sunrice annual report 2002
TRANSCRIPT
A N N U A L R E P O R T
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A N N U A L R E P O R T
Ricegrowers’ Co-operative Limited ABN 55 007 481 156 trading as SunRice
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Our focus, our future
S unRice embraces a vision, goals and values to unite us and drive us forward withconfidence. Our targets, actions, performance and rewards are shaped and measured
by this management expectation.
VisionTo be the world’s favourite rice food company
Visionary goals• We will deliver unbeatable products and services
• We will have leadership that inspires and rewards excellence
• We will have winning business relationships
• We will grow through imagination and audacity
• We will understand our responsibility to achieve financial targets
• We will have simple and effective systems and processes
• We will be responsible corporate citizens
Values• Integrity in all we do
• Passion for the business
• Learning and its rapid conversion to action
• Single minded commitment to achieve our stated goals
2 Our business3 Crop — 2001 SunRice highlights4 Chairman’s report6 Chief Executive Officer’s report
10 Marketing in Australia and New Zealand12 Marketing SunRice to the world14 Our operations16 Our growers18 People and culture20 Our subsidiaries22 CopRice Feeds and Byproducts24 Rice production research26 Environmentally responsible rice28 Our Board30 Our Corporate Management Team31 Our infrastructure32 Corporate governance
Contents
S unRice is the international brand andidentity of Ricegrowers’ Co-operative
Limited — a 53-year old co-operative, whollyowned by more than 2,000 Australian ricegrowermembers. The members sell their annualproduction to SunRice as the Rice MarketingBoard of New South Wales’ authorised buyer, forprocessing and marketing globally under theSunRice and subsidiary brands.
SunRice is one of Australia’s most successful,vertically integrated agribusinesses, producingand marketing an extensive range of table riceand value added rice food products. Over recentyears, we have transformed from a commercialgrain handler into Australia’s largest exporter ofbranded food products.
With annual sales of $820 million, SunRice is amajor contributor to Australia’s export income,and, with our recent strategic move onto amulti-food brand platform, is on track to achieveour vision of being the world’s favourite ricefood company.
SunRice has a strong tradition of aggressivegrowth and value creation. We export 85 per cent of our production, which
represents 4 per cent of world trade and 39 per cent in Japonica varieties, with brandedconsumer packs making up to 70 per cent of our exports. We market Australian rice to more than 72 countries around the globe, andmost successfully in our major markets of Asia Pacific, the Middle East and Europe.
Every year, Ricegrowers’ farmer-shareholdersgrow between 1.2–1.75 million tonnes of paddyrice in an efficient and sustainable farmingsystem. Water use is highly efficient and superiorto that in other countries and for most otherirrigated crops. The Australian rice industry isinternationally competitive and operates withoutany production or export subsidies — unlikemost of its major competitors.
SunRice creates jobs in metropolitan andregional areas and helps secure the viability ofsignificant regional communities. In fact, as anemployer of around 1,200 highly skilled andqualified people, SunRice generates a quarter of the employment opportunities in the MurrayRiverina region and has more than $2.5 billioninvested in the industry — in land, plant and equipment.
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Our businessS
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Below (left to right) •Chief Executive Officer, GaryHelou; Chairman, Gerry Lawson;and Deputy Chairman, MarkRobertson
Good year-end result, despiterecord crop in depressedinternational rice market
Exceptional performance by all subsidiaries: Riviana Foods,CopRice Feeds and Byproducts,and Trukai Industries
Organisational shift to high performance culture
Entry of SunRice to multi-foodcategories — meals and snacks segments
Sales to new world markets —Korea and Taiwan
Continuing investments intechnology and automation:Leeton Rice Flour Mill andautomated packaging at theLeeton and Deniliquin Mills
Safety and quality reach new levels of excellence
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SunRice: our new trading nameSunRice is a readily recognised brand name for our products — now, it is a bold badge for our international company. Ricegrowers’ Co-operative Limited now trades as SunRice.
To be the world’s favourite rice food company,we need to create a single, strong identity in the minds of employees, consumers,customers and suppliers. SunRice, the product,and SunRice, the company, will be a united force to dominate highly competitive markets.
Ricegrowers’ Co-operative Limited will remain the legal entity behind our business,but it will be the SunRice name and identity that we present to the world.
SunRice reporting an award winnerThe Ricegrowers’ Co-operative Limited 2001Annual Report won an Australasian ReportingAward — bronze award. We were awarded thisprestigious professional honour for providingquality coverage against most of the demandingawards criteria, satisfactorily disclosing key
aspects of our business, anddisclosing one major area in anoutstanding manner. We areproud of this achievement andsee it as one more way SunRice is forging ahead as the world’sfavourite rice food company.
Crop — 2001 SunRice highlights
F a c i n g t h e f u t u r e w i t h c o n f i d e n c e
D espite intense global competition andrecord low international rice prices, our
2001 rice price was an excellent performance.The US rice industry’s excessive use of subsidiesand the ongoing water issue were majorimpediments to our industry during the year.However, our path of innovation and operatingexcellence crystallised many strategic initiativesand bolstered our brands and market position athome and abroad. This has been a major sourceof strength and success in an otherwise verydifficult trading environment.
US subsidy use a constant challengeWith the US Government’s recent announcementof increased aid to farmers — another absurdityfrom a government that has increased paymentsby 70 per cent over the last ten years whileextolling the principles of free trade — US rice farmers now receive A$280 a tonne before they sell their riceand irrespective of the pricethey actually receive fortheir rice. In a countrywithout subsidies,Australian rice farmersface reduced returns asour US competitorsunnecessarily depress prices inour major export markets. The absurdity isheightened by the fact that, despite the subsidyabuse, the US is not actually increasing its marketshare. In fact, its share of the Japanese market hasremained exactly the same for the past two years.When coupled with the fact that there is no dutyon rice imported into Australia (30 per cent of allrice consumed) and that Australian consumerspay less for rice than other grocery items, such asbread and milk, the sheer injustice of the subsidy
situation hits home with full force. It also makesthe domestic Australian rice market one of themost contestable in the world.
Fortunately, vesting is a marketingweapon we can use to fight the effectsof the massive subsidies and protectionour competitors enjoy. Vesting hashelped the Australian rice industry toprosper and it gives us greatercertainty in planning our significantinvestments in the Co-operative andregional economies. We must continueto lobby to use vesting until we are onan equal playing field with the rest ofthe world. I recently put the case toretain vesting to senior politicians. I hopethat, as an $820 million food business andAustralia’s largest branded food exporter,SunRice carries some weight in theargument.
Unreliablewater — an ongoingissue
Unfortunately, theongoing water issue marred
another crop year for ourindustry. We cannot have a viable
rice industry without an adequate supply ofaffordable water — and yet, this still eludes us.Barely sufficient water at rice planting timechallenged our growers during the year and flow limitations in the MIA, particularly inColeambally, exacerbated the problem. New water sharing rules, combined with a dry winter, reduced our crop by about a fifth of that planted in 2000.
For Australia generally, the water issue cuts to the core of the wellbeing and sustainability ofrural towns and their people — many of whomrely on irrigation industries for their livelihoods.For SunRice, unreliable water allocation is amajor issue for the industry that affects ourcompetitiveness and challenges our growth. A poorly planned approach to providing a reliablewater supply by government policy makers hascharacterised our Co-operative’s history and,regrettably, continues to cause real concern.
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Chairman’s report
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Matching our talent to our visionOn a much more positive note, SunRice isaggressively expanding its market presence andthe strength and performance of its products. We are on a path to becoming the world’sfavourite rice food company. In this dynamicenvironment, it is crucial that our people havethe right skills and talents to drive our companyforward. There are plans to sharpen our focus on the appropriate skill sets that will serve ourever-expanding business in 2002, and I applaudthese initiatives.
Downsizing the BoardA proud legacy of my predecessor, Terry Hogan,is a clear path to creating a more commerciallyskilled Board of Directors. In 2001, the Boardunanimously decided to downsize from 14 to 10directors in the best interests of its members andthe business. The Board also decided that for it tobe more proactive and to better serve a globallycompetitive company, it needed greaterrepresentation from external experts who bringspecialist knowledge and an outside perspective.All Ricegrowers’ Association branches fullysupport the strategic move to restructure the Board.
The Board has very high expectations of the skills and contributions of its future Board
members, especially its grower members. We are establishing a new nominationscommittee to identify the appropriate peoplewith the appropriate skills who will matchmembers’ expectations and add real value fromthe moment they join. I am confident the newlyrestructured Board will be a great asset to ourprospering company.
