Wellard to focus on cattle exports as Troncone departure announced

Terry Sim, August 3, 2018

Wellard executive director, operations, Fred Troncone, at Portland last year.

WESTERN Australian live exporter Wellard Ltd has not ruled out future sheep shipments despite today announcing a strategic refocus centred on cattle trading and shipping.

But a spokesman said the increased amount of regulation in the sector would make it harder to re-enter the live sheep market.

The company spokesman said shipping cattle from Australia to Asia and chartering vessels to travel from South America to the Mediterranean are the immediate areas of focus.

“That doesn’t mean we would expressly rule out activity in other areas if they provided an acceptable commercial return for acceptable risk.

“Wellard has only exported a very small amount of sheep to the Middle East in the past few years, so the current events haven’t changed our activity in the region because we had limited activity anyway,” the spokesman said.

“We do see that the increased amount of regulation will make it harder to re-enter this market.”

Recent Wellard annual report and Department of Agriculture and Water Resources figures show that the company exported 8000 sheep in 2014-15, 23,000 in 2015-16, 80,000 in 2016-17 and just 7000 sheep in the first half of 2017-18.

In February this year, Mr Troncone said the company’s substantive re-entry into the Middle East live sheep trade was a goal rather than a reality and its last significant shipment into the Middle East as an exporter was more than two years ago. However, he said the number of inquiries for live sheep delivered to Middle Eastern markets was increasing, which also suited Wellard’s fleet profile.

“In the December quarter the company renewed its marketing efforts in the Middle East which resulted in a charter being signed in January for a large vessel from Australia into the Arabian Gulf.

“The company has since received further inquiries for other voyages into the region,” he said.

Troncone and Braithwaite depart Wellard

In a statement to the Australian Stock Exchange today, Wellard indicated a renewed focus on cattle shipments, while also announcing the departure of executive director of operations, Fred Troncone, and the appointment of current chairman and non-executive director John Klepec as interim executive chairman.  Mr Troncone also resigned today as a director of Wellard.

Wellard’s chief business development officer Scot Braithwaite has also tended his resignation to pursue other opportunities and will leave the company on 31 October 2018.

The company advised the ASX that Mr Klepec will take over the management of the company’s day to day operations as it underwent a strategic refocus of its livestock and charter divisions.

Wellard said its strategic themes remained the same, with a principal goal being to continue to rebuild the company’s balance sheet. The company will remain both a cattle trader and a charterer. In the immediate short term, Wellard will concentrate its charter division primarily on the South American live cattle export market to Europe, while its live cattle export division will narrow its focus to trading Australian-sourced cattle to the South East Asia market, where Wellard has been the dominant supplier.

In refocusing the strategy, the board and Mr Troncone concluded that this should be implemented by a new senior manager, the statement said. Consequently, Mr Troncone will leave Wellard and Mr Klepec was requested by the board to manage the operations role until a permanent replacement is identified.

Mr Klepec thanked Mr Troncone and recognised the significant contribution he has made to Wellard at a board level and as executive director – operations, particularly in helping stabilise the business during difficult market conditions, and in relation to a very successful costs-out program.

The company said Mr Klepec will work with Wellard chief executive officer Mauro Balzarini, who continued to focus on strategic planning and the development of growth initiatives.

Key terms of Mr Klepec’s interim arrangements with Wellard are included at the end of this announcement.

Mr Klepec said Wellard planned to release its financial results in the second half of August.

“When we released our financial results for the first half of FY2018 Wellard provided a detailed outlook for the remaining six months of the financial year.

“There have been no material changes between the outlook and the trading conditions that occurred in that time,” Mr Klepec said.

The company said Wellard vessels enjoy strong bookings to the end of calendar 2018. With cattle prices in Australia stabilising at lower, more attractive levels, the company is receiving increased interest from South East Asian markets and is looking at regaining market dominance in this core trade, the ASX statement said.


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