GrainCorp boss Robert Spurway brings in bumper harvest with family challenges through Covid

Robert Spurway says the pandemic helped him change GrainCorp for the better, as a bumper harvest awaits.

Robert Spurway, the CEO of Graincorp, says the pandemic helped him change GrainCorp for the better, as a bumper harvest awaits.

On the morning of March 15, 2020, Robert Spurway waved goodbye to his Christchurch home, his wife Kylie and daughters Charlotte and Grace for what was supposed to be a three-day trip to Sydney. He didn’t see them again for more than eight months.

The chief executive-elect of GrainCorp had planned a fleeting Australian visit to attend a meeting of the east coast grain handling giant’s shareholders to approve the demerger of its prized malting operations into a stand-alone, ASX-listed company called United Malt.

A day earlier New Zealand Prime Minister Jacinda Ardern proudly proclaimed that New Zealand would have the widest-ranging and toughest border restrictions of any country as the Covid pandemic took hold around the world.

“It was literally on the 14th of March that borders started closing. I decided to pack two suit cases rather than one in case three or four days or a week turned into several. I must admit the farewell from my wife and daughters at home in New Zealand was ‘this may be two or three months, but hopefully no worse than that’,” he tells The Australian.

A week later, on March 23, Spurway started as the 104-year-old company’s new boss — the fifth chief executive since the former farmer-owned GrainCorp listed publicly in 1998.

Marooned in the Sydney CBD in an apartment he and his wife had hand-picked for his new job, precisely 46 steps from the grain giant’s head office in Liverpool Street, Spurway had nothing more to do than throw himself head first into his new challenge.

Now 10 months on, he reflects on the Covid chaos as a blessing in disguise.

He was able to get to know his people more intimately than most new CEOs by running more than 50 small group video sessions and taking multiple virtual site tours as GrainCorp’s operations — deemed an essential service — ground on during the pandemic.

Living next door he was able to work from head office, preparing staff for the nation’s second-biggest grain crop in history, which will underpin GrainCorp’s results for the next two years and has helped add more than $1 to the share price since the end of March.

More importantly, the bumper harvest will give the long-embattled company much-needed breathing space to pursue a range of growth initiatives that were only mere dreams during previous years of crippling drought.

But nothing quite prepared Spurway for the personal challenges he encountered during 2020.

“It was a long time,’’ he says of the eight months and three days he spent away from his family as Covid closed down travel between Australia and New Zealand.

“It was extraordinarily difficult in one sense but we did stay in regular contact on FaceTime and with video calls, several times a day. The hardest thing is from a family point of view, my wife had to — alone without any support — look after two teenage children. They are both capable and fine on their own but it was certainly tough on the family being away.”

But there was an unexpected bonus in the pain. Before the pandemic struck Spurway’s eldest daughter, 18-year-old Amber, had started her engineering degree at the University of Queensland, following in her father’s footsteps — Spurway is a chemical engineer by training.

When the campus colleges shut down in late March, she jumped on a plane to Sydney and spent the next four months living with her father.

“She looked after me as much as I looked after her,” Spurway says.

“That was another way we as a family could rationalise it and cope. We were supporting each other on both sides of the Tasman.”

Homecoming

Robert Spurway’s trip across the Tasman at the end of March was something of a homecoming.

Born in Sydney, he moved to New Zealand at the age of four and began his business career as a chemical engineer in the local dairy processing sector.

From 1999, he spent 12 years working in NSW, South Australia and Queensland, starting at the baking and milling business of Goodman Fielder and then in the fresh retail salad and ready-made meal sector.

He returned to New Zealand in August 2011 to join Fonterra, eventually becoming chief operating officer of its global operations. In September 2019, he quit the role after almost six years, the struggling co-op posted a disastrous $600m loss hit by hefty write downs, and was headhunted to GrainCorp.

“One of the things that is different about Fonterra is it is a co-op. That brings a mindset around the importance of your suppliers,’’ Spurway says.

“Now it is growers in our case. While GrainCorp is a listed company, the one thing I appreciated from Fonterra was the importance of really connecting closely with the growers that are critical to the success of the business.”

His return to Sydney to run GrainCorp, in a world where travel had become an afterthought, provided him with the opportunity to think about connecting with his growers differently.

In more than 50 virtual meetings with no more than six people at a time in the early part of his tenure, Spurway asked each attendee to proffer a fun fact about their lives.

“I then had one ask of everyone: I asked them ‘If you had my job for a day, what is one thing you would change and what would you keep doing?’,” he says.

Thankfully, there were no surprises in the responses. But there was a clear message.

“There had been an era in the business where they felt a lot of activity was happening, which wasn’t adding value at the grassroots; not focusing on what was important to the business and our customers,” he says.

“But people that work in agriculture throughout the supply chain are generally pretty resilient. That equipped people generally to deal with the pandemic.”

The demerger also focused the company on what mattered, which is showing through in the bottom line. In November GrainCorp reported an improved financial performance following a year of significant transformation.

