Passion is what cultivates high-quality wheat
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In the Australian state of New South Wales, which located in the eastern part of the country, Sumitomo Corporation has one of its bases with which it conduct grain business across the country. We visited the state in November, when the local harvest season for wheat had began, to talk with local people who were producing or handling grain to be supplied to us and to understand their commitment to their business.
Plentiful sunshine and love are essential for making good wheat
First we visited Wagga Wagga, a town with a population of some 60,000 located about 470 km from Sydney. Australian Bulk Alliance (ABA), a grain storage company that became an affiliate company of Sumitomo Corporation, has a silo base about one and a half hours from Wagga Wagga by car. We were heading to the silo passing through a vast grain producing area. On the way to the silo, after being surprised to see kangaroos standing in wheat fields, we happened to meet a farmer who had just harvested his crop of wheat to be delivered to the silo.
This combine harvester has wheels that are as tall as the standing height of a person.
The farmer was growing wheat on moderate-sized farmland in Australia, extending about 2000 to 2200 acres, in other words 800 to 900 hectares, and in the harvesting season he said he was cooperating with two other farmers to harvest the crops and deliver them to the silo. In Australia, where some farmers have farmland more extensive than the total area of the 23 special cities which make up central Tokyo, the farmland owned by this farmer we met might not be considered very big. Nonetheless, remembering that the size of the forest where Pooh Bear lived was 100 acres, I was excited at the size of the farmland. It of course much takes time and labor to grow wheat on such a large area of land, but the farmer said, “I would spare no pains to grow and harvest high-quality wheat. The growth rate of wheat varies by location, and I do what I should do for the wheat based on its growth level. I harvest the crop only after the entire field changes color to shining gold.” He talked passionately to us, even though we had only met him by chance, and what he said demonstrated his pride as a farmer. He said he was leaving his farm to deliver the just harvested wheat to the silo by truck, and we also left his farm.
The color of the wheat produced in Australia differs by producing area. In eastern Australia, yellowish wheat used to make bread is harvested.
ABA’s strict quality control brings the best grain to the cutomers
At The Rock, which is one of the 13 silo bases managed by ABA in the inland area, grain delivered by truck is first brought into the inspection space where the composition and quality of the grain is analyzed for grading. Then the grain is measured and delivered to the specified silos and the management responsibility for the grain is transferred to ABA. The grain is stored in tank-type or flat-type silos and also piled outdoors. I was surprised to hear that grain could be kept in good condition for at least three years even if stored outdoors, provided that it is appropriately covered with vinyl sheet. While we were being briefed by ABA staff, the truck of the farmer, whose grain had now been graded at the inspection area, passed us by. Was his wheat classified as a high grade?
I strongly felt ABA’s commitment to quality at the export terminal located at the Port of Melbourne. Here crops are very carefully managed for export. Samples are taken from the grain to be shipped. The sample grain is spread on a conveyor belt to be inspected visually by the staff in charge. Some insects that are often mixed up in grain are smaller than one millimeter but experienced inspectors can discern these small insects from rapeseeds, which would be very difficult for nonprofessionals. If one single insect is detected, the entire silo in which the sample was stored will be fumigated. The storage capacity of a single large silo is at least one tonne and the fumigation treatment requires a considerable volume of gas and length of time. Thanks to these strict management measures taken both in the inland and port areas, people in Japan can enjoy eating safe and delicious bread and udon noodles made using wheat imported from Australia.
ABA has about 30 employees. In the busy harvesting season, they handle the trucks that arrive one after another with the help of students working as part-timers. (The person on the far left is Mr. Ryosuke Yanagi of Sumitomo Australia.)
Emerald, a company with foresight and innovative mind
Emerald Group Australia Pty. Ltd. (“Emerald”), which is an affiliate of Sumitomo Corporation, became the parent company of ABA in February 2012. This company has its head office in Melbourne, the second largest city in Australia after Sydney, and operates 15 bases across the country, including partners’ bases, to purchase and collect crops from farmers for sale. We visited the head office of Emerald on the day after we left Wagga Wagga and were welcomed by the 86 employees. At Emerald, the number of employees has increased by 70% since 2010.
Emerald has two distinctive features. The first feature is “future-oriented flexible management.” The company received investment and accepted directors from Sumitomo Corporation in 2010 and made ABA its own subsidiary early in 2012. The company is rapidly growing through continual innovation. Alan Winney, chairman of the company said, “In order to build a strong position in the highly competitive grain industry and achieve sustainable growth, it is essential for us to secure business channels across national boundaries and have a supply chain including logistics companies. We wanted to find a reliable partner for our global business development and to build up an excellent infrastructure for the business.” Because the leader of the company had both foresight and an innovative mind, the young company, which was only founded in 2004, has become a key player in the industry.
Chairman Alan Winney of Emerald (far right) says, “We have been successfully cooperating with Sumitomo Corporation despite the cultural differences. “ (The person in the center of the photo is Executive Director Hideki Hijiya and the person on the far left is Manager Masaki Sakamoto of Sumitomo Australia).
A win-win structure that actualizes the progress of both the partner and themselves
The second feature of the company is that it is implementing a unique “pool” system to collect grain from farmers, in addition to purchasing grain from them at the prevailing market price on the date of trade. In the pool system, Emerald becomes the owners of the crops when farmers bring them in to the silo of an affiliated storage company, such as ABA. However, payment is not made at that time. Emerald sells the crops on the market according to the prices offered. In other words, Emerald decides on the prices for the farmers and reimburses them over a period which is longer than one year. This is “management of grain,” for which farmers pay predefined fees to Emerald and receive the money for the crops depending on market prices throughout the year. This system enables farmers who have produced good crops to earn an appropriate return and demonstrates Emerald’s commitment to communicating with farmers and providing them with the services that meet their needs. The system indeed incorporates Emerald’s advanced product concepts and is designed not only for the sustainable development of the company but also for the sustainable growth of its partner farmers.
Australia meets nearly 40% of the demand for wheat in Asia. We visited the country and met the members of the silo base who were committed to the safety of the crops, farmers who were passionately producing good crops, and members of a company collecting the crops from farmers and supporting their passion for wheat production. I strongly feel from my visit to Australia that the grain business of Sumitomo Corporation is supported by a range of outstanding people, including those whom I met.
Freight ship anchored at the Port of Melbourne. The crops will be delivered all over the world from this port.
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