Getting the good oil

RIVERINA

When Riverina Oils and BioEnergy (ROBE) opened its state-of-the-art plant in Wagga Wagga last year, it was one of the largest value-added food and agricultural investments in Australia in the last five years.

The project has brought significant benefits to the NSW regional community; including farmers, transporters, storage, engineering companies, contractors and the entire supply chain industry.
While new infrastructure is always exciting, it also requires a solid business plan or it can very quickly end up as an expensive mistake. In the case of ROBE, it was taking a product perceived as a basic commodity, and looking at what could be done to differentiate from the competition, and what could be value-added to the core business.

“At the end of the day we can’t get away from the fact that we are essentially an ingredient supplier,” says ROBE Managing Director DD Saxena. “I mean, anyone who cooks, uses oil, but we’re trying to help people recognise that not all oil is the same.”

Much of this communication has be done by building a very strong non-GMO (genetically modified organism) platform.
“We’re the only Australian company certified as non-GMO in the USA, and only the second as we speak today in the USA in total. That gives us a huge platform in a country which is moving towards natural products, and has companies with a focus on baby products and foods that require this level of quality.
“By creating a non-GMO platform we have created a market which has growth and is highly sustainable.”

The second platform for ROBE was to communicate that it creates low trans-fat oils. DD says that there is still a lot of confusion throughout the general public about trans-fat oils, but most acknowledge that it is preferred to have as little as possible – and, by nature, canola oil is low in trans-fats thereby allowing ROBE to consistently manufacture one of the lowest level of Trans Fats  in the country.

“We certainly think that the healthier oils are going to be the future of the world,” says DD. “The likes of China, the Philippines, India, Korea and Japan are big markets for healthy oils. Many of those countries have enormous populations so to reach only 5% of that market is massive growth for any Australian manufacturer.”
Indeed, the raw numbers make for very interesting reading. As DD explains, the Indian market for canola oil is at approximately 18 million tonnes, yet their local production is at only 7000 tonnes – whereas the Australian market demand is over 200,000 tonnes whilst producing nearly 450,000 tonnes. The market potential is very clear – particularly if the Australian suppliers continue to put a focus on quality, premium produce.

“My philosophy is I think Australia should very seriously invest in the front end of the business where it can crystallise our food safety, food security, and food reliability value. That’s one thing that we at ROBE we will continue to do.”

The ‘healthy oil’ platform is a positive and logical step at a communication level, and an intelligent marketing angle for consumers; however, as DD explains, to leave the business plan there would be missing a huge opportunity.

“When we crush seeds we get two products; we get edible oil and we get vegetable protein meal which is often used in animal feed. By achieving non-GMO and low trans-fat technology, we are creating a quality product at both levels.

“The more you add value, the more you’re going to create market access. You’re going to create a more sustainable and reliable market which will take you up the value chain. If you’re a price taker and pure commodity supplier, you’re not building a sustainable business.

“Ultimately, it’s people who add value. When you export wheat, people make wheat noodles out of it. When you export barley, people make malt out of it. When we export oats it can be processed into a finished oats product which is used in breakfast. The moment you start thinking value addition, you’re talking three to four times the value of the original commodity.”
The drive to create the value-add, says DD, comes from having the right people around you.

“I’m a great believer that people make the organisation. We can have the best asset in the world, but if we don’t have a motivated team that is committed, has passion, a sense of pride, a sense of psychological ownership and a commitment to success, then the asset will be of no great value.”

Naturally, this extends from the people within ROBE to the creation of intelligent strategic partnerships – particularly when looking to enter new markets.
As any exporter will tell you, utilising and leveraging local knowledge and expertise is critical when breaking new territory.
“Put simply, if you want to enter into Asia, then the best way is by choosing the right strategic partner with the right fit, the right mindset, the right mind vision and the right alignment of objectives,” says DD.

Whilst balancing the opportunities internationally, ROBE is also committed to offering the best service and supply for its customers and partners within Australia. Even after the massive investment in infrastructure and the ability to produce massive quantities of product, DD highlights how they still have their own packing centre and service local restaurants and cafes in quantities as small as 20 litre tins.

It’s an obvious challenge to remain customer focused at such a localised level, yet keep an eye open for the massive opportunities overseas, yet DD believes that ROBE has the product to appeal to all, and the structure to handle both. It’s been a very big 12 months, but the future looks even bigger. BFM



Business First is a peer-to-peer magazine: written by CEOs and other high level executives, with interviews with some of the country’s best leaders.