Restructuring SunRice and the rice industryAgainst a constantly changing and challenginglandscape, one reason the rice industry hassurvived and prospered is because we continuallylook at what we are doing and how we are doingit. The need for constant review is now greaterthan ever. Restructuring our business andindustry for optimum performance has been on our agenda for some time. Much work hasbeen done to streamline our systems and control our costs for greater efficiency.
We are now faced with options for furtherbusiness and industry refinements, which we willbe considering before presenting to members atour annual general meeting. Of course, memberswill be asked to ratify any changes the Boardproposes and we encourage members’participation as we travel down the path of change.
Sincere appreciationMy six months as Chairman have beeninteresting and challenging. I know we arecompletely focused on ensuring the rice industrynot only survives, but also prospers. I thank TerryHogan for an outstanding term as Chairman —the rice industry owes him a great debt.Fortunately, we will continue to work with Terry in his role as Chairman of the next RiceCo-operative Research Centre. Sincere thanks tomy Deputy Chairman, Mark Robertson, and tothe Board members for their great contribution;to Derrick Docherty, Chairman of the RiceMarketing Board and its members; to MinisterAmery; Federal members Kay Hull and SussanLey; and to our State representatives, AdrianPiccoli and Peter Black for all their continuingsupport. Finally, I extend very special thanks toGary Helou for his outstanding efforts andextraordinary energy, and to all the people of SunRice. A company is only as good as its people.
The year aheadAll current indicators point to the fact that wehave hit the bottom of the market and we nowface a brighter future. We expect to significantlyimprove on our return to growers in the newcrop year. While 2002 will present its own set of challenges and opportunities, I am confidentwe will work together to triumph.
Gerry Lawson
S unRice rallied to deliver a good year-end result despite very difficult trading
conditions, domestically and internationally. A record crop in a depressed international ricemarket meant many pressure points at all stagesof our supply chain — receiving and handlingpaddy, processing, warehousing, and shipping, as well as selling our rice into markets bestdescribed as oversupplied and underpriced. Our year of record milling, marketing, andselling is testimony to the outstanding efforts ofour people and systems working through thechallenges of a very unusual rice year.
Reaching for a high performance cultureFact-based management remained our focus in 2001, but with greater emphasis on a highperformance culture — rising to the challenge of budget commitments and stretching for more.Already, we have put systems and processes inplace to entrench this important value setand make it a way of life.
A high performanceculture will infiltrateour operatingphilosophy over thenext few years. This is
a crucial way of life if we are to succeedin building a global rice food business.
Many challenges await us along thisexciting journey. Investments inpeople, brands, technology, andhigh performance managementsystems will be key drivers as weinstitutionalise and leverage ourdual strategic platform ofoperating excellence andinnovation.
Functional summaryMarketingDomestic marketing had a goodyear despite intensified pressurefrom subsidised rice imports anda rapidly changing domestic retaillandscape. We made gains ingrocery, food service, and food
ingredients and unleashedan avalanche of
new valueadded rice-basedfood products, such
as rice meals and rice snacks.
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I n p u r s u i t o f a h i g h p e r f o r m a n c e c u l t u r e
Chief Executive Officer’s report
This has launched SunRice onto the Australiangrocery map as a multi-fronted food brand withofferings ranging from simple table rice to morecomplex and higher value meal and snackingproducts. This is a crucial step in building ourcredentials as a mainstream food business.
We also combined the field sales forces ofRiviana and SunRice to deliver cost and servicesynergies on this important distribution andmerchandising front. We have high expectationsof our new product launches, despite thedifficulties and impediments we face as wecompete in aggressive markets against offeringsfrom many giant international food players.
Our international marketing team,strategically positioned aroundthe globe, dealt with thechallenges of verydifficult tradingconditions to return agood result on theworld markets in 2001.Issues surrounding regulations,subsidies and access did not detractfrom our success in the major markets of AsiaPacific, the Middle East and Europe. A numberof firsts were achieved during 2001-2002, suchas the first shipment of 22,520 tonnes of brownrice to South Korea — the largest single break-bulk cargo to be shipped from Australia. Late inthe year, the first sale of SunRice Opus varietyshort grain rice was made to the World TradeOrganisation’s new member country, Taiwan. We will be milling and packing rice in the
Riverina under the premium‘Koala’ and hypermarket
‘Kangaroo’ brands forTaiwan, which weanticipate rapidly
emerging as a valuablelong-term market.
The coming 2002-2003 period willbring more challenges, but more importantly,opportunities to build on our heritage of qualityand service in key markets.
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Financial years
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$729
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Left • SunRice relies on results-focused people: Flour Millers Dion Davis and Tom Main contributing to rice flour production at the new Leeton Rice Flour Mill
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OperationsLast year’s record crop resulted in a 40 per centlift in product handling and processing. TheOperations Group absorbed this increased loadon our infrastructure by displaying managerialflexibility and the application of the significantbenefits of our ongoing intensive capitalinvestment program to deliver lifts inproductivity and efficiency.
Our intensive capital investment program —underway in 2001 and ongoing over the nexttwo years — is focused on capacity upgrades and automation in a deliberate strategy to putSunRice ahead of the world in terms of cost,quality, safety and innovation. We can claim our place in the world as one of the lowest
cost producers.
The big investments in the Leeton Rice FlourMill and the highly automated packagingfacilities in Leeton and Deniliquin will ensurecutting edge quality, cost leadership, andoperational flexibility in a more complex and demanding world market.
SunRice returned good results in quality andsafety in 2001. We continued to increase ourquality standards and decrease customercomplaints. In occupational health and safety, we made outstanding achievements against ourperformance indicators and decreased work-related injuries. Our focus will not waver from this important objective.
FinanceThe year was marked by our continuing effortsto inject Finance into the business as a keyenabling service for better decision making and a more commercial way of life. Daily reportstracking sales and operations key performanceindicators, as well as forecasting methodologies,have been key outputs of our Finance team.Information Services led the important taskforceto launch Material Resource Planning II intoOperations, which finally integrates our Salesand Operations Planning with mills andprocurement — a long overdue operationalneed. The Finance and Information Servicesdepartments will continue to be criticalorganisational performance enablers.
Human resourcesAs a result-focused organisation, we rely onpeople with competencies, passion and ambitionto convert products and services to the highestdelivery standards. Our emphasis on aperformance-based culture is reflected in themany processes and forums put in place over thepast 12 months, such as the introduction of afirmer assessment of on-the-job performance,competency-based pay structures, an incentivescheme to extract higher performance, and bettertraining. The 2001 CEO Awards continued toshowcase our best employees and theircontributions to the organisation.
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Consolidated, Co-operative and export revenue
Co-operative
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Subsidiary businessRiviana FoodsRiviana achieved an exceptional result withdramatic growth in its top and bottom lines.This is the fifth consecutive year the company
has posted record revenue and earnings —derived from its winning combination
of business relationships,entrepreneurship, customerservice, and a suite of successful brands and products in high
growth categories. Rivianaremains one of Australia’s
leading food importers.
CopRice Feeds and ByproductsCopRice performed brilliantly in the up-beatstockfeed business environment of 2001. The successful buyout of our joint venturebusiness partner in the Ausfeed Feedmill at Cobden was a win for the organisation and asignificant contributor to the strong performanceof CopRice in 2001. CopRice is now entering a period of exciting growth, in both domesticand export, in extruded speciality products for companion animals segments.
Trukai IndustriesTrukai employed several strategic marketinginitiatives in its continuing battle against adeclining local currency, successfully maintainingvolumes and meeting consumer needs. Thecompany’s multi-brand approach to dealing with falling consumer affordability helped stemthe purchasing declines witnessed by many
food categories in Papua New Guinea. Branding,product extensions and distribution remain thecore growth drivers for Trukai in an uncertainPapua New Guinea business environment.
FutureDuring 2001, SunRice made solid progress alongthe path to becoming the world’s favourite ricefood company. This was a great business year,despite many difficulties, and laid a firmfoundation for moving into the future withconfidence. We can look past the unsettlingconditions of 2001 to better trading andbusiness conditions in 2002 and beyond.
I sincerely thank our Chairman, Gerry Lawson,and the Board of Directors for their leadershipand support. I extend great gratitude to all ouremployees who displayed strength anddetermination in the face of unprecedentedbusiness challenges.
I look forward to working with all ourstakeholders in shaping SunRice into the world’s favourite rice food company.
