increase font size
Alliance chair Murray Taggart says the co-op is now much fitter.
Meat co-op Alliance Group has doubled its operating profit to $20.2 million for the year to September 30, 2017.
Chief executive David Surveyor reports good progress on transforming the co-op: financial performance has improved and $11.4 million has gone to farmer shareholders.
But lot of hard work remains to be done.
“Profit is not at the level we want for a company of this size and we need to capture gains more quickly. Alliance Group needs to run faster,” Surveyor says.
“It’s important we maximise the value we create for New Zealand’s best farmers, and ensure our changes and progress are sustainable by further investment, growing value-add, capturing market value and building organisational capability.”
Net profit before tax and pool distributions was $28m, including extraordinary items relating to a land sale at Makarewa, Southland.
Revenue was up to a record $1.53 billion, and core debt halved to $19m. Shareholders’ equity ratio is 71%, versus 70.6% last year.
Chairman Murray Taggart says Alliance is now a much fitter co-op because of higher efficiency, lower costs and more value-capture from global markets.
“The numbers tell a positive story: new shareholders, a stronger balance sheet, improved profitability and better livestock pricing for our farmers.”
Suppliers are benefiting from firmer international prices for beef, lamb, venison and co-products. “Lamb prices are particularly strong and venison is seen more as a premium product.”
Taggart says the balance sheet now allows the co-op some “exciting initiatives and innovative practices”.
“Alliance has a wide range of short, medium and long-term programmes to gain deeper market penetration and capture more value from existing markets.”
Surveyor says the co-op strives to maximise the price it pays farmers for livestock, and to offer other incentives.
“We have improved our pricing structures… offering more minimum price contracts, which provides greater certainty for farmers who then can have greater confidence when budgeting.”
$15m in loyalty payments went to farmers during the season.
World best practice is key – lifting processing efficiency and improving the operating performance of plants. At least $10m has gone this year into robotic/primal cutting technology and reconfiguring the boning room at Dannevirke; a big upgrade is finished at Lorneville and a big capital spend at Pukeuri.
Product range and market reach are growing in domestic and global markets to lift sales, Surveyor says.
“We are growing our markets and evolving into a more sophisticated player and capturing more value for our farmer shareholders.” The product range is more varied and it includes premium brands.
“A dedicated food service team in the UK targets high-end restaurants and hotels. And we were the first NZ company to dispatch chilled lamb to China as part of a six-month trial.”
Surveyor says the co-op’s safety record has improved.
“Our total recordable injury frequency rate has improved by about 40% year on year.”
Alliance Group has secured greater access for chilled beef exports into China following approval of its Levin and Mataura plants to supply that market. With its first load of beef from Levin clearing Chinese customs in early January and a shipment from Mataura recently arriving in China, journalist Leo Argent talked to Alliance general manager safety and processing Wayne Shaw.
Alliance Group has secured greater access for chilled beef exports to China, following approval for two of its processing plants to supply the market.
Alliance Group says it has secured greater access for chilled beef exports to China, following the approval for two of its processing plants to supply the market.
Meat processor Alliance Group has appointed Chris Day to its board as an independent director.
Alliance Group has turned a corner on a challenging two years following a comprehensive re-set over the past 18 months and is forecasting a return to profitability, farmer-shareholders were told at the company’s annual meeting in Gore today.
A recent trip to Singapore has highlighted the importance of marketing better, says ASB’s new head of food and fibre, Kristen Ashby.
The chair of Beef + Lamb NZ, Kate Acland says the rush appears to be on to purchase farms and convert them to forestry before new rules limiting this come into effect.
New Zealand farmers will face higher urea prices this year, mainly on the back of tight global supply and a weak Kiwi dollar.
Andy Caughey of Wool Impact says a lot of people in NZ have been saying it's crazy that we are not using natural fibres in our buildings and houses.
Former chief executive of Beef+Lamb New Zealand Scott Champion will head the Foundation for Arable Research (FAR) from July.
Avian flu getting into New Zealand's poultry industry is the biosecurity threat that is most worrying for Biosecurity Minister Andrew Hoggard.
