80’s and 90’s. A lot happened over the twelve years I do apologise if I have missed an event of importance.

Thanks to all who contributed to the success of the business. Sadly, a lot of the business has been lost to competition, but most importantly we still have the memories.

Wayne Fischer

Additional Information – Growth and Diversification of Primac Merchandising

There were two things that I left out of my original article on the growth and diversification
of Primac Merchandising.
The first was, I should have included the purchase of Barry Reynolds Produce Casino when
listing the acquisitions we made in the Northern Rivers Region. This business filled a gap we
had in the area and added significant sales and profitability. Barry stayed on as an employee
and he made a strong contribution to the network and remained a supporter of Primac. A
saying Barry had when referring to head office was “yous blokes in Brisbane” particularly
when he wanted to make a point about a decision that had been made.

The second was National Agrimerchandising Network (NAN). I mentioned that along with
three other companies we formed the buying group NAN. You never know where these
things end up. After a couple of years, NAN merged with the then Combined Rural Traders
(CRT) and formed a new company called Ruralco. At the time of the merger negotiations, I
was the Chairman of NAN and Don Swan (ex Primac CEO) was the Chairman of CRT. You can
imagine the discussions that went on behind the scenes with both trying to get the best
possible position!! Ruralco was setup, with myself and another NAN executive on the first
Board, but over time it was evident that there was too much conflict of interest between
the four NAN companies and CRT outlets, so we left the group.

Of course, it is now history,
Ruralco became a listed public company on the ASX and grew from strength to strength,
made many acquisitions including a number of livestock businesses and recently was
acquired by Nutrien. Not sure how the Nutrien branch and CRT outlets are getting on, but I
am sure there are a few challenges.

I hope you find this of interest.

Wayne Fischer