Gary Helou
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■ Major launch into value added products
■ Changing retail landscape
■ Brands tested by subsidised imports
■ Major integrated support campaign
Intense planning and development culminatedin the launch of 42 value added rice-basedconsumer products in 2001, pushing SunRicepast the table rice category to compete withsome of the world’s largest branded foodmarketers. This is a major and crucial step forour business and will be backed by continualproduct improvement to meet increasingcustomer and consumer demands.
Our products encountered a changingretail landscape this year. Globaldiscounter ALDI arrived inAustralia with its limited rangeoperation offering only onerice product: one kilogramwhite long grain. Dairy FarmInternational exited Australia,causing the sell-down ofFranklins stores, whichstrengthened Coles andWoolworths and various independentgroups. Strong Western Australianwholesaler, FAL, gained a presence on theeastern seaboard, while South African Pick ‘n’Pay returned to Australia, purchasing a numberof established New South Wales stores.
The onslaught of heavily subsidised importedrice was another test for our brands and pricescontinued to fall despite the depreciatedAustralian dollar. We were able to maintain apremium in this testing time only through thequality and reliability of our rice and the equitybuilt up over many years of established trust.Our determination to be the lowest costproducer of the highest quality product must prevail.
Rice sculptures will return as the centrepiece ofour advertising campaign in 2002, as we strive tore-ignite growth in per capita rice consumptionfrom its plateau of recent years. We will contest
the ‘wall of familiarity’ consumers have forrice, bringing rice top of mind when
wondering, What’s for dinnertonight? Television advertising
comprising several core riceexecutions and key valueadded products will meshwith print advertising, radioadvertising in capital cities,
targeted product sampling,trade promotions and public
relations in a massive integratedprogram.
Value added rice-based foods, such as SunRiceMeal Kits and Sensations Rice Chips and
Tortillas are our most recent initiative and entryof rice into the growing convenience meals and
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Marketing in Australia and New Zealand
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SunRice Sensations Rice Chips and Tortillas made a sensational entry into the conveniencesnacking category in 2001 — an exciting example of our value added rice-based consumerproducts that now compete with the world’s big name brands.
Australia is munching on our Sensations range for its flavours and features: a guilt freesnack, full of crunch, baked not fried, and gluten free. The chips are 97 per cent fat freeand the tortillas are 95 per cent fat free, all wrapped up with the goodness of Australianrice. It’s no wonder they’re a sensation!
Causing a sensation in convenience snacking
snacking markets. Our team is constantlymonitoring world markets in rice-based foods tokeep SunRice at the cutting edge of productdevelopment. We remain committed to drivingprofitable and sustainable category growth.
We have restructured our sales and marketingteam for the most professional and cost-effectivemarketplace interaction. Regular interface withoperations via Sales and Operational Planningcontinues to improve product freshness andavailability. Finetuning our packaging graphics to comply with the Australian and New ZealandFood Authority’s new food standards andcontinuing our stance against the use ofgenetically modified rice remain priorities. Above • Product merchandising at Coles Knox City, Melbourne. Cost savings and
enhanced customer service resulted from the amalgamation of the Riviana andSunRice domestic sales forces in 2001.
■ Record crop a marketing challenge
■ First sales into a host of new markets
■ Premiums maintained in all key markets
Our international marketing team rose to thechallenge to sell additional volumes from arecord crop into new markets at the best possibleprice, while maintaining existing markets, sharesand premiums in 2001.
Conquering the challenge brought some firsts for our business. Our first shipment of22,520 tonnes of brown rice to South Korea was not only the largest single break-bulkcargo shipped from Australia, but excitingevidence of Korea permitting access forforeign rice under its agreement for freer international trade in agriculture.We will pursue South Korea as anongoing market.
Other first sales were made to a host of newmarkets, including Tanzania, Haiti and PuertoRico. We applied our expertise in shipping andbulk cargo handling, developed over many yearsserving the Japanese market, to negotiate thesenew market entries.
Late in the year, we made the first sale ofSunRice Opus variety short grain rice to theWorld Trade Organisation’s new membercountry, Taiwan. We will be milling and packingrice in the Riverina under the premium ‘Koala’
and hypermarket ‘Kangaroo’ brands forTaiwan, which we anticipate rapidly
emerging as a valuable long-termmarket.
Our successful moves into new markets did not distract our
attention from our key markets ofthe Middle East, Pacific, North Asia,
and South East Asia. We maintainedpremiums over our competitors in each of theselocations. The presence of our talented teams in Papua New Guinea, the Solomon Islands,Singapore, Tokyo, Dubai and Sydney were the force behind this outstanding result. Our strategically located offices provide active marketing intelligence for our businessand direct access to SunRice personnel for our customers.
Building on our heritage of quality andoutstanding service in key markets andresearching new opportunities and avenues for growth across the globe will continue to be our twin challenges as we enter 2002-2003.
12SunRice office locationsSunRice worldwide markets
Marketing SunRice to the world
Top left • Servicing ourimportant Japanese market —one of the key export markets in which SunRice maintainspremiums over competitors.SunRice Business Manager —Asia Pacific, Milton Bazley, withJapanese buyers from ITOCHU:Assistant Manager, ShinaeMoriki, and Senior Manager,Tadashi Nakamura
Middle left • New andinnovative SunRice value added rice-based consumerproducts on supermarketshelves in Singapore. Our salesteam in Singapore is one of six strategically located aroundthe globe for active marketintelligence and directconsumer interaction.
Below • Internationalproducts, international flavours:SunRice Opus rice is the mainingredient of Sushi Paella beingserved at the AustralianEmbassy in Japan.
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Top right • Consumers in Dubai — and in more than 72 export marketsacross the globe — select SunRice products in specially translatedpackaging from supermarket shelves.
Middle right • SunRice rice ready for export at the Deniliquin Mill.SunRice exports 85 per cent of production and is a major contributor toAustralia’s export income.
Right • SunRice Sensations Rice Chips and Tortillas are causing aglobal sensation. Malaysians enjoy these new rice-based products forthe same reasons as everyone else: they’re a low-fat, high-flavour snackmade from the goodness of Australian rice.
■ Record harvest and processing year
■ Significant cost savings in processing and supply
■ New rice flour mill boosting competitive capabilities
■ Dramatic improvement in safety performance
We have achieved a 20 per cent reduction in thecost of processing a tonne of rice paddy over thepast two years — a direct result of industry-widecapacity upgrades generating higher throughputsat reduced operational costs. With our sightsfirmly set on boosting efficiency and achievingworld-class standards in SunRice facilities, wewill continue cost saving by commissioning two new packing plants at the Deniliquin andLeeton Mills in 2002.
Significant cost reduction has also been achievedin goods delivery to domestic and internationalmarkets. Our Supply Chain Group is pursuingother opportunities, identified in a majorlogistics review, to achieve excellence in customerservice and supply chain costs.
A new dedicated rice flour mill came online atthe Leeton Mill in February 2002. A state-of-the-art facility, the rice flour mill has improvedour operational performance and given us thecompetitive platform from which to drive riceflour use in value added foods.
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D e l i v e r i n g u n b e a t a b l e p r o d u c t s a n d s e r v i c e s
We have achieved a dramatic improvement insafety performance over the past two years andwe continue to pursue a zero injury target. Our 27 per cent reduction in the Lost TimeInjury Frequency Rate (LTIFR) recorded thisyear follows the 42 per cent reduction of 2000.Some positive industry-wide initiatives areproviding structures, policies and procedures
Above • Speciality rice foodsare a SunRice speciality: 2001CEO Awards recipient, CharlesAtkins, overseeing production of3-Minute Rice at the SpecialityRice Plant in Leeton
Left • Safety and qualityreached new levels of excellencein 2001: Flour Miller Dion Davischecks the flour sieves at theLeeton Rice Flour Mill
Below • New automatedpackaging equipment installedat the Deniliquin Mill — one outcome of our intensivecapital investment program to deliver lifts in productivity and efficiency
Our operations
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for effective safety management and we areprogressively implementing a behaviour-basedsafety program to augment existing safetymanagement systems.
We have made outstanding progressimplementing quality managementsystems in all operations. All ourfacilities maintain HACCP accreditationand a focus on Good ManufacturingPractice (GMP) — an important step in thepursuit of world-class facilities for our business.We upgraded our colour sorting capability at the Echuca and Coleambally Mills, furtherenhancing product quality for competing in world markets.
SunRice maintains a strong commitment toenvironmental responsibility in operations.
