Elders Limited

Infobox Company
company_name = Elders Limited
company_
company_type =
genre =
foundation = 1839 in South Australia, Australia
founder = Alexander Lang Elder
location_city = Adelaide
location_country = Australia
location = Adelaide
origins =
key_people =
area_served =
industry =
products =
services =
revenue =
operating_income =
net_income =
num_employees = over 4000
parent = Futuris Corporation
divisions =
subsid =
owner = Futuris Corporation
company_slogan =
homepage = www.elders.com.au
dissolved =
footnotes =

Elders Limited is an Australian based agribusiness company.

It was founded in 1839 in South Australia by Alexander Lang Elder as a new arm of his family's Scottish based merchant and shipping business. It's core business was a trading company and commission agent for wool and other agricultural products for sale back to Britain. Elder believed there were good business opportunities for trade out of the colony which had been newly proclaimed in December 1836.

Founders

With the fledgling colony of South Australia only three years old, Alexander Lang Elder arrived in Port Misery (now Port Adelaide) in 1839 aboard the family-owned Minerva to launch a new arm of the Scottish based merchant and shipping business.

Alexander Elder was a member of a Scottish merchant family which had decided there was real potential in the newly founded colony of SA and he was dispatched to both set up business and explore opportunities – particularly in goods that could be returned to Britain for sale, such as wool.

Alexander Elder battled for the next few years consolidating the business until the copper boom in the mid-north of South Australia in 1842 turned things around. Elder branched out as a metal broker and the company never looked back. Alexander’s brothers, William, George and Thomas joined Alexander but it was Thomas who stayed on to become an Australian while the other three eventually returned to Scotland and England.

It was Thomas who realized the potential of the pastoral Outback and it was under his encouragement the business imported camels to arrange transport. This unlocked the vast interior of Australia, making it possible to tap into the Great Artesian Basin and the hidden water that made grazing viable. He was laying the foundations of a national business empire that would be built on the back of the sheep but which was funded with cash from the copper boom; cash that enabled him and his peers to acquire huge tracts of land.

1900-1910

Already an economic cornerstone of South Australia, by the turn of the century Elder was looking west for expansion and in 1903 acquired a one third holding in the WA wool business of George Shenton.

The following year, with Elder's expertise and encouragement, the new partnership took the business beyond its Fremantle headquarters and into rural WA, sending its Port Augusta manager JO Giles to organise a branch and livestock sales at Northam.

At the same time a Port Augusta friend of Giles, WJ Gillett, opened the Beverley branch in Western Australia.

The first sale at Northam yarded 235 sheep, five cattle and three pigs.

JA Primrose arrived the following year from Adelaide to set up the merchandise department and remained its manager for the next 38 years.

Elders WA had begun and the first steps had been taken towards a branch network that would eventually extend from Kununurra to Esperance and Perth to Kalgoorlie.

1910-1920

This decade was the crowning glory of Robert Barr Smith, a University of Glasgow graduate who married Elder’s sister Joanna in 1856. Thomas Elder and Robert Barr Smith had several joint business dealings before merging to form Elder Smith and Company in 1863. Barr Smith would become the long-serving director of their merged entity. After years of poor seasons, fortunes once again turned as production and markets flourished and the company extended its push into Western Australia.

The linking of its wool operations in the two states set the scene for domination of the trade for the next 40 years.

Even though he was now in his eighties, Barr Smith also found the time to launch Elders Trustee and Executor Limited and then expand the still vital resources interests by forming Elders Metal and Mercantile in Melbourne.

Barr Smith died in 1915 leaving an estate worth more than $250 million in today’s values, much of it endowing charities and Adelaide University.

1920-1930

The Roaring Twenties did not overlook South Australia as the Elders businesses boomed. Profits more than doubled between 1918 and 1928 with Thomas Elder (TE) Barr Smith, son of Robert, as chairman. Heading towards 100 years of operation, 1928 would be a record year for Elders. Rapid expansion of the branch network through SA and WA saw the family and company- owned landholdings continue to increase.

TE Barr Smith’s Chairman’s Address in 1930 echoes down through the years: “There are many troubles in Australia today of the people’s own making. As a community we have been over-borrowing and over-spending … we must live within our national income and everyone must join in the sacrifices.”

At the end of that year Australia, along with most of the world, plunged into the Great Depression.

1930-1940

The Elders centenary in 1939 coincided with the start of World War II when the highly competitive wool-selling business was put into government control.

Elders now had principal offices in Adelaide, Perth, Melbourne, Sydney, Brisbane, Geelong and London.

