On a morning in early March, 2011, Matthew Durack, Managing Director of Stahmann Farms Enterprises (SFE) a vertically integrated tree nut farming, processing, and marketing company and one of the oldest tree nut businesses in Australia was mulling over the problem before him. SFE needed to chart its strategy for reaching its target of becoming one of the top five macadamia processing businesses in the world. Stahmann Farms had established Australias largest pecan orchard in the late 1960s and a shelling and packing plant in the early 1980s. The pecan farming and processing business was stable but had little or no growth prospects and it appeared that the focus now needed to be on the companys secondary activity of macadamia processing. However, this line of business was limited by the supply of nuts for contract shelling from farmers or other processors in an environment that was becoming more and more competitive. After a series of consultations with the management team comprising fellow director and Business Manager, Jeff Dodd; GM Farming, Kevin Norman; GM Processing, Ross Burling; and GM Sales, Richard Genest, Durack could see several paths ahead that looked promising: going for acquisitions of competitor operations, entering into a JV with an existing processor or a major new grower, or purchasing macadamia farms to establish the same vertical integration the company enjoyed in pecans.