We have developed an environmentalmanagement system, with
environmental reporting processes,for all sites. We have conductedenergy and waste audits at sitesand energy reduction guidelines
are being implemented across the industry. We continue to use
advanced control technology to regulateenergy for drying paddy, and we are investigatingprojects using rice hulls for green energyproduction.
The new Leeton Rice Flour Mill is adding real value to our ability tovalue add in today’s competitive markets. Rice flour is a core ingredientin our exciting range of new rice-based consumer products.
The Leeton Rice Flour Mill is the largest rice flour mill in Australia andone of the largest in the world. State-of-the-art milling and packingequipment and computer control systems give us the capability to takein raw material and turn out finished packed product — all under one
roof. Featuring dual rollermills capable of grinding all sizes and varieties of rice grains and high capacitycolour sorters to optimum quality specifications, the new mill meets the most stringent sanitation requirementsfor the food industry and HACCP certification. A fully automated packing system demands less staff input,making this mill a cost-effective and valuable addition to the SunRice stable of world-class infrastructure.
Leeton Rice Flour Mill: adding value to value adding
Above • Another productivityand efficiency initiative: thenew packaging plant at theLeeton Mill currently underconstruction
Middle • Saving power andthe environment: Electrician,Simon Stubbings, installingnew switch equipment toreduce power use at theDeniliquin Mill
■ Limited water availability restricts crop size
■ Climatic conditions challenge all growers
■ New medium grain rice variety, Paragon,released to replace defunct Namaga variety
A relatively low water allocation at rice plantingtime was the first of two challenges growers facedin 2001. New water sharing rules that increasethe share of water for in-stream use and a drierthan average winter were the catalysts. The149,500 hectares planted was 19 per cent lessthan the record 184,400 hectares planted in 2000.
After planting, water allocations increasedsignificantly in the Murray Valley, but onlymarginally in the Murrumbidgee Valley. This led to a critical shortage of water during the peak demand period of January andFebruary, particularly in the Coleambally region.Many growers de-watered large portions of their crop, which they later salvaged bypurchasing scarce and costly temporary transferwater. The crisis took its economic and personaltoll on many farm families in the region.
Below average growing conditions for most of the season was the second challenge. Cooler temperatures during the vegetativedevelopment phase reduced plant biomass and made weed control difficult. Cold night
temperatures in the early part of February causedsome sterility damage in a portion of the crop atthe pollen development stage of growth.
It was heartening for most growers, whoexpected yields to be significantly below average,to find a reasonably good yield at harvest time.The use of best management practices is clearly a powerful weapon against seasonal challenges.Total production of 1,241,711 tonnes wasachieved at an average yield over all varieties ofapproximately 8.4 tonnes per hectare. Despitelower production compared to the previous crop,crop receival was not trouble-free. Industrialaction disrupted harvest for five days and higherthan planned deliveries caused slow turnaroundat some depots.
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E n h a n c i n g g r ow e r p e r f o r m a n c e t h r o u g h i n f o r m a t i o n a n d c r o p p r o d u c t i o n s e r v i c e s
Left • Applying leadingtechnology to rice production:rice harvesting using a Yanmarharvester from Japan, speciallyimported for RRAPL to harvestsmall research rice plots
Below • The sun rises on anew day of rice farming: a ricecrop located between Tocumwaland Finley in New South Wales
Above right • Silos of pure riceseed at Finley, New South Wales
Our growers
2001-2002 highlights
• High stocks of subsidised Asian ricesignificantly dampened market demand forlong grain varieties. Rapid communication of this market signal to growers and seedissue adjustments drastically reducedproduction of our long grain varieties,Kyeema and Doongara.
• Grower Services dealt with approximately6,000 member inquiries beyond normalbusiness transactions. We implemented a call register to promptly deal with inquiriesand any complaints.
• We conducted special member meetings at regional locations in March. These comprehensive briefings were well attended.
• Grower Services/Communications Groupassumed operational responsibility for
the Leeton and Deniliquin SunRiceVisitors’ Centres, following anextensive review. We will moreclosely align the Centres with the Ricegrowers’ Association
of Australia Inc industrypromotion activities.
• Fertiliser and herbicide merchandisingactivities significantly reduced input costs forgrowers. Competitive pricing negotiated bySunRice set benchmarks for other suppliers.
• We significantly improved seed issueinfrastructure at Finley, as part of a three-yearprogram to bring the SunRice Pure SeedScheme up to world’s best practice standard.
• New South Wales Premier, the HonourableBob Carr, launched a major project bySunRice and the Irrigated AgribusinessTaskforce. The Murrumbidgee: assessing thehealth of a working river project irrefutablyconfirmed that the river must be managed as a working river to support a range ofactivities, including irrigation.
• Growers gained a secure Grower Services web page on the SunRice corporate web site.
This password-protected page provides mostof the information sent to growers in hardcopy form.
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New medium grain rice variety, Paragon, is by its name’s definition, thestandard by which others are measured. Released at the Rice Field Day inMarch, Paragon was bred by the New South Wales Agriculture plant breedingteam at Yanco Agricultural Institute using conventional plant breeding methods.
The initial cross to produce Paragon was made in 1992. Single panicle selections and unreplicated andreplicated trials at Leeton and Deniliquin Research Stations and district sites followed for 10 years. Now in 2002, SunRice and growers welcome Paragon for its important attributes: ■ a higher field yield (3–5 per cent above Amaroo); ■ quicker maturity, which means more tonnes produced per megalitre of water used. In average seasons,
Paragon matures around seven days quicker than Amaroo; in cooler seasons about the same as Amaroo;■ a slightly larger grain size than Amaroo (0.2 mm longer); ■ slightly less chalk than Amaroo (fewer opaque areas in the grain); and■ similar cooking qualities to Amaroo.
Paragon is being multiplied in the SunRice Pure Seed Scheme and a limited area will be planted in 2002.
Introducing Paragon
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A c h i ev i n g o u r v i s i o n t o g e t h e r
■ Performance management system reviewed
■ Competency-based pay structure introduced
■ Achievement rewarded
■ Training program strengthened
SunRice actively encourages a results-focusedorganisation. Fostering and sustaining a cultureof high performance to achieve our vision is a core priority.
For a more consistent and structured approachto managing our team, we tightened the way we review and improve performance this year.Firmer assessment of individual on-the-jobperformance and a new learning anddevelopment tool to identify and plan individualimprovement opportunities were communicatedto salaried employees in briefing sessions acrossthe business. We aim to encourage our people to assume greater personal accountability forcontributing to the achievement of higherperformance. We will build on our performancemanagement initiatives in 2002.
We reached an important milestone for ourbusiness when we finalised our WorkplaceImprovement Agreement (WIA) in early May. As well as allowing for an annual wage increaseof 3.5 per cent for two years from 1 October2001, the WIA ushers in a new era of employeeremuneration for SunRice. From May 2002, new employees will be paid solely under acompetency-based structure, as we phase out ourprevious pay structure based on length of service.
We introduced new and improved traininginitiatives in 2001. A more structured programfor employees working in paddy and twoinitiatives to improve our employees’ generaleducation levels — the recruitment of universitygraduates under our graduate placement strategyand a new external studies policy to encouragefurther study — were positive outcomes.
The CEO Awards that were so successfullyintroduced in 2000 continued as an importanttool for acknowledging and rewardingperformance across the organisation. The Awardsreceive strong support for formally recognisingoutstanding achievement and for producing rolemodels for others to emulate. This programreinforces our results-focused leadership approach.
SunRice salutes the winners of the
2001 CEO Awards
Anita CustanceWinner, Sydney Office and SurroundsOverall winner
Anita joined SunRice in May 2000 as areceptionist in the Sydney Office. She waspromptly promoted to the role of CustomerService Coordinator in the SunRice Customer Service Centre.
As the SunRice contact person for majorcustomer, Kellogg, Anita contributedsignificantly to SunRice recently beingawarded ‘A’ Class Supplier status by the food giant. She has received high praise from Kellogg and other customers for heroutstanding customer service skills.
Leeton OfficeSite Winner: Mark Miller Mark has a long history of delivering projectoutcomes and developing people. He is a pivotalplayer in all major projects. Mark’s career withSunRice spans eight years: today, he is theInformation Services Manager. Mark is building a workplace culturefocused on performance,results and employee rewardand recognition.