“Covid allowed us to think really clearly about what was important for people. That helped us manage and run the business in a clearer way than it was done previously. All of that has brought a sense of urgency and accountability in what we do. Having our people operate in a way that they feel they own the business,’’ Spurway says.

He has long lived by a simple mantra: When you make public commitments, you deliver.

Grain stores at a GrainCorp site. Picture: Supplied GrainCorp

“People were really enjoying the greater clarity and autonomy that they had through a leadership team being clear what the priorities were. We prioritised delivering on what we said we would. The staff understood they had a leadership group that was following through,’’ he says.

“People were also keen to understand what was next for GrainCorp — how we were going to grow. Refreshing the strategy and direction of the business and examining the growth themes.”

Spurway has never lived on a farm, although his father-in-law is a retired farmer from New Zealand’s Northland district at the tip of the North Island.

Perhaps it has crossed into his blood. Those in the rural sector that know him say he understands farmers. They also describe him as a “straight-shooter” with “no BS about him”.

Getting on with the job

In the investment markets, Ellerston Capital investment manager Chris Kourtis — a substantial shareholder in GrainCorp — simply says Spurway is “getting on with the job”.

“He comes across as a no-nonsense-type manager who understands the business and the agricultural sector at a time when seasonal conditions could never be better,” Kourtis says.

“This is one of the most mis-priced companies on the ASX given the quality of its strategic infrastructure — its regional ports and silos — in a space where infrastructure securities trade at 3-4 times the multiple this company trades on, due to its previous historical earnings volatility.”

Indeed. Spurway agrees that GrainCorp, at its heart, is “fundamentally misunderstood by people”.

“The underlying quality of our infrastructure is where investors and stakeholders get excited. People haven’t understood the value those assets can drive in the future and the reliability of earnings that comes from that network,” he says.

“What is exciting about the current harvest is we can demonstrate the work done in the past three years on the infrastructure.”

Much cost-cutting was done by former GrainCorp boss Mark Palmquist during the years of drought, which has helped better optimise the network and improve turnaround times during the current harvest.

Excited about the crop

ABARE in December upgraded its Australian winter crop forecast to a bumper 51.5 million tonnes, second only to the 56.7 million tonnes of 2016-17, underpinned by the biggest crop on record in NSW and the second-largest ever in Victoria.

The forecast was 7.4 per cent higher than ABARE’s September numbers due to favourable Spring conditions.

“We are enormously excited about the crop that is significantly well harvested. We have now collected over 10 million tonnes into our network. It is shaping up, from our perspective, to be a very positive outlook,’’ Spurway says.

Apart from the agricultural harvest business, Goldman Sachs also believes GrainCorp will make more money from its trading and processing businesses in 2021.

Spurway says the bumper crop gives the company time to drive a strategy to grow the business to be more resilient and deliver stronger, higher quality earnings in the future.

Asked for his five-year vision for the company, Spurway declares there is an opportunity for agriculture generally to be much more prominent in Australian business circles.

“In terms of just the importance it brings to not just the Australian economy but in particular regional economics,’’ he adds.

Broader earnings streams

He wants to leverage the capabilities GrainCorp has already developed in the digital and technology space.

“I can see some huge growth opportunities not just to support the relationship that we have with growers and the efficiency of our own business but perhaps leveraging some of those capabilities more broadly across the agricultural sector. We have a number of small portfolio businesses within GrainCorp that have huge potential to grow with the right partnerships,’’ he says.

He points to the CSIRO‘s seaweed-based FutureFeed venture aimed at commercialising a methane neutralising stockfeed additive, which has won financial backing from the likes of GrainCorp, Woolworths and Andrew Forrest’s agribusiness, Harvest Road.

“Those partnerships provide a huge opportunity for growth. We will still see grain as the core of what we do, but have much broader earnings streams from a wider range of activities across the sector,’’ he says.

Ellerston Capital’s Kourtis backs Spurway’s vision.

“Their crop protection strategy and their cost cutting initiatives should iron out that volatility going forward, which should give an uplift in-through-the cycle earnings,’’ Kourtis says.

Spurway has been around long enough in agriculture to know that eventually in Australia, there will be another drought.

“The old agricultural adage ‘make hay while the sun shines’ is there for a reason,’’ he says.

“But the one thing I haven’t lost sight of is we are looking at this business being much more profitable not just by relying on good harvest years but throughout the cycle. I want the business to be stronger not just in the good years, but all years.”

The year has also ended positively for Spurway on a personal note. Late on the evening of December 8, his family was reunited at their home in Christchurch after his eldest daughter was released from mandatory two-week hotel quarantine.

Talk of a trans-Tasman travel bubble had given them hope of being reunited much earlier, but it never eventuated. Robert Spurway and family are now enjoying a Summer holiday together and like many, putting 2020 behind them.

“Interestingly, even after a few hours at home you slot back in and I guess it is a sign of a good relationship that it felt like perhaps I had only been away a few weeks, not eight months,” he says.

“Perhaps the best way to describe it is, it felt like it had been a long couple of weeks at work!”