Daiwa Securities Group is eyeing Australia for its first expansion into the agricultural sector abroad, part of a wider push to boost lending and direct investment in the country’s real estate and renewable energy sectors.
Japan’s second-biggest brokerage is looking for investment or lending opportunities in what it considers value-added produce growers, Chief Financial Officer Kotaro Yoshida said. The firm is also targeting loans to mid-sized property developers, filling a market niche between Australia’s four major banks and non-bank lenders.
The renewed push in Australia comes as Chief Executive Officer Akihiko Ogino seeks to increase income from outside Japan by about 40% in the next few years, and follows an earlier investment by the Tokyo-based firm into the venture capital arm of Australia’s national science agency.
Japan’s long-standing farm labor shortage has encouraged agricultural industrialization, offering a model for similar technological improvements for fresh produce growers in Australia, Yoshida said. The brokerage could make direct investments in these farms or provide loans.
"If they grow and if we can bring them to Japan, that would be wonderful," Yoshida said in an interview last week following Daiwa’s first Japan equities conference in Sydney and Melbourne. They can "collaborate with Japanese companies and grow further."
The firm wants to continue its focus on lending and advisory in the clean energy space, leveraging its five staff in Sydney and Melbourne, Yoshida said.
Chairman Seiji Nakata told Bloomberg News last year the firm was looking to expand in Australia to take advantage of the country’s strong demographics and fast-growing pension pool.
Through its private investment arm Daiwa PI Partners, the firm backed Main Sequence Ventures, the venture capital arm of Australia’s science agency that has funded companies including plant-based meat maker V2 Food.