1 • SunRice CEO, Gary Helou, with the winner of the 2001 CEO Awards, Anita Custance2 • General Manager — Grower Services/Communication, Mike Hedditch, with Information Services
Manager, Mark Miller 3 • Company Secretary, Rod Fox, with Team Leader, Charles Atkins, and Speciality Rice Food Group
Operations Manager, Bob Jones4 • Quality Control Officer at CopRice Tongala, Damian Brennan, with General Manager — CopRice Feeds
and Byproducts, Keith Hutton, and Feedmill Manager Tongala, Bob Cooper
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People and culture
Specialty Rice Food GroupSite Winner: Charles Atkins
Charlie joined SunRice in February 1998 as a packerman at Leeton Mill and transferred to the Specialty Rice Food Group in
February 2001. He has quicklybecome a team leader, operatingfive packaging lines and makingvaluable quality, safety andefficiency improvements. His simple yet brilliant solution to a packaging problem hasimproved line efficiency by a massive 25 per cent.
CopRiceSite Winner: Damian Brennan
Joining CopRice Tongala in 1995 as an assistantmiller, Damian has progressed to the position ofQuality Control Officer after leading a team tosuccessfully implement quality measures underHACCP and ISOcertification six weeksahead of schedule. His priority now is tomaintain the qualitystandards, which he is doing with
unparalleledenthusiasm and drive.
Leeton MillSite Winner: Paul Maytom
Paul joined SunRice in 1967 in the pollard area and has progressed to his present role as Milling Manager. Paul has contributed
significantly to SunRice’ssuccessful relationship with Kellogg and is alsorecognised for working withLeeton millers to achieverecord throughput tonnagesand other cost savinginitiatives.
ColeamballyMillSite Winner:Peter Jones
Peter is theProduction
Manager, Milling and Packing at theColeambally Mill. Together with theColeambally Site Manager, Peter designed a simple system to allow bulk brown rice to be taken direct from the mill to bulk trucks,reducing the number of people necessary for the task from seven to one, and drastically reducing weekend overtime requirements.
Deniliquin MillSite Winner:Ian MacKnight A fitter with theDeniliquin MillMaintenance team, Ian has designed an
attachmentfor bobcats that prevents back injury— a high risk to fitters working withmotors in aeration fans. SunRiceencourages employees to takeownership of site safety problems. Ian has taken up this challenge and is an outstanding example of success.
Echuca MillSite Winners: Max Blake and
Ross BlackbournMax Blake and RossBlackbourn arefumigators at the EchucaMill. Faced with newoccupational health and safety policiesrestricting the height atwhich employees canwork without a fallarrest system, this dynamic duo devised a moreefficient and cost-effective fumigation practicethat complies with safety requirements at areduced operating cost.
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5 • Production Manager Milling, Paul Maytom, with General Manager — Operations, Graham Harvey6 • Mill Manager Coleambally, Mark Townsend, and Production Manager Milling, Peter Jones, with General Manager — People and Culture, Kerry Burke7 • Information Services Manager, Mark Miller; Fitter, Ian MacKnight, and Manufacturing Manager Southern, Stephen Hartshorn8 • National Quality Manager, Tim Norris, with Fumigators, Ross Blackbourn and Max Blake
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Trukai IndustriesChallenge, innovation and positive achievementcharacterised 2001 for Trukai Industries.
The continuing decline of the Kina influencedthe market significantly, reducing the purchasingpower of Trukai Industries and its customers anddampening consumer demand. The companycountered this challenge with strategic marketingactivities, including the expansion andpromotion of the budget-priced and locallydominant Roots Rice range, using bonus packsand other initiatives that met consumer needsand helped maintain volumes. New products,including flavour sachet Roots Rice, weredeveloped, while the sales and marketing teamremained very active and focused on buildingstrong partnerships with distributors.
Trukai Industries was the first major foodmanufacturer to return to the Bougainvillemarket on a direct shipment basis — a significant and bold economic and politicalinitiative, following a decade of civil disturbance.The company plans to increase shipping volumes as this sales centre fills the supply pipeline.
Honouring its commitment to the Papua NewGuinea Government to promote agriculture,Trukai Industries initiated live cattle sales toSouth East Asia. Shipments of cattle fromsmallholder farmers and Trukai Farms’ own herd were delivered to the Philippines, providingan important alternate market for times whenthe domestic market is oversupplied.
Continued support from its customers,innovation, and an ongoing commitment from employees helped Trukai Industriesmaintain its strong position.
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Our subsidiariesPapua New Guinea’s largest andmost successful rice marketer
Riviana FoodsFor the fifth consecutive year, Riviana Foodsposted record revenue and earnings — an outstanding performance stemming fromwinning business relationships with majorcustomers and suppliers, consistently high levelsof service and communication, and an extensiverange of food products that add value and are convenient to use. Riviana Foods continuedits commitment to product innovation, brandpositioning, proactive pricing policies and margin maximisation.
An extensive print and outdoor media campaignon the Always Fresh brand in late 2001 increasedconsumer awareness and boosted Riviana’soverall market leadership in the pickled vegetablecategory. Riviana Foods’ ongoing commitmentto brand consolidation was demonstrated in therevitalisation of the Admiral range of canned seafood, vegetables and fruits, with new contemporary packagingportraying clearer product descriptionsand appetising serving suggestions.
With cost containment the objective, Riviana successfully negotiated revisedshipping contracts and consolidatedproduct offshore for direct shipment to state-based warehouses, eliminating the on-costof interstate freight. Riviana achieved further cost reductions by sourcing alternative raw materials and finished goods. Riviana’s pilot trial of self-regulation of imports with the AustralianQuarantine and Inspection Service has thepotential to eliminate costly inspections ofimported product, while ensuring strict compliance with quarantine regulations.
The processing facility at Noble Park receivedHACCP accreditation. Riviana also acquired theprocessing plant and equipment from a New
Zealand bottling plant to improveproduct quality, reduce costs and
provide greater flexibility inongoing new productdevelopment.
A significant strategic step was
to amalgamate Riviana’s domesticfield sales force with that of SunRice.
This had many benefits: considerable costsavings and increased resources enabling greatercustomer service to retailers, a dedicated foodservice sales force, and the opportunity to launchinto the specialised food service market in 2002with an expanded product range.
These exciting initiatives coupled with moremedia support for Always Fresh and the strength of its people will maintain RivianaFoods’ aggressive growth pattern in revenue
and earnings.
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One of Australia’s leading food importers
CopRice Feeds and Byproducts recorded anoutstanding year, making solid progress towardsits core objective to maximise member returns by adding value to rice milling byproducts.
To strengthen growth prospects as suppliers tothe Victorian dairy industry, SunRice gained fullownership of the Ausfeed Feedmill at Cobden,successfully buying out our joint venture partner.This feedmill, and those at Leeton and Tongala,worked to full capacity during the year,exceeding budgeted targets for production,turnover, gross margin, net profit and return on investment.
A strong market for meat and dairy products,coupled with dry conditions and relatively highfeed grain prices, drove strong demand for ricepollard and good selling prices in a year ofrecord production. High levels of live sheepexports enhanced the situation and took demandfor ground rice hulls to record levels.
Sales of extruded speciality products forcompanion animals increased in moresophisticated markets in Australia and overseas,bolstering capacity at the Leeton Speciality
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A leading manufacturer, marketer and distributorof stockfeed, companion animal foods, and relatedproducts from rice milling byproducts
Far left • Value adding for pethealth: CopRice released HealthyPet Rice for Dogs in 2001, ahighly nutritious, highlydigestable pet food made fromnatural brown rice and rice bran.
Left • Delivering grain at theCopRice Cobden Feedmill, whichcame under full ownership ofSunRice in 2001 and was one ofCopRice’s three stockfeed millsto exceed all production andfinancial targets for the year
Below • The dawn of a newday and an exciting new era ofdomestic and internationalmarket growth for CopRiceextruded speciality products for companion animals
CopRice Feeds and Byproducts
Products Plant and encouraging the launch of anew company image and logo to appear on allCopRice packaging and delivery vehicles.
CopRice achieved a major landmark for astockfeed manufacturer by giving
priority to quality managementsystems and safety at work.Tongala and Cobden Feedmillsreceived registration certificatesfor compliance with AS/NZS ISO
9001:2000 quality systemsmanagement requirements, HACCP
(Hazard Analysis Critical Control Points)and GMP (Good Manufacturing Practices) from Quality Assurance Services of Australia.
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Above • Storage silos: part of the CopRiceinfrastructure that helps this market leader maximisemember returns by addingvalue to rice millingbyproducts
Far right • Two of the peoplebehind the products: PaulGrobes and Fiona Hanks in the control room at theCopRice Cobden Feedmill
Right • ‘Taste testing’CopRice stockfeed: Farmer, Wim Kampsheer, feedsCopRice pellets to his dairy cow
S unRice has a strong commitment tocontinuously improving the Australian rice
industry and our farming practices throughquality research and development. Our vision to be the world’s favourite rice food companyrests on research outcomes that push the outerlimits of our knowledge and capabilities.
