New Concept from Alliance

NEW ZEALAND - New Zealand meat processing giant Alliance has put forward plans for a mega meat operation in the country, similar to the concept surrounding the new Fonterra dairy operation.
calendar icon 15 February 2008
clock icon 2 minute read

The farmer cooperative, Alliance, has put forward plans for an operation that would handle 80 per cent of the country's livestock for meat.

The new operation is expected to have a turnover of NZ$5 billion a year.

In a letter to shareholders the new Alliance chairman, Owen Poole said; "Alliance Group has been undertaking extensive work on options that will enhance suppliers' returns. It is clear that small step consolidation, including a merger with PPCS, will not bring the required benefits."

He added: "Our concept is based on creating a new single entity through which 80 per cent of New Zealand's livestock supply is managed from farm to market. Our work to date suggests that with 80 per cent supply procured, processed and marketed through one entity, the concept is commercially viable and would lift on-farm returns by approximately NZ$400 million per annum." He said the concept would also bring added benefits of improved product mix, better market research and branding, better yields and adoption of best practice and consolidation of ancillary operations.

Mr Poole also said that excess processing capacity could be rationalised under such a scheme.

Meat & Wool New Zealand has welcomed the Alliance Group initiative.

Meat & Wool New Zealand Chairman, Mike Petersen said is the concept is the sort of initiative that farmers have been looking for and this was an opportunity to establish critical mass and improve the long-term profitability of the industry.

"Farmers are looking for vision and direction to lift farm gate returns. This initiative is definitely worthy of further analysis and we have offered to assist in any way we can. Meat & Wool New Zealand will be encouraging the meat industry taskforce, led by Sir John Anderson, to explore this concept further," he said.

Mr Petersen said he was also pleased to see other industry parties viewing the concept positively and committing to exploring it further.

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