It had 38 country branches in SA, 25 in WA and two in NSW at Broken Hill and Wentworth; was agent for a dozen shipping companies, including P&O and a ship charterer in its own right. It was the agent for six airlines, establishing Elders Travel and was either Australian or SA agent for more than 80 manufacturers, most of whom made products for the company’s farmer and pastoralist clients.

Elders took over wool firm George Hague and Co in 1937, Victoria’s second auction centre after Melbourne. This allowed Elders to enter the major wool centre of Geelong, making a significant impact on Elders market share in the wool industry.

Its banking business for rural clients was significant, lending more than the equivalent of $400 million in the form of seasonal finance, working capital, machinery purchases, stock and crop liens or property loans.

1940-1950

As the war dragged on, the wool auction system remained closed and the British government acquired the total Australian wool clip. In 1941 it paid today’s equivalent of more than $3 billion, nearly $4 billion the following year and so on. The return to the open auction system in 1946 saw the start of a dramatic five-year run for wool. National wool revenues increased an impressive 29% and 64% respectively in the first two full years of peace.

Wool revenues continued to increase throughout the decade. The Korean War made significant impact on demand for wool as United Nations soldiers fought in winter temperatures 30’C below zero.

Growers – and Elders – rejoiced at getting a pound for a pound of wool and by 1948 Elders controlled 10.1 % of the national clip behind Dalgety and Goldsbrough Mort.

1950-1960

In 1951 the Australian wool clip earned in excess of $15 billion in today’s figures and nearly nine times the wool revenue from the last year of World War II. This was the high tide mark for the Australian wool industry and the national clip has never returned to this level of demand or price. Elders launched a cautious expansion program at the end of the 1940s and despite the wool market profits being slashed in 1952, it sparked 30 years of company takeovers by all segments of agribusiness.

The arrival in Adelaide of Norman Giles from Elders WA was a seminal moment for the company, as he would prove to be its next great leader and guide it to a position of national dominance. Elders had begun its move into Victoria with the acquisition of Commonwealth Wool and De Garis and Sons, lifting the network to 116 branches – 51 more than just before the war.

Two years after Giles’ arrival in Adelaide, he was managing director and already a self- made millionaire from share market speculation he began while still at school.

1960-1970

Now established at the helm, Giles embarked on his strategy of wool market share, which he realised was all about territory. Giles successfully implemented the acquisition strategy he employed in the late 1950s, lifting Elders to the top of the broking pole – a position it has never surrendered.

In 1962 Giles delivered his masterstroke announcing the pending merger of Elder Smith and Goldsbrough Mort with its new corporate headquarters in Adelaide.

By the fifth year of the merger Elder Smith Goldsbrough Mort was leading its nearest rival – Dalgety – by more than 300,000 bales a year. Giles expanded Elders into Gove Alumina and Robe River mining ventures and launched Elders Finance and Investment Co. in 1970.

He also outlined plans for Elders future acquisitions and diversification into new areas of agricultural Australia.

1970-1980

Elders in the 21st century is a major player in the beef production chain but the first steps were taken in 1971 when Giles established a majority investment in Beef City, a high-quality feedlot at Toowoomba in Queensland. Giles also engineered the acquisition of wool brokers and pastoral houses Younghusband and John Sanderson and Co.

Sir Norman Giles retired in 1975 after 54 years with Elders but his successors – Sir Norman Young and Harold Schmidt – kept the momentum rolling and only a year later took over Pitt, Son and Badgery which had been founded in 1879.

This acquisition lifted Elders market share above 34% of the national wool clip or a huge 1.2 million bales. But the growth under the existing management was now slowing and the company was settling down with its wool market dominance, a small but successful finance business and massive cash turnover.

Young later wrote of this period: “We were, perhaps, no longer an attractive target for a takeover bid.” He was wrong.

1980-1990

The 1980s were to become the most explosive, controversial and changing in the 141 years of Elders by whatever name it had been trading. In 1982 it merged with jam maker Henry Jones IXL to become Elders IXL and its surge to the top of Australia’s corporate tree had begun.

The following year, before the ink had dried on the Elders IXL agreement and in one of the most breathtaking swoops in the market, the new-look Elders launched a successful takeover bid for Carlton and United Breweries.

Now a growing global conglomerate, the new business had come a long way from its agricultural genesis in a very short time but never losing sight of its origins, continued to expand its wool market share and acquire more and more rural operations.

But growth was also to prove the straw that would break the camel’s back. In the late 1980s Elders made a bid for BHP in competition with Robert Holmes a Court as the company continued to “Fosterise” the world by purchasing Britain’s Courage Breweries.