The ‘Old Coree’ rice farm near Jerilderie playsan important role in rice production researchand development of best management practices.Rice Research Australia Pty Ltd (RRAPL) — a wholly owned SunRice subsidiary — occupiesthe 1,830 hectare ‘Old Coree’ site under anagreement between the McCaughey Institute,RRAPL and SunRice.
RRAPL: research for ricegrowersRRAPL is driven by its quest to provide apremier research facility for the benefit ofricegrowers. From early beginnings as a companywhose small research and development projectswere largely self-funded by commercialoperations, RRAPL today is the central player in the development and control of newrice varieties for the New South Wales riceindustry.
RRAPL evaluates the most promising newvarieties for the rice breeding program and
produces the breeders seed of these varieties andother released varieties. This breeders seed is thefoundation of the SunRice Pure Seed Scheme.To service this important role, RRAPL isincreasing and improving its seed production,harvesting, storage, cleaning and gradingfacilities.
RRAPL researchSeed testing and build-up of advanced breeding linesNew South Wales Agriculture’s rice breedingprogram at Yanco Agricultural Institute, CSIROand many other collaborators use ‘Old Coree’ totest and build up seed for advanced rice breedinglines. The site has prime growing conditions and enables rapid build-up of breeders andfoundation seed. The New South WalesAgriculture team is using ‘Old Coree’ to run rice nutritional trials, chemical demonstrationsites, quality evaluation trials and other extensionactivities, which require varying amounts ofRRAPL resources.
Rural Industries Research andDevelopment Corporation (RIRDC) The RIRDC runs a range of research programswith RRAPL.
• Alternative methods and cultural practicesfor establishing seed and nutritional trials:Researchers are developing a plot seeder thatprecisely places seed and fertiliser for betterrice crop establishment. The objectives are totrial sod seeding (direct drill) and combineseeding techniques with many new sowingattachments on the market.
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R e s e a r c h a n d d ev e l o p m e n t f o r t h e b e n e f i t o f r i c e g r ow e r s
Rice production research
• Improved seed storage and segregation foradvanced breeding lines: Researchers arestriving to achieve three objectives with this study: (1) to reduce the risk of geneticchanges occurring in long-term cultivars (by storing an adequate quantity of nucleusseed, used each year for the productionof breeders seed); (2) to storesignificant quantities of seed ofexisting and new cultivars withunique grain quality attributes forrapid seed production when newmarkets arise; and (3) to reduce the riskof cross-contamination between cultivarsduring the early phases of the Pure SeedScheme by establishing a facility that iscompletely separate from any paddy receivalsand that features world best practice design,technology and quality control.
‘Old Coree’ is presently the storehouse of 65 ricevarieties. RRAPL has recently expanded the rice seed multiplication areas at ‘Old Coree’ to allow selected rice cultivars to progress faster,which has prompted the need to improveharvest, segregation, drying and storage facilities.
RRAPL also provides crucial extension services,such as field days, demonstration days andworkshops, which encourage grower awarenessand involvement in RRAPL’s research anddevelopment. RRAPL encourages industry visits and is also becoming more involved with promoting the production and marketingof quality rice.
Rice research: the road aheadThe SunRice Pure Seed Scheme and the
early generation breeding programprovide SunRice with enhanced
product quality and variety. In future, RRAPL will expand its role beyond this scheme.
Herbicide development,nutritional recommendations,
water use efficiency gains, and ricestubble management will be additional activities,while the role RRAPL plays as a visitor showcaseand as a provider of extension services will alsoevolve. A greater role in the commercialisation of rice varieties and in shaping the links between, and the implications of, rice varieties in the value chain of growing, milling, andmarketing will also redirect RRAPL’s future as a central force in the rice industry.
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Left • Scientists researchrice flour for SunRice at theBread Research Institute ofAustralia at Pymble, Sydney
Far left • RIRDC TechnicalOfficer, Andrew Robson, andstudent, Rick Mitchell, monitorweather data in the field
Above • The SunRicecommitment to qualityresearch and developmentcontinuously improves theAustralian industry and ricefarming practices.
Above right • The LeetonQuality Appraisal Centre’sJulie Deeves checks a riceplant matter sample for NearInfrared Analysis, which helpsdetermine how much topdressing rice farmers need to apply.
Centre • RRAPL Manager,Russell Ford, in the eucalyptusplantation on ‘Old Coree’
SunRice aims to be synonymous withsustainable rice production. Our commitment
to growing and producing environmentallyresponsible rice and rice products extends frompaddy to packaging, with the objective ofreducing the rice industry’s effects on theenvironment. We stand by our assurance to consumers of Australian rice that our product has been produced with careful environmental consideration and we strengthen this assurance byconstantly researching new environmentalmanagement systems and practices. Farming,milling and processing our rice comes under close scrutiny for opportunities to lessen theenvironmental impact and to live up to our core value to be responsible corporate citizens.
SunRice is proud to be part of an industry that is producing ‘firsts’ in environmentalresponsibility. A range of programs andinitiatives, developed by and for the riceindustry, are leading the way in the managementand protection of natural resources and ingreenhouse gas abatement.
Rice environment policyDuring 2001, the rice environment policy —developed over recent years by SunRice, theRicegrowers’ Association of Australia Inc, and
the Co-operative Research Centre for SustainableRice Production — became a reality on our
shareholders’ rice farms and in our mills. The policy is our pathway to a healthyenvironment, with productive soils, clean air and diverse and robust natural habitats, riversand watersheds. It recognises our drive to deliver
safe and high quality rice and riceproducts and to protect the natural
resources we use in the process.
Five environmental issues formthe focus of the policy: salinity,
chemical use, greenhouse gasemissions, energy consumption and
waste. Underpinning the policy is a setof flagship programs, designed for on-groundaction in addressing these issues: Restoring thebalance with biodiversity, The greenhouse challenge,Environmental champions, Healthy rivers andlandscapes, and Industry performance andinnovation. Positive outcomes are alreadyemerging from many of these programs.
Restoring the balance with biodiversityResearchers from the University of Canberra are identifying animal life on rice farms, with the support of the Rural Industries Research and Development Corporation (RIRDC), the Ricegrowers’ Association of Australia Inc, the Co-operative Research Centre for Sustainable
Rice Production, and the Co-operative ResearchCentre for Freshwater Ecology. In 2001, the first
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Above • Salt Bush: a nativevegetation managed by the riceindustry to protect biodiversityand wildlife habitat in the ricegrowing system
Below • Jerry Wilcox ofRiverina Helicopters sprayingrice near Griffith, New SouthWales
Above right • Farmer, Bernie Walsh, and Co-operativeResearch Centre for SustainableRice Production Researcher, Tim Farrell, inspect the results ofcold water growing experimentson Bernie’s Yanco rice farm
Above centre • The PeronsTree Frog: frogs are the mostplentiful of any vertebrate on ricefarms according to the first yearfindings of the ‘Restoring thebalance with biodiversity’environmental program.
Below right • Reducing therice industry’s effects on theenvironment is a priority forSunRice and its subsidiaries.Electrician, Bill Murphy, checksthe electrical switching installedto save power at a CopRicefeedmill
Environmentally responsible rice
year’s sampling results were released, showing161 different species of vertebrates on rice farms— 116 types of birds, 21 reptiles, 13 types ofmammals, seven frogs and four fish. Initialfindings suggest that frogs are the most plentifulof any vertebrate on rice farms. Given that frogsare the preferred food of many snakes, mammalsand birds, this has important flow-on effects in the food chain.
The study is also looking at farm attributes thatcontribute to the diversity of on-farm animallife. Farmers will use the results to decide andmanage the layout and composition of theirfarms to most effectively conserve andenhance biodiversity.
Environmental championsLeading by example is always the bestway to get results — and national andinternational attention. The environmentalchampion program puts the rice industry out in front as the only Australian agriculturalindustry to take such an innovative approach to on-farm environmental management.
Environmental champion farmers are those whoshowcase their best environmental practices andland stewardship as encouraging examples forother farmers to follow. The environmentalchampions program is a four-tiered accreditationprogram for recognising the environmental
efforts of rice farmers. Designedby the rice industry for the rice
industry, the program is based onrealistic targets for achieving sustainability onfarms and across the industry.
