Early April marks the arrival of a new fertiliser heavyweight into Tauranga, with Australian company Marnco making its first play in the high-volume New Zealand farm fertiliser market.
Dropping anchor on the doorstep of entrenched farmer co-operative fertiliser company Ballance Agrinutrients is a move Marnco’s managing director Mark Been said he has been working on for some months.
“We have got three Kiwi staff on board now, and have a [Tauranga] site secured, along with a site in Timaru,” he said.
The company will be discharging its first shipment of superphosphate and DAP fertiliser at the Totara Street site, previously used by Genesis Energy for coal handling. The first shipment is scheduled for arrival early April with 30,000 tonnes of product and Been said interest in the company’s arrival has been high among industry players and farmers.
“We see ourselves entering the market as a low-cost low overhead company. We are not going to be everything to everyone. Our focus is going to be on bulk nitrogen, phosphate and potassium, and doing it right.”
Active in the Australian farm fertiliser market since 2019, Marnco has established a solid foothold in South Australia and Victoria, claiming about 20-25% market share in those states and hitting 400,000t of sales volume last year.
This amounts to about eight percent of the Australian market and represents about a fifth of New Zealand’s total annual market volume, of which about 40% is superphosphate.
Been said making a move across the Tasman was a natural progression, and he saw the company enjoying some benefits of scale by incorporating New Zealand into shipping delivery rotations.
He said he sees the NZ fertiliser market as one that carries some significant overheads amongst its existing players, and as a result prices tended to sit 5-10% higher than in Australia, depending upon product type.
He likened Marnco’s entrance to the food industry where the supermarket trade is dominated by two large, entrenched players.
“If this was the supermarket sector and Ravensdown and Ballance are Foodstuffs and Woolworths, then we are the Aldi.”
The company is considering a range of distribution options, and uses giant United States based fertiliser company Nitron as its main supplier for product.
The New Zealand fertiliser market has passed through a particularly tough year, thanks in part to challenging climatic conditions last year, and lower than expected farm incomes. These pushed last year’s market down to 1.6 million tonnes, well back on its long-term average of 2.0 million tonnes.
“We are very conscious of just how tough the New Zealand market is, we are under no illusions.
“But we see the New Zealand market as one that is quite highly serviced, with larger overheads as a result.
“Those large overheads can only be recouped through higher prices. We question whether the value of the existing co-operative structures are getting translated to farmers.”
Been said Marnco is open to considering several distribution models to optimise prices to farmer customers.
