2019 CEO Survey: Mark Allison, Elders

This has clearly been a difficult year on the east coast, says Elders’ Mark Allison

Elders Ltd chief executive Mark Allison.

Every year The Australian’s John Durie asks some of the biggest names in Australian business five key questions about what’s coming in the year ahead.

Here, in his own words, is what Mark Allison, the chief executive of agribusiness player Elders, sees ahead in 2020.

You can read more from the CEO Survey.

How is your company affected by low-interest rates and what is needed to boost the economy?

Low-interest rates provide a more favourable debt environment; however, the key drivers of agribusiness and regional rural economic activity is underpinned by average seasonal conditions. This has clearly been a difficult year on the east coast, and we expect a rebound in activity and production when the rain falls. Debt availability is not a first-order issue presently. Cash flow and working capital availability will be an issue for crop-planting inputs and livestock restocking when the break comes given the lack of recent income generation.

What is the impact of government regulations on your company, including those applying to the financial sector?

Implications are minimal, increased checks and balances are fine and will help the sustainability of the loans and services. Given the longer cycles in agriculture, the responsible lending doctrine must recognise the asset-heavy/cash-flow light nature of the agricultural production sector.

What percentage of company revenues are spent on research and development, and how is your company using technology to improve performance?

Technology in agriculture is vibrant and critical, given the relatively flat productivity gains in agriculture since 1997. With the backdrop of poor connectivity issues throughout regional and rural Australia, this remains the major limitation to technology adoption along with multiple, incompatible platforms.

What are the three major policy issues facing the country and what should be done about them?

The three major issues are around globally competitive infrastructure development, agricultural commodity R&D prioritisation and allocation, and productivity gains, and metropolitan community acceptance and support of regional and rural Australia, and agribusiness issues. It’s difficult enough in agriculture with environmental challenges, without our world-class animal welfare, land and water management, and environmental stewardship programs criticised with ignorance from our city cousins.

What are the major impediments to long term growth facing your company and what can or is being done about them?

At Elders, we always plan for an average season and have structured Elders cost and capital base allow us to make good money in bad seasons and great money in good seasons. Our results this year have confirmed this once again. We are confident that this will continue with our multiple diversification points by product, service, business model, channel and geography, setting a solid and stable platform for our growth. Impediments to our growth are mostly within our control. From an agribusiness view, the federal government driving free trade agreements and maintaining great relationships with our major trading partners like China and Indonesia are critical.