The greenhouse challengeAustralian agriculture, including rice production,contributes to greenhouse gas emissions.Weighing in to the global fight to reducegreenhouse gas emissions, the rice industry has developed its own Greenhouse Strategy.Developed by the Snowy Mountains EngineeringCorporation, in partnership with theRicegrowers’ Association of Australia Inc, the strategy encourages rice farmers to measure the greenhouse gas emissions on their farmsusing an electronic scorecard and to reduce theamount of emissions using a range of suggestedactions for the rice industry. Another Australianfirst from the rice industry, other industries arenow looking to this program for positivestrategies in greenhouse gas abatement.
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GRAHAMBLIGHTWhitton rice grower.Director since 1969. Directors’Committees: Member, GrowerServices; Member, Rice Industry Co-ordination; Member,Irrigated Agribusiness TaskForce. Honorary Councillor and Past President, Ricegrowers’Association of Australia Inc. Past President, NationalFarmers’ Federation (1991–1994).Past President, InternationalFederation of AgriculturalProducers (World Farmers’Federation) (1994–1998).Chairman, MID Farmers’ Co-op Society Ltd. TradeRepresentative, AustralianAgricultural Industries (Cairns Group and WTO negotiations).
BARRY BUFFIER B Rur Sc (Hons) M EconChurchill Fellow
Agribusiness consultant.Director since 1987. Directors’ Committees:Chairman, Finance and Audit; Member, Remuneration.Director, Riviana Foods Pty Ltd.Board Member, New SouthWales Rural AssistanceAuthority. Member, NationalRural Advisory Council. Director,Rural Industries Research andDevelopment Corporation.Former National ManagerAgribusiness, Westpac BankingCorporation; Deputy DirectorGeneral, New South WalesAgriculture.
NORMMCALLISTER Dip App Sc Ag FAICD
Berriquin rice grower. Director since 1997. Directors’Committees: Member, Financeand Audit; Member, GrowerServices; Member, Rice IndustryCo-ordination. Director andChairman, Rice ResearchAustralia Pty Ltd. Director,Riviana Foods Pty Ltd and SilicaResources Pty Ltd. Chairman,RIRDC Rice Research andDevelopment Committee. Fellow, Australian Institute of Company Directors.
DAVIDWOODSIDEB Agr Sc
Benerembah rice grower.Director since 1984. Directors’Committees: Member, Financeand Audit. Representative,RIRDC Rice Research andDevelopment Committee. Central Executive Delegate,Ricegrowers’ Association of Australia Inc. Chairman, Area Brickworks Pty Ltd, Griffith.
BRUCE BARBERFAICD Cert (Ag)
Warrawidgee rice grower.Director since 1984. Directors’Committees: Member, Financeand Audit; Member, GrowerServices; Member, Rice IndustryCo-ordination. Director, RiceResearch Australia Pty Ltd;Stockfeed Manufacture andDistribution Pty Ltd; TrukaiIndustries Limited. Chairman,RCL (SI) Ltd. Chairman,Solomons Rice Company Ltd.Chairman, BenerembahIrrigation District EnvironmentProtection Trust. Fellow,Australian Institute of CompanyDirectors.
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Our BoardLeft to right
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The Ricegrowers’ Co-operative Limited Board of Directors in the new Leeton Rice Flour Mill. The mill is one of the latest additions to the SunRice stable of world-class infrastructure.
GERRYLAWSON LDA (Dip Ag)
Mayrung rice grower. Director since 1985. Chairman since 2001. Directors’ Committees:Chairman, Remuneration.Director and Chairman, RivianaFoods Pty Ltd. Director, SilicaResources Pty Ltd; Oryza PtyLtd; Riviana (Australia) Pty Ltd;Anglo Australian Rice; HertoNV; The Sunrice Inc. DeputyChairman, Rice MarketingBoard. Central ExecutiveDelegate, Ricegrowers’Association of Australia Inc.
ALAN WALSHDirector since 2000. Directors’Committees: Member, GrowerServices; Member, IrrigatedAgribusiness Task Force.Representative, IrrigationResearch Extension Committee.Central Executive Delegate,Ricegrowers’ Association of Australia Inc. Secretary,Ricegrowers’ Association ofAustralia Inc, DeniliquinBranch.
NOELGRAHAM Caldwell rice grower. Director since 2001. Directors’Committees: Member, GrowerServices. Member, RiceMarketing Board. Rice MarketingBoard Representative andAlternate Delegate, Ricegrowers’Association of Australia Inc. Rice Marketing Board Delegate,RIRDC Rice Research andDevelopment Committee.Chairman, Cadell Land andWater Management Plan.
GRANT LATTAFAICD FAIM ASA/CPA AAMI MBA Dip Bus Dip Eng
Director since 1999. Directors’Committees: Member, Financeand Audit; Member,Remuneration. Chairman, Grains Research andDevelopment Corporation and GCMCorp Pty Ltd. DeputyChairman, Export Finance andInsurance Corporation, andNational Dryland SalinityProgram. Director; VisionSystems Limited, VentureCapital Partners Trustee Board;Food Science Australia.Member, Australian CompetitionTribunal (Federal Court). PastPresident, Australian Chamberof Manufacturers. RetiredDirector, Australian TradeCommission (AUSTRADE)(1994–2000). Former ExecutiveDirector, Lam Soon (Hong Kong)Limited (resigned 2000). FormerChief Executive Officer,Camerlin Consortium(1995–1997). Former ManagingDirector, Pacific Brands FoodGroup (1991–1995).
BRIAN VIAL B Sc Dip Acct
Moulamein rice grower.Director since 1993. Member,Rice Marketing Board. Member,Rice Research and ExtensionCommittee.
MARKROBERTSONBerriquin rice grower. Director since 1996. DeputyChairman since 2001. Directors’Committees: Chairman, GrowerServices; Member, Finance andAudit; Member, Rice IndustryCo-ordination; Member,Irrigated Agribusiness TaskForce. Chairman and Director,Trukai Industries Limited.Director, RCL (SI) Ltd; SolomonsRice Company Limited; OryzaPty Ltd. Central ExecutiveDelegate, Rice Growers’Association of Australia Inc.
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Mike Hedditch BSc Agr Dip Ed ACI
General Manager — Grower Services/Communication
Joined Ricegrowers’ Co-operative Limited in 1999 asGeneral Manager — Grower Services/Communication,following a 13-year term as Executive Director of theRicegrowers’ Association of Australia Inc. Prior to hiscareer with the rice industry, Mike worked for 14 yearswith New South Wales Agriculture as a DistrictAgronomist.
Kerry Burke BA MIR (Hons)
General Manager — People and Culture
Joined SunRice in April 2002. Kerry is a humanresources professional whose experience spanscompanies such as National Foods, Coles Myer, NorthLimited, Visy, and Glad Products. He spent five years as an industrial/employee relations’ advocate andconsultant before becoming Business Unit GeneralManager in dairy and corporate strategy for National Foods.
Claude Cassar CA F Dip Bus Studies (Acctg)
Chief Financial Officer
Joined Ricegrowers’ Co-operative Limited in 1999. A chartered accountant, he has worked overseas in theUnited Kingdom, the United States and Asia, holdingsenior financial and management positions withmultinationals, such as Dun and Bradstreet, Young and Rubicam Australia, the Dentsu Young and RubicamGroup in Singapore, and Price Waterhouse in Sydney.
Keith Hutton BSc (Hons) PhD FAICD
General Manager — CopRice Feeds and Byproducts
Joined Ricegrowers’ Co-operative Limited in 1981. He is a Director of the Co-operative Research Centre for Sustainable Rice Production and has extensiveexperience in corporate governance, generalmanagement, nutrition and the feeding management of companion animals and farm livestock.
Gary Helou BE (Hons) M Comm
Chief Executive Officer
Joined Ricegrowers’ Co-operative Limited in 1998 asGeneral Manager Marketing and was appointed ChiefExecutive Officer in October 1999. Gary has extensiveexperience in the food industry, including 10 yearsinternational experience in Asia, in executive generalmanager roles at Simplot, Indofood and Pacific DunlopLimited. He is a Director of Riviana Foods Pty Ltd, Trukai Industries Limited, Anglo Australian Rice, and The Sunrice Inc.
Graham Harvey BappSc MBA
General Manager — Operations
Joined Ricegrowers’ Co-operative Limited in 2000 as General Manager — Operations. Graham is anexperienced manager, with 17 years experience inbroad operational roles in FMCG and grain relatedindustries, including multi-site responsibilities forGoodman Fielder.
