Queensland cotton industry celebrates 100 years of growth

What is now know as Queensland Cotton started out as the Australian Cotton Growers Association in 1921 after a handshake deal between the then-Queensland Premier, Ted Theodore and investors who subsequently built three cotton gins in Queensland.

Having been part of the growth of cotton, the government saw it as Queensland's white hope and invested in quality seed while instituting price guarantees for growers. After the end of WW1, returning soldiers were keen to find their future and cotton growing took off.

A hundred years later Queensland Cotton has gone global as part of the Olam Group, which operates in more than 60 countries, sourcing from 5 million farmers.

Executive director and Olam country head Bob Dall'Alba said they focused their growth strategy on a high standard of service and knowing the market and the customer.

Deregulation of Queensland's cotton industry followed in 1989 and in 1992 the company was listed on the Australian stock market.

"We had to start publishing a daily cash price for cotton instead of having a pooled price and that was a major change," Mr Dall'Alba said.

Another significant change was in the global trade of cotton.

Along with other Australian competitors in those early years, Queensland Cotton sold its product through agents, who then sold to other agents in Asia.

"It was not efficient but perhaps at the time, there was a lack of confidence in Australian agriculture when negotiating trade across borders," Mr Dall'Alba said.

Queensland Cotton was unique in that it was a listed company when many other agricultural companies were marketing boards, co-ops or private companies.

Deregulation of the Queensland industry was led by Alan Brimblecombe, a pioneer of Australia's cotton industry.

Mr Dall'Alba said Queensland Cotton had always trained and invested in its staff, hiring an American, Pat Apperson to help set up it futures and options processes and to help train staff.

"Later we sent one of our team to work with a European cotton trader to learn as much as he could and bring that knowledge back to us."

In the mid 1990s QC expanded its global presence by establishing a marketing office in California to enable access to high grade SJV in the years that the local crop was impacted by unfavourable weather at harvest.

The next acquisition was the purchase of Anderson Clayton in the US, followed by the establishment of a marketing office in Brazil, enabling QC to provide high grade cotton to customers all year round.

After being listed, Louis Dreyfus held 20 per cent of QC's shares.

In 2007 QC was approached by Olam International with a friendly takeover offer. After a short bidding war, QC became Olam's first acquisition.

QC was of interest to Olam because the cotton origins where it was established - Australia, US and Brazil - neatly complimented the strength of the Olam cotton business in Africa, and central Asia.

Olam provided increased financial horsepower and a global resource network, and the acquisition of QC became a platform for Olam to expand into other crops in Australia, like almonds, grains and pulses.

Olam founder and CEO Sunny Verghese invested in the environment and sustainability before this was fashionable.

With 5 million farmers globally, Olam views supporting the livelihood of farming communities as an important part of being sustainable.

QC was aligned with this view, believing that its obligations to farmers are to help support farmers to stay in business.

Unlike many other multinationals, Olam retained the QC name recognising the value of this to global customers and Australian farmers. This decision was instrumental in enabling QC to reach its 100 year milestone.

An event celebrating Queensland Cotton's 100 year milestone was held at the end of November with over 200 growers attending.

That was followed by a celebration at Brisbane's Town Hall on December 3, three days short of the centenary of the handshake agreement that started it all.

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