Another chapter has been added to the troubled history of northern meatworks in Australia with the Kimberley Meat Company near Broome in WA and its parent company being placed into voluntary administration.

Kimberley Meat Co plant near Broome

Administrators were appointed to the Kimberley Meat Company on 27 February and to its parent company Yeeda Pastoral Company and several associated companies on 29 February.

The first meeting of creditors was being held from 3pm AEDT today as Beef Central’s daily news email was sent to subscribers.

The Yeeda group of companies has been the subject of a WA Government investigation into more than 400 cattle deaths in 2022 and the illegal dumping of abattoir waste, and also has been at the centre of reports alleging it owes more than $5 million in unpaid debts.

The group’s major shareholder is Hong Kong-based equity fund Asia Debt Management Capital (ADM Capital), which has agricultural investments worldwide, including irrigated tree cropping, stockfeed and commodities trading businesses in Australia.

Yeeda and Kimberley Meat Co was ADM’s first investment in the Australian red meat supply chain.

Kimberley Meat Company founder Mervyn Key sold his 45 percent stake in the plant, together with his share of parent company Yeeda Pastoral Co, to ADM Australia, which was an existing partner, in October last year.

The deal also included Yeeda’s two large pastoral assets, Yeeda and Mt Jowlaenga stations near Broome.

The sale agreement increased ADM’s ownership stake in KMC and Yeeda Pastoral Co to 80 percent.

The balance (20pc) is owned by another long-term investor, a family office based in the US and Argentina which has held a stake in Yeeda for close to 10 years.

In a letter to creditors, administrators Korda Mentha said they are currently assessing the financial position of the Companies.

Based on information reviewed to date, the letter said the administrators expect to continue the operations of Yeeda Station, to preserve the assets and livestock during the administration while a sale process is undertaken.

Today’s meeting gives creditors the opportunity to ask questions and vote on resolutions.

A second meeting of creditors will be held in “due course”, the administrators’ letter saidm which will give creditors the opportunity to  consider their report and opinion on which option is in the best interest of creditors, and to vote on the future of the companies.

A voluntary administration is a process initiated by the director(s) of a company when they believe that the company is, or is likely to become, insolvent.

This means that the company is unable to pay its debts or is likely to become unable to pay its debts.

A voluntary administration gives a company an opportunity to consider its financial position and its future.

Kimberley Pilbara Cattlemen’s Association CEO Bron Christensen said that without access to a local meatworks in the north, options for the region’s cattle producers would be further constrained.

“It has limited our supply chain,” she said.

“There are always some cattle which really aren’t suitable for other markets.”

The nearest processing plants for cattle not suitable for live export markets are at Perth, which would add another $150 to $200 per head in transport costs.

“What our hope would be is that someone would buy the plant and possibly upgrade it and or buy it and at least get it operating, with all the animal welfare and environmental standards required,” she said.

“Another issue is that there is no price point here now.

“There was always a price that was set for Perth which was basically the amount you would have got up here plus what the transport would cost.

“Without setting that base price up here, there is really no competition there in price.”

In March last year, Yeeda Pastoral sold its Springvale group of properties near Broome (Springvale, Mable Downs, Alice Downs and Texas Downs, covering about 600,000ha) to Twiggy Forest’s Harvest Road group.

The Kimberley Meat Co plant was built in 2016 by Mr Key and his partners including Yeeda founder Jack Burton.

In 2021, KMC’s owners attempted to create a cooperative designed to transfer ownership to local landholders. The WA state government was going to fund the local pastoralists into the deal, but allegedly pulled out at the final stage.

Daily production capacity of the plant is around 220 head, with an annual season around 40 weeks a year.

In the absence of the mothballed AA Co Livingstone beef plant near Darwin, KMC’s plant is the only major large-scale beef processing facility servicing the Northern Territory and northern WA.