Russell Barratt BE MBA
General Manager Marketing — Domestic
Joined Ricegrowers’ Co-operative Limited in 1999 and in 2000 was appointed General Manager Marketing— Domestic. Russell has a long career in fast-movingconsumer foods sales and marketing for market-leadingbrands. He has previously held senior managementroles, covering both retail and food service customerchannels.
Rod Fox BA BEd
Company Secretary
Joined Ricegrowers’ Co-operative Limited in 1997 asGeneral Manager Quality Systems and was appointedCompany Secretary in 1999. Previously, he spent 30 years in executive roles with the Dow ChemicalCompany in Australia, Asia, the United States andEurope, where his responsibilities spanned humanresources, quality performance and changemanagement.
Left to right
Our Corporate Management Team
Members of the Corporate Management Team at the new Leeton packaging plant currently under construction.
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Our infrastructure
Coleambally Mill
Deniliquin Mill
Echuca Mill
Leeton Mill
More than $2.5 billion is invested in land,plant and equipment for the Australian
rice industry. Ricegrowers’ Co-operative Limited, trading as SunRice, owns extensivestorage facilities and two seed grading plantsthroughout the rice growing region, as well as four world-class mills located at Leeton,Deniliquin, Coleambally and Echuca. Our Speciality Rice Plant at Leeton completes the infrastructure picture. CopRice Feeds and Byproducts operatesstockfeed mills at Leeton, Tongala and Cobden.
Right • Packaging our world-class product: Ellen Crockettoverseeing 3-Minute Ricepackaging at the LeetonSpeciality Rice Plant
Below left • TongalaStockfeed Mill: one of twoCopRice Feedmills to receiveregistration from QualityAssurance Services Australiafor compliance with a range of quality requirements — a major achievement for astockfeed manufacturer
Below right • Newautomated packagingequipment at the DeniliquinMill: helping to lift productivityand efficiency for SunRice
Below • The new Leeton Rice Flour Mill: adding value to value adding
T he Board is responsible for the Co-operative’soverall governance and strategic direction.
Goal setting, performance monitoring and ensuringinternal control and reporting procedures are adequate,effective and ethical are the Board’s responsibility. The Board gains an understanding of the Co-operative’sbusinesses from regular reports, presentations andbriefings on key issues and makes site visits to Co-operative operations.
Board compositionIn June 2001, the Board unanimously decided torestructure and downsize the Board to 10 directors.Following RCL director elections in August 2003, the Board will comprise four RCL active memberdirectors; three grower elected members of the RiceMarketing Board (who must also be active members of RCL); and three external directors.
The Board’s composition is determined by the Rules ofthe Co-operative and changes to the Rules to formalisethe proposed reduction in the number of directors willbe voted on by members at this year’s annual generalmeeting. Currently, the Board comprises 11 directors, of whom two are external directors. Of the other ninedirectors, three are grower members of the RiceMarketing Board for the State of New South Wales who were elected by ricegrowers via postal ballot for a four-year term, commencing November 2001. The remaining six are RCL active member directorswho will complete their terms at the end of the 2003annual general meeting.
The initiative to downsize the Board is aimed at betterserving the interests of members and better serving theneeds of a commercial entity operating in a globallycompetitive marketplace. All Ricegrowers’ Associationssupported the strategic move to restructure the Board.
Particulars of each director’s board meeting attendancefor the past 12 months are included in the FinanceReport.
Compensation arrangementsCo-operative members determine directors’remuneration arrangements. All necessary expensesincurred by directors in the business of the Co-operativeare refunded to them. Directors’ remuneration detailsare included in Note 23 to the financial statements.
Independent professional adviceThe Board’s policy is to enable directors to seekindependent professional advice at the Co-operative’sexpense, after first discussing such intentions with the Chairman, who determines if the estimated cost isreasonable (but who will not impede the seeking ofadvice). In the case of the Chairman, reference is made to the Deputy Chairman.
The Remuneration CommitteeThe Remuneration Committee comprises the Chairmanand two directors. The Committee meets regularlythroughout the year to review and makerecommendations to the Board on remuneration,incentive schemes and related matters to recognise and reward performance.
Finance and Audit CommitteeThe Finance and Audit Committee, comprising sixdirectors, oversees the Co-operative’s financial reportingand internal control systems, including trade practicescompliance and risk management activities. The ChiefExecutive Officer, the Chief Financial Officer, theInternal Audit Manager and the PricewaterhouseCooperspartner in charge of the external audit attend allmeetings.
A charter from the Board requires this Committee to provide a direct link between the Board and the Co-operative’s internal and external audit functions. The Committee meets regularly with the internal andexternal auditors to review the scope and adequacy of their work and to ensure that remedial action is taken when issues arise.
The Committee reviews and advises the Board onfinancial information prior to the Board approving the release of the information to shareholders andregulatory bodies.
Grower Services CommitteeThe Grower Services Committee comprises six directors.The Committee focuses on the relationship between theCo-operative and its growers and aims to strengthenthat relationship by providing appropriate services andinformation. The Committee is governed by a charterapproved by the Board, which includes reviewingpolicies to improve on-farm production of rice, paymentschemes to shareholders, communication with growersand developments in rice research.
Risk managementThe Board recognises the wide spectrum of risk the Co-operative faces in its daily operations. To managethese risks, designated management functions includingtreasury, taxation, human resources, informationtechnology and internal audit, work closely withoperational and executive management to identify and manage business risk. The formal recognition ofrisk is a fundamental part of the management process.The Co-operative has implemented insurancearrangements and constantly evaluates the economicbalance between self-retention of risks and risk transfer.
Internal controlsThe Co-operative has established a well-documentedsystem of internal controls that take account of keybusiness exposures. The system is designed to providereasonable assurance that assets are safeguarded, properaccounting records are maintained and financialinformation is reliable.
The Co-operative’s internal audit function plays a key role in providing an objective and continuingassessment of the internal control system’s effectiveness.It ensures information is reliable and has integrity,operations are efficient and effective and policies andregulations are adhered to. The Internal Audit Managerhas direct access to the Finance and Audit Committee.
EthicsThe Co-operative requires directors, management andstaff to observe the highest standard of ethics.
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Corporate governance
Registered OfficeNIP 37 Yanco Avenue, Leeton NSW 2705 AustraliaPO Box 561, Leeton 2705Telephone 02 6953 0411Facsimile 02 6953 4733
Rice MillsColeambally, Deniliquin, Echuca, Leeton and Lae
Marketing OfficesMain Office Level 32 BT Tower1 Market St, Sydney 2000 PO Box Q166, QVB Post Shop 1230Telephone 02 9268 2000 Facsimile 02 9264 3817
AucklandSuite 8, Hinemoa House, 184 Hinemoa StBirkenhead, Auckland, New ZealandPO Box 34323, Birkenhead,Auckland, New ZealandTelephone 09 480 1035Facsimile 09 480 1036
DubaiSuite 412, Al Moosa Tower 1, Sheik Zayed RdDubai UAEPO Box 71947, Dubai UAETelephone 9714 331 2349 or
9714 331 2049Facsimile 9714 331 2249
Singapore51 Newton Rd, # 08-04,Goldhill Plaza, Singapore 308900Telephone 65 6352 1768 or
65 6352 1354Facsimile 65 6352 1292
TokyoAustralian Rice Growers Co-operative (ARGC) – TokyoLevel 7, Takegashi Building5-3, Kyobashi 3-chome, Chuo-kuTokyo 104-0031, JapanTelephone 03 5524 1766Facsimile 03 5524 1767
CopRice Feedsand ByproductsRailway AvePO Box 561, Leeton 2705Telephone 02 6953 0422Facsimile 02 6953 2776
CopRice Feed MillsLeeton, Tongala and Cobden
SunRice
Subsidiaries
Riviana Foods Pty Ltd5 Corporate AveRowville 3178PO Box 1600, Ferntree Gully 3156Telephone 03 9764 3622Facsimile 03 9764 3343
Papua New GuineaTrukai Industries LimitedMataram St Lae 411PO Box 2129 Lae 411Telephone 675 472 2466Facsimile 675 472 6073
Solomon IslandsSolomons Rice Company Limited Trading As SolricePO Box 5, HoniaraTelephone 677 30826Facsimile 677 30825
United KingdomAnglo Australian Rice LimitedPO Box 572 Upper Pownall StWapping Liverpool L692ATTelephone 44 151 709 8090Facsimile 44 151 709 3730
