CLEAR Group, which acts as a middleman between Australia's wheat growers and grain buyers in the new deregulated wheat export market, has welcomed its takeover by NZX, New Zealand's stock exchange operator.
Clear's managing director, Grant Thomas, a former coach of AFL club St Kilda, told BusinessDay that the deal created the capital base the company would have had to build up over time.
"The synergy and like-mindedness in vision was in parallel," he said. "We are a start-up, and NZX a strong brand.
"We felt it was a 'one plus one equals three' scenario. It will get us to where we want to go more efficiently and effectively. NZX was on the lookout for a strong technology provider and we were on the lookout for a global commodities player."
NZX is buying Clear for $6.4 million, but the purchase price will rise if trading volumes grow significantly over the next three years.
Melbourne-based Clear was set up last November to provide online clearing, contract execution and payments services for grain growers after AWB lost its monopoly over bulk wheat exports, and the export market was deregulated.
Mr Thomas said Clear had proven its concept in the first year of operation. "We were too late to market last year, but thought it was important to get the toe in the water and show the people we had a viable option for them," he said. "We did ample trades to test the system and it came up trumps, and we have now revamped it."
More than 1100 grain growers, 100 brokers and 200 buyers and bulk handlers across Australia are registered with the Clear Grain Exchange, which is soon to link with a further 13,000 growers registered with GrainCorp, Australia's largest grain bulk handler.
NZX chief executive Mark Weldon said NZX would use the technology and platform it gained via the Clear Grain Exchange to expand into other farm commodities.
Australia has a $10 billion grain market, and the Grain Exchange is looking to capture part of the $100 million to $150 million that growers pay in commissions each year to sell their products.
"This is a greenfields opportunity," Mr Weldon said. "You can't just buy these spot trading platforms off the shelf, this stuff just doesn't exist. It is really hard to get all the information at one place at one time for one product."
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