However, timing in business is all and when the global economy went into a crash dive in the late ’80s, the over-extended Elders IXL was a victim.

At decade’s end and restructured now as Foster’s – Elders Pastoral became a division of the new business instead of the owner.

1990-2000

Rapid change saw Elders Pastoral renamed Elders Limited as the business was being prepared for sale out of the Foster’s group.

This occurred in the form of an extremely over-subscribed float in 1993, as Elders returned to the basics it knew so well by expanding its rural interests as an agribusiness in its own right. In 1993 that included the acquisition of Australian Agricultural Company, one of the oldest registered business in Australia and one of the largest beef cattle herds in the world.

Two years later Futuris Corporation, a major shareholder in Elders, made a successful offer for the outstanding shares and became the new owner of Elders Limited.

Elders continued to invest in its long-term supply management strategy, acquiring Charlton Feedlot in Victoria in 1996. The following year in a joint venture, it launched Australian Wool Handlers – a major rationalisation of the wool handling and dumping industry that very quickly was responsible for more than 60% of the national clip.

In 1998 it acquired Primac Holdings in Queensland and a share in Killara Feedlot in NSW and then rescued Victoria Producers from collapse in Victoria and established EldersVP in that state.

2000+

Elders burst into the new millennium by taking a controlling position in the German wool processor BWK, the world’s second largest wool tops maker with operations in Europe and Australia. Rebranded BWK Elders, it is now a major force in the Australian wool market as a buyer as well as a processor. In the same year Elders expanded into Tasmania, opening its first office there in 2000.

But the biggest step – arguably one of the biggest in the company’s history – was the launch of Elders Rural Bank. The bank can take deposits from all Australians but its credit services are only available to registered primary producers.

This joint venture has made every one of the company’s 400-plus national branch network a banking location to complement its strong Internet focus. The bank has enjoyed significant growth and has established a positive outlook for the future.

In 2001 Elders successfully floated Australian Agricultural Company while retaining a significant shareholding as part of the company’s commitment to its value-adding marketing programs and supply management strategy. Elder House in Adelaide re-opened after a major refurbishment as the business support office for Elders as well as the head office for Futuris.

In 2004 Elders moved to increase its Tasmanian presence with the launch of Elders Webster. Webster, like AACo, is one of Australia’s oldest companies and runs a diversified merchandise, fruit and vegetables and aquaculture business.

Today it has a number of trading divisions and subsidiaries:
*Australian Agricultural Company
*BWK Elders
*Elders Rural Bank
*Insurance
*Wool
*Livestock
*Real Estate
*Merchandise
*Risk Management
*Grain
*Financial Planning
*Telecommunications (OPEL Networks)

As well as an extensive regional branch network throughout Australia (over 400), it has offices in Germany, Japan, China and Korea.

In 2006, Elders entered into a joint venture with Optus known as OPEL Networks, which was successful in bidding for government funding to build a regional broadband network.

History of Mergers

*1839 - 1853 A.L. Elder & Co:*1853 - 1856 Elder & Co::*1856 - 1863 Elder, Stirling & Co:::*1863 - 1888 Elder Smith & Co::::*1888 - 1963 Elder Smith & Co Ltd::*1903 - 1918 Elders Shenton & Co
*1855 - 1881 R. Goldsbrough & Co - founded by Richard Goldsbrough:*1881 - 1888 R. Goldsbrough & Co Ltd
*1849 - 1888 Mort & Co - founded by Thomas Sutcliffe Mort:*1888 - 1963 Goldsbrough Mort & Co Ltd::*1963 - 1982 Elder Smith Goldsbrough Mort Ltd
*1877 - 1881 Australian Agency and Banking Corporation Ltd
*? - 1965 Western Queensland Pastoral Co Ltd
*1884? - 1939 Pearson Rowe, Smith & Company Pty Ltd
*1888 - 1925 Bagot, Shakes & Lewis Ltd
*1889 - 1920 Younghusband, Row and Company Limited:*1920 - 1971 Younghusband Ltd
*1882 - 1974 Squatting Investment Co Ltd
*1888 - 1976 Pitt, Son & Badgery Ltd
*- 1981 Henry Jones (IXL) Ltd:*1982 - 1990 Elders IXL Ltd

ee also

*Thomas Elder
*Robert Barr Smith

External links

* http://www.elders.com.au - Elders website
* [http://www.findarticles.com/p/articles/mi_m3469/is_n39_v41/ai_8954664 Modern Brewery Age]
* [http://www.fosters.com.au Foster's Group Home Page]
* [http://www.gabr.net.au/biogs/ABE0261b.htm Guide to Australian Business Records Elders IXL]