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VOL. 125 | NO. 85 | Monday, May 3, 2010

Global Cotton Firm Moves Into Memphis

By Eric Smith

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Layton Daglish of Queensland Cotton laughs while forklift driver Parsell Rayford unloads cotton bales inside a new 252,000 square-foot cotton warehouse for Anderson Clayton Corp., a division of global cotton distributor Queensland Cotton.  Photo: Lance Murphey

As two local cotton companies work through their lengthy merger, another player has arrived on the scene with the purchase of a 300,000-square-foot warehouse it will use as a major distribution center.

Anderson Clayton Corp., a Fresno, Calif.-based company owned by Queensland Cotton Holdings Ltd. of Australia, has paid $3.9 million for the building at 4173 B.F. Goodrich Blvd. in Oakhaven. It is Anderson Clayton’s first Memphis property.

The company bought the warehouse from Denver-based developer ProLogis last week, creating perhaps the biggest cotton headline since Allenberg Cotton Co. and Dunavant Enterprises Inc. last year said they would merge.

Cliff White, senior vice president at QC (US) Marketing – the Richardson, Texas-based affiliate of Queensland – said the company was setting up shop here to be “involved in the certification business on the futures market” and also to expand its U.S. cotton business.

White said Queensland, which is owned by Singapore-based agricultural commodities giant Olam International, “fully appreciates that we need to be more active in the Memphis territory area.”

He said that goal was accomplished by pulling the trigger on the Oakhaven property and immediately occupying more than 250,000 square feet in the building. The company began unloading Delta cotton into the facility the day after closing the deal.

Another tenant leases about 45,000 feet in the building, and while White said he isn’t sure if Anderson Clayton will take over the remaining square footage, it is looking at additional space for its operation.

“We were focused initially on Arizona and California, then we moved to Texas and we’re certainly moving into the Memphis area,” White said. “I think it’s fair to say it’s the start of our operations in Memphis.”

To firmly entrench itself locally, the company hired ex-Dunavant employee Sam Clay to direct the Memphis operation. Clay will handle the trading and marketing and Rick Hauff will handle warehousing.

The company at times will have up to 30 people working at the warehouse, but the core group will be six to 10 employees, Clay said.

Clay said he joined Anderson Clayton on March 29 with the expectation that he would oversee the company’s entrée into the Memphis market.

“I’ve been talking with these folks for several months; we finally got something worked out and they wanted to come to Memphis and get in warehouse position and set up marketing and trading people out here,” he said. “I’ll be buying cotton for them, certificating cotton with them and storing cotton.”

Clay said the emergence of Anderson Clayton/Queensland will be a boost for the industry at a time when it needs it most.

“It’s exciting,” Clay said. “It’s gotten the juices flowing. They have some great backing from Olam and they want to be a player in the game. It’s going to be a lot of fun and we’re going to make this thing go.”

The company is moving forward with its expansion at a time of fluctuation, highlighted by the pending merger between two kings of cotton, Allenberg and Dunavant.

Those companies made news last month when Allenberg’s parent company, Louis Dreyfus Corp., paid $1 million for Dunavant’s warehouse at 3797 New Getwell Road.

But they aren’t releasing details on when the merger would be completed and what the united company would resemble.

Sharon Johnson, senior cotton analyst for First Capitol Group in Atlanta, said she wasn’t sure how much of an impact Anderson Clayton/Queensland’s arrival will have locally, but the purchase clearly shows that large players still have faith in the industry.

“It’s another indication of how global cotton production and consumption is and everything in between that merchants do,” she said, adding that it’s a positive sign to “have this organization want to buy up a big warehouse and manage their cotton needs not only for what’s coming out of Australia but what’s out of the U.S.”

White said his company’s acquisition comes at a good time because the industry in general has “really stabilized in the last six to 12 months, and business is pretty good at the moment.”

This move solidifies that notion.

“Obviously prices make it look attractive for producers and there’s a lot more enthusiasm from growers for producing cotton,” White said. “We’re seeing a bit of a rebound in acreage, so there’s a bit more optimism around for the first time in a number of years. Hopefully that will continue.”

PROPERTY SALES 37 37 2,656
MORTGAGES 21 21 1,804
BUILDING PERMITS 318 318 6,019
BANKRUPTCIES 61 61 1,054