Alliance ponders South America trade

Alliance Group chairman Owen Poole says the meat processor is to consider opportunities to sell meat to South America and also source meat from that market to onsell into northern hemisphere countries.

The board would meet to consider the just-completed trip by three members of the Alliance management team to South America, Mr Poole said.

There were two strategies for the board to consider when a report was received from "processing people and marketing people".

"One, is there an opportunity to sell some products in there for value? The second point is, is there an opportunity to secure product from South America to support our marketing efforts in other parts of the world."

Any product sourced from South America could go to Asia or Europe, Poole said.

"The world is going to be short of product. We [New Zealand] are tight of product," he said.

The Alliance management team had visited Chile, Uruguay, Brazil and Argentina, Alliance chief executive Grant Cuff said. It was the third such research trip to South America in a decade, but in terms of any ongoing relationships with those countries it was early days, Mr Cuff said.

"I've had verbal reports from each of them, but I still haven't had the written report. We haven't had a look at what the priorities [are] if anything."

South America's animal quality was improving, but there was a "huge variety of climates and range of genetic improvements" to deal with, Mr Cuff said.

"It's still slow compared to New Zealand – there's still a lot to happen there."

In its 2009 annual report the Invercargill meat co-operative announced the resignation of independent director John McCliskie, who had been on the board since 1996. Mr Poole said Mr McCliskie would not be replaced.

In the year to September 30 Alliance reported a $42 million profit before tax and pool payments, based on turnover of $1.5 billion.

That compared with turnover of $1.28 billion and a $67.9m profit before tax and pool payments in the September 2008 year.

Mr Cuff said Alliance was issuing bonus shares to suppliers during the year to September 2009. Those suppliers would get $1 shares totalling $18.6 million to reflect the growth in the company.

Mr Cuff received a remuneration package of more than $620,000 for the 2008-09 year, according to the annual report.

Mr Poole said lamb and sheep prices remained very good, and comparable to last year "when lamb prices paid to farmers were at record levels". He would not give details of those prices.

"It is somewhat unfortunate that we reflect on a successful year at a time when an unhelpful New Zealand dollar looks set to undermine returns in the year ahead," he added in the annual report.

In the year to September 30 Alliance had spent $50m on processing facilities and upgrading equipment, including a new Levin plant bought in November 2008.

The co-operative would probably spend in the order of $25m in the year to September 2010.

Alliance planned to introduce more robotics-based processing into its plants.

- © Fairfax NZ News