Investors back Prime Range Meats’ growth plan
Invercargill New Zealand November 21 2014: In a move that will see Prime Range Meats firmly hooked into its own secure supply chain into China, Lianhua Trading Group is increasing its shareholding from 24.9% to 75%.
The move has been approved by the Overseas Investment Office (OIO) - approval required because part of Prime Range Meats’ (PRM) assets include 99.1 hectares of land used for holding stock for the plant, some of which is sensitive wetlands and bush.
PRM managing director Tony Forde, fellow shareholder/director Ian (Inky) Tulloch and associated parties have sold down after diluting their shareholdings earlier this year, following a competitive sales process, through the issuing of new shares. This introduced new capital into PRM then and this new transaction will also see capital expenditure on PRM’s plant of several million more in coming months.
Mr Forde says the move could not have come at a more perfect time for PRM, for the wider Invercargill community and economy – and for him and Inky.
“While we are not ready to hang up our boots yet, Inky and I are not getting any younger and the future of Prime Range Meats really needed to be secured,” Mr Forde says. “This deal means the plant will get the capital it needs to be not only sustainable, but expand over the next five years. That will be good for the workers, our loyal farmer suppliers and the local economy. The number of jobs, for example, is expected to increase from the current 120 to around 170 or more and there is significant capital expenditure planned for in and around the plant.
“This will be a real boost to all Southland and Otago farmers, who now have one solid option that stands out from the turmoil about the future of the red meat sector. PRM is ready to talk to interested farmers about what we can offer now and to show them the future potential of having long term supply arrangements for quality stock.
“I would also like to assure local-trade clients that our long standing relationship is important to us and will continue under the new ownership.”
Lianhua Trading Group executive director Mark Ma says the group was formed at the start of this year to invest in the beef and sheep meat industry in New Zealand. Mr Ma, a permanent resident who has lived in Auckland since 1999, says he has been charged with finding the best ways to secure further beef and sheep meat for the supply chain in China.
With the assistance of professional agriculture director and advisor to Lianhua Rick Braddock, who has also been appointed a PRM director, the team decided an excellent first way was to invest in an independent meat processor and exporter.
“That way we are able to ensure we get the cuts that are suitable for the Chinese market, which are often different to the traditional cuts that New Zealand processors have supplied to Europe and the United States,” Mr Ma says. “We believe New Zealand farmers have the knowledge and skills best suited to producing here the high quality animals for our needs. We can add the technical expertise to get the right product for China.”
Lianhua Trading’s parent company is Shenzen Lianhua Enterprise Development Co Ltd. It has a retail network, which has customers including the Haidilao Hot Pot Chain and McDonalds.
Shenzen Lianhua’s food industry division has been responsible for importing thousands of tonnes of beef and sheep meat in to China since the 1990s from places like Brazil, Uruguay, Argentina and Australia, as well as New Zealand. Last year it procured the equivalent of nearly NZ$500 million of red meat into China.
Its experienced team is highly experienced at handling the requirements needed to meet China’s Inspection and Quarantine Services (CIQ) specifications for food arriving at China’s borders. Mr Ma says Prime Range Meats’ gained CIQ clearance earlier this year for its beef and sheep meat exports.
Together with Shenzen Lianhua’s principal Mr Chang Hao, Mr Ma and the PRM team plan will meet staff, farmers and business people later next week. With both Mr Ma and Mr Chang Hao have backgrounds in farming and Mr Ma says it will be great to get back out on the land again.
As part of PRM’s future- proofing, Mr Forde has also announced a restructure of the company’s senior management: Plant manager Paul Hamilton will become PRM’s general manager. He is a highly experienced meat industry manager with 30 years’ experience in management roles. This includes 20 years through the development of PRM. Trevor Hourston will move into the